As we address the disheartening and disproportionate distribution of wealth contributing to poverty in this country, we fail to recognize the most influential proponents perpetrating this travesty of injustice include banks and lending institutions. Normally, we think of the banks as honorable and necessary agents in helping us finance our big-ticket dream items such as businesses, homes or vehicles—helping us in building up wealth. In turn, banks make their money by using the money we put in them to invest or make loans charging varying interest rates to finance projects for their customers. Even in this less than perfect world, you would think that in the end, everyone would have equal opportunities determining if they qualify for life-changing loans.
You would think or want to believe that qualifications for loans would be fair and unbiased, but all too often that is not the case with many of our financial lending institutions. We all know loans should be given out fairly without bias or discrimination to all who meet the necessary requirements. But reports and studies have shown time and time again that people of color, especially African Americans, have been denied loans than their White counterparts have been awarded similar or lesser qualifications.
The discretionary bias lending practices of many banks and lending institutions tie them into being willing institutions, complicit in contributing to poverty in many areas in the Black community. Being able to deny or limit one’s borrowing capacity plays a pivotal role in determining where one can afford to live, thereby contributing to segregation and poverty-ridden communities. Common sense dictates that unfair distribution of monies, especially catering to a specific group, gives that group the advantage. The discriminatory practices and policies by many of our lending institutions have sabotaged the economic growth and power of African Americans.
Banks and lending institutions have historically stymied African Americans’ ability to grow economically by denying loans and literally finding ways to surreptitiously foreclose on the loans we were able to acquire. It is no secret that some banks have historically stolen land and property from people (especially African American landowners) using fraudulent, deceptive and discriminatory practices.
Financing from lending institutions is necessary to start and grow businesses, buy homes, and pay for an education that helps promote economic independence for individuals or groups to form an economic base or generate wealth. Many African Americans are busy pointing fingers and blaming everyone else for our economic shortcomings or lack of an economic base as a race. But all we have to do is look at our lending institutions. They constitute the main financial impetus in our society that is supposed to offer hope and assistance so that those in our community might meet their financial obligations, wants, needs and desires. Without the help from lending institutions, ‘high ticket’ items are not obtainable by most. However, our lending institutions continuously sabotage us—and no one seems to want to hold them accountable.
Just look around in many predominately Black neighborhoods and you’ll find lending institutions claiming to be rescued havens for those who have bad credit, no credit, or accounts in big named banks. These neighborhood-lending institutions will lend you money at exorbitant interest rates, often holding one’s title as collateral or hostage. Some would liken these institutions to opportunists or parasites taking advantage of desperate, down on their luck victims who lack hope. They are willing to sell their souls to the devil to maintain financial balance.
Some people will blatantly attest that predatory lending institutions specifically are not our friends, even though these institutions claim they are vital and helpful to struggling and marginalized communities. They seemingly offer a much-needed hand when no one else will. These predatory lending institutions may appease some of their skeptics by offering jobs to those in the community and by supporting schools and colleges by offering scholarships. Some think their support in the community is commendable. However, do you feel this is adequate compensation for the real damage done by taking advantage of desperate people through predatory lending practices? You are the judge when determining the role banks and lending institutions play in the disproportionate distribution of wealth contributing to poverty in this country.