Only the Latest Way Banks Exploit the Poor - Room for Debate - NYTimes.com

Only the Latest Way Banks Exploit the Poor - Room for Debate - NYTimes.com:

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Only the Latest Way Banks Exploit the Poor

Rashad Robinson is the executive director of ColorOfChange, an online civil rights organization.

APRIL 29, 2012

About half of all Americans, ranging from the working poor to the tenuous middle class, report living paycheck to paycheck. Work hours and living costs are increasing, but wages are not. So why should we expect consumers to be able to pay exorbitant fees for basic services that banks used to offer free of charge? And given all that we've come to understand about the predatory practices of Wall Street banks, why should we trust them before proper oversight is put in place?

The check-cashing industry is worth more than $40 billion a year. Federal and state lawmakers are now working to regulate vast payday-lending scams. Meanwhile, the banks are moving in to replace them, making excessive fees a key part of their ever-evolving and often-exploitative business model.

The voices that demanded accountability for the housing crisis must demand that Congress address the latest forms of bank misconduct.

During the '70s and '80s, banks’ redlining practices cut off predominantly black and Latino neighborhoods from services including affordable checking and savings accounts, stable lines of credit, home loans and small business loans. Banks have continued to target marginalized communities for predatory lending. We’ve watched in recent years as the foreclosure crisis has disproportionately hit black and Latino families. The result has been the decimation of wealth in these communities. Black wealth has fallen to its lowest level in 25 years.

Following the collapse of the financial sector, taxpayers bailed out the banks that created the crisis. Now, these banks impose additional fees with no additional services, while handing out high executive bonuses and lobbying against essential reform of the financial sector.

In January, the Obama administration announced a broad investigation of banks’ role in the housing crisis. This came only after everyday people raised their voices to demand real accountability. It will be crucial that those voices are raised again to ensure that Congress and the administration address new forms of bank misconduct. Such a movement is the only way the millions of Americans living check to check will have a chance to move into the middle class and achieve lasting economic security.