Underwriting Errors Outlawed, Arnold Kling | EconLog | Library of Economics and Liberty

Making a loan that subsequently defaults is known as a Type I error. Turning down a loan that will subsequently be repaid is a Type II error. In the past, the Congressional harpies have gone nuts over type II errors, accusing lenders of denying loans to minority borrowers and ruining the American dream. Now, they are going nuts about Type I errors.

Sad face.

check me out at posterous here.

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