News Analysis 5

Housing Discrimination

A lawsuit was filed in New York federal court citing accusations of M&T Bank for offering loans to lower qualified white customers at higher approved loan amounts than minority customers by using hidden approval criteria based on raced within the application process.

The ethical problem that is raised in the case is based on possible violations of The Fair Housing Act of 1968 which was designed to eliminate the practice of racial discrimination and segregation of historical neighborhoods by banks in offering loans to minority home buyers. The practice perpetuating segregation of minority people is simply not a fair or equitable way for a society to behave. Bank ought to provide services to customers that are qualified regardless of race and any other factor that infringes on a person’s God given rights that are protected by the constitution.

An Ethical approach that could be applied to the reasoning behind why these banking practices are unethical is offered by Joe Fletcher in that every situation must be evaluated as to how an individual can be liberated from societal rules of the past therefore a progressive standpoint based on love. Minorities adversely affected by banks that will not provide equitable loans is certainly not a loving societal characteristic and therefore is unloving. This is an ethical approach based on a humanistic theory and not necessarily a biblical perspective but is certainly one based common dignity of humans.

So far the case is still in the court system and they are going through audio recordings as evidence in the case. The fact that the investigation into the M&T Bank and other potential violators is being handled by the foremost testing expert makes the results likely to be well reviewed and highly detailed even though the method for testing the banks is a very rare type of investigative research. The decision for the Fair Housing Justice Center to pursue the compliance of lenders to follow the rules of the law is certainly the correct way to proceed with making sure the industry remain fair for borrowers of all races and ethnicity. Based on the course text Ethical Theory and Business, Kantian ethical viewpoint of Utilitarianism would suggest that the maximization of the good and the demand for reducing or eliminating harm to people is the most fair and equitable way to proceed in life is a fine example of how to evaluate how the Fair Housing Justice Center went after this and other banks behaving improperly.

Since the bank is still under investigation they ought to be cooperating with the investigators in the lawsuit and to some degree they are however, the banks spokesperson has spoken out in a brief comment on the issue by stating that they hold the highest level of non white borrower loans for their customers than any other institution in the New York area. It would make reasonable sense for the bank to show good due diligence as well as cooperation in sensitivity to the allegations if they were to behave in a different manner. the follow the course text Ethical Theory and Business, the Kantian viewpoint of Utilitarianism would show that it was also their best interest to work together to try to reach the most good by supporting the efforts of the investigation instead of trying to offer limited information on its position or broad public statements of good will.

References

Business Ethics Magazine (9 February 2015). Retrieved from http://business-ethics.com/2015/02/09/1645-housing-enforcement-group-sues-mt-bank-for-discrimination/

Beauchamp, T.L., Bowie N.E., Arnold D.G., (2012). Ethical Theory and Business, 9th Edition. Upper Saddle River, NJ: Pearson Prentice Hall

News Analysis 4

Net Neutrality

Netflix has been claiming for years that internet service providers that support the delivery of their services have been limiting the bandwidth and speeds of their service delivery to its customers explained the back story in this news article (Fox News Business 2015). The claims have been found by unbiased third party investigation to be false and now will likely backfire on the company in that the government will likely soon be passing regulatory oversight legislation for the industry. The ethical violation claim I am making in this analysis is not that of the government rather the findings of the investigation into the operational missteps by Netflix into offering these false claims to the public in order to make a profit.

It is unethical to falsify a public relations campaign in order to gain an advantage over the market. In the text Ethical Theory and Business, the issue is raised about the purpose of the corporation being that of earning and maximizing profits (2012). Netflix ultimately based its strategy to earn more profits by minimizing barriers for their products to reach the market. The industry has long been known to be unregulated and therefore a free market place with side deals and contracts being negotiated without any government supervision keeping the system in check (Fox News Business 2015). Netflix was able to create image problems for cable companies and was able to work secret agreements with internet service providers in order to gain a larger footprint in the streaming capabilities of network traffic due to its massive system requirements. The bottom line in the government stepping in to take over regulatory control of the industry is simply based on manipulation of the truth.

The Ethical Theory and Business text also discusses how corporations are to ethically disclose information and in this case, Netflix used several third party services to stream their network traffic, all the while Netflix claimed that the cable companies at the consumer end of the service line was unethically slowing the system down in order to service their own wholesale customers (Fox News Business 2015). The way that Netflix presented this information to the public is in question based on the description in the Ethical Theory and Business text arguing that the free market dictates what the consumer wants and organizations role is simply to provide the product the consumer demands (2012). Without proper disclosure, the public will not know exactly what an organization is actually providing and whether or not the product is being consumed under false information. 

Netflix could have resolved this fiasco if they had simply demanded proper disclosure from its third party service providers in the first place. Communicating the truth to consumers would likely have kept this unregulated market off of the radar of the government regulatory committees and manipulating special interest groups interested in allowing the government to take control of everything the free market stands for. The text Ethical Theory and Business also talks about truth in free market depending on the level of sophistication of consumers but without proper disclosure, the consumer could not possibly be knowledgeable (2012). The sophistication of the consumers stems from trust that is developed between a consumer and the organization. Without the organization being truthful, trust in the product cannot be gained by the consumer.

Class discussion also brings to light an approach to ethical reasoning being that of “outcome-based ethics”. This approach describes a need for cost benefit analysis of a situation. Netflix believed they were doing the right thing in order to grow their profits by falsifying information about how their products were being delivered thinking the cable companies would be forced to go into exclusive contracts with them once it was determined that the third party service providers were no longer part of the equation. The less painful solution to the situation proved to be true but also uncovered the fact that the Netflix service providers were not telling the whole story now turning the whole situation upside down by giving a foothold to the government to take over and begin regulating the industry. This was certainly not an outcome Netflix had anticipated. Ethical decision making is a fine line that organizations must be cognizant of before making claims that are not true.

References

Fox News Business (5 February 2015). Retrieved from http://www.foxbusiness.com/technology/2015/02/05/how-obama-fcc-and-netflix-are-duping-america-on-net-neutrality/

Beauchamp, T.L., Bowie N.E., Arnold D.G., (2012). Ethical Theory and Business, 9th Edition. Upper Saddle River, NJ: Pearson Prentice Hall