Banks should never discriminate against a person due to any of their family members. It is important to know that they are not the person that committed those crimes or had that massive debt. These are their own people and should be treated in a way where they don't have to worry about what their family has done.
I do not think that banks should be able to engage in loan discrimination based on the criminal history of the applicant's forefathers. I do not think an applicant should be penalized just because his ancestors were guilty of commiting crimes. Each and every applicant must be judged based on their own merits.
In our current society, we see people turn their lives around. Kids are not guaranteed to live the same lifestyle of their parents. In many cases, they may not even be closely associated to their parents or grandparents. It would be wrong to hold an applicant accountable to crimes that they did not commit and had nothing to do with. As a result, it would be best that applicants are evaluated on their own financial history and ability to pay back a loan.
Banks should not be able to use the mistakes of others to determine the credit worthiness of another. It is unfair and bias to judge someone based on what their forefather's have done. This type of loan discrimination would make it impossible for a lot of people to get loans because everyone can admit to some type of wrongdoing in the past.
You can't base someone's life on what their parents did. I know people like to say, "apples do not fall for from the tree." That is why they came up with laws like having a co-signers, so the young person can build up their credit. This way they do not get lumped in with the people that set a bad example for them.