Business
Poor Communities Lose Billions to Predatory Lenders
By Freddie Allen
NNPA Senior Washington Correspondent
WASHINGTON (NNPA) – Predatory lenders continue to target poor, Black and Latino communities, siphoning off $103 billion in fees and interests every year, and the rest of us are paying for it, according to a recent report by United for a Fair Economy.
“This is more money lost in poor communities than the United States spends on domestic food aid annually,” the report said. “We as a society end up subsidizing that lost income (an average of $3,029 per affected household) through a social safety net that is already underfunded and overcapacity.”
In “State of the Dream 2015: Underbanked and Overcharged,” United for a Fair Economy (UFE), an independent research group that advocates for economic equality across race, gender and class lines, chronicled the disparities that continue to plague the banking industry.
Mike Leyba, the communications director at UFE and co-author of the report said that systemic economic exclusion, largely based on race, has existed for hundreds of years in the United States.
The free labor of kidnapped and enslaved Africans enabled White male land owners and the financial institutions that supported them to accumulate massive amounts of wealth over hundreds of years.
Following the Civil War, Jim Crow laws and “The Black Codes,” continued to deprive freed African slaves of economic opportunities for decades.
After World War II, the GI Bill provided White male veterans a pathway to college, professional careers and a boost into the middle class, a bridge that was closed to Black veterans who also fought and spilled blood overseas. Later, the Federal Housing Administration blocked Black families from moving into suburban neighborhoods, built with and partially funded by government subsidies.
“More than a quarter of all White families shifted from renting to owning in the twenty years following WWII,” stated the report. “Despite laws to the contrary, Black people were excluded from buying homes in White neighborhoods and were forced instead to live in urban ghettos.”
According to the UFE report, less than 1 percent of all mortgages from 1930 to 1960 were issued to Black people.
By 2013, the median wealth held by White families ($141,900), dwarfed the median wealth ($11,000) of Black families.
“As an estimated 80 percent of assets come from transfers from prior generations, the history of the financial situations of prior generations is a primary cause of the racial wealth gap,” stated the report.
Leyba said that economic exclusion, largely based on race still exists, but it’s much harder to pinpoint.
“It may not be legalized or sanctioned by the federal government,” said Leyba. “But it still exists.”
Economic exclusion continues to plague the banking sector, leaving 93 million Americans “unbanked” or “underbanked.”
“The unbanked are people that do not have any type of consumer checking account, and are outside the entire banking system,” the report explained. “The underbanked are people that have a checking account, but also rely on Alternate Financial Service Providers.”
According to the report more than 20 percent (20.5 percent) of Black households were unbanked in 2013, compared to 3.6 percent of White households.
Forty percent of Black households were full-banked compared to 75.4 percent of White households.
Alternate Financial Service Providers or AFSPs include payday loans, auto title loans, rent-to-own shops, subprime credit cards, high-interest rate installment loans, check cashing, prepaid reloadable debit cards, and money orders, the report said.
Researchers found that people shun traditional banks in favor of AFSPs for a number of reasons. Fifty-eight percent said that they didn’t have enough money to meet minimum balance requirements to keep an account open, while others (17 percent) said that past credit problems made it difficult for them to open new accounts.
In recent years, following the housing crisis banks, Chevy Chase Bank, Wells Fargo and Bank of America paid out multi-million dollar settlements in mortgage lending discrimination lawsuits involving Black and Latino borrowers.
But even if Black customers were able to meet the minimum requirements, had good credit and confidence in banks, the contraction and consolidation in the financial sector following the Great Recession have placed traditional banks out of reach for millions of Americans.
AFSPs moved in to fill that void.
“Payday lenders are nearly eight times as concentrated in neighborhoods with the largest shares of Blacks and Latinos compared to White neighborhoods, draining nearly $247 million in fees per year from these communities,” the report said. “Even after controlling for income and a variety of other factors, payday lenders are 2.4 times more concentrated in Black and Latino communities.”
As local bank branches fade away, Leyba said, community businesses dry up.
“What we’re seeing with more large corporate banks taking over those local branches, it makes it so that there is very little incentive for them to invest in that local area,” explained Leyba. Especially, when the large corporate banks can get a much higher yield from other financial products, he added.
UFE researchers suggested that the United States follow other industrialized nations such as France, Germany, Japan, China, Brazil, India, and New Zealand by offering more banking services through local post offices, which have a much larger foothold in urban and rural communities than banks.
The report said that nearly 40 percent of post offices are in zip codes “without a single bank,” and about 20 percent are in zip codes with just one bank.
“In addition to handling money orders, transfers, and debit cards, postal window clerks have experience cashing checks, processing refunds, renting post office boxes, preparing bank deposits, and maintaining business accounts,” the report said.
The report also recommended reforming the Community Reinvestment Act (CRA), modernizing payment technology to keep pace with the new realities of banking and adopting national standards to cap the interest rates on payday loans.
Leyba said that lending circles that provide small community-based loans, have also been successful in emerging markets.
“We know that not everyone will find their way into the banking system, as there is no way to make that happen either through policy solutions or innovations in products,” stated the report. “What policy makers and advocates can do, though, is look for ways to attract, retain and encourage people to begin to build assets, build a favorable credit history and ultimately begin down the path of wealth creation.”
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Activism
Books for Ghana
We effectively facilitated cross-continent community building! We met the call and provided 400 books for ASC’s students at the call of the Minister of Education. We supported the work of a new African writer whose breakout novel is an action-packed depiction of a young woman steeped in Ghanaian culture who travels to the USA for college, all the while experiencing the twists, turns, and uncertainties that life brings.
By Min. Rauna Thurston, Chief Mpuntuhene Afua Ewusiwa I
My travels to Afrika began in June 2022, on a tour led by Prof. Manu Ampim, Director of the organization Advancing The Research. I was scheduled to become an ordained Minister by Wo’se Community of the Sacred African Way. It was vital that my feet touch the soil of Kemet and my spirit connect with the continent’s people before ordination.
Since 2022, I’ve made six trips to Afrika. During my travels, I became a benefactor to Abeadze State College (ASC) in Abeadze Dominase, Ghana, originally founded by Daasebre Kwebu Ewusi VII, Paramount Chief of Abeadze Traditional Area and now run by the government. The students there were having trouble with English courses, which are mandatory. The Ghanaian Minister of Education endorsed a novel written by 18-year-old female Ghanaian first-time writer, Nhyira Esaaba Essel, titled Black Queen Sceptre. The idea was that if the students had something more interesting to read, it would evoke a passion for reading; this seemed reasonable to me. Offer students something exciting and imaginative, combined with instructors committed to their success and this could work.
The challenge is how to acquire 800 books?!
I was finishing another project for ASC, so my cash was thin and I was devoid of time to apply for annual grants. I sat on my porch in West Oakland, as I often do, when I’m feeling for and connecting to my ancestors. On quiet nights, I reminisce about the neighborhood I grew up in. Across the street from my house was the house that my Godfather, Baba Dr. Wade Nobles and family lived in, which later became The Institute for the Advanced Study of Black Family Life & Culture (IASBFLC). Then, it came to me…ancestors invited me to reach out to The Association of Black Psychologists – Bay Area Chapter (ABPsi-Bay Area)! It was a long shot but worth it!
I was granted an audience with the local ABPsi Board, who ultimately approved funding for the book project with a stipulation that the Board read the book and a request to subsequently offer input as to how the book would be implemented at ASC. In this moment, my memory jet set to my first ABPsi convention around 2002, while working for IASBFLC. Returning to the present, I thought, “They like to think because it feels good, and then, they talk about what to do about what they think about.” I’m doomed.
However, I came to understand why reading the book and offering suggestions for implementation were essential. In short: ABPsi is an organization that operates from the aspirational principles of Ma’at with aims of liberating the Afrikan Mind, empowering the Afrikan character, and enlivening: illuminating the Afrikan spirit. Their request resulted in a rollout of 400 books in a pair-share system. Students checked out books in pairs, thereby reducing our bottom line to half of the original cost because we purchased 50% fewer units. This nuance promoted an environment of Ujima (collective work & responsibility) and traditional Afrikan principles of cooperation and interdependence. The student’s collaborative approach encouraged shared responsibility, not only for the physical book but for each other’s success. This concept was Dr. Lawford Goddard’s, approved by the Board, with Dr. Patricia “Karabo” Nunley at the helm.
We effectively facilitated cross-continent community building! We met the call and provided 400 books for ASC’s students at the call of the Minister of Education. We supported the work of a new African writer whose breakout novel is an action-packed depiction of a young woman steeped in Ghanaian culture who travels to the USA for college, all the while experiencing the twists, turns, and uncertainties that life brings. (A collectible novel for all ages). A proposed future phase of this collaborative project is for ASC students to exchange reflective essays on Black Queen Sceptre with ABPsi Bay Area members.
We got into good trouble. To order Black Queen Sceptre, email esselewurama14@gmail.com.
I became an ordained Minister upon returning from my initial pilgrimage to Afrika. Who would have imagined that my travels to Afrika would culminate in me becoming a citizen of Sierra Leone and recently being named a Chief Mpuntuhene under Daasebre Kwebu Ewusi VII, Paramount Chief of Abeadze Traditional Area in Ghana, where I envision continued collaborations.
Min. Rauna/Chief Mpuntuhene is a member of ABPsi Bay Area, a healing resource committed to providing the Post Newspaper readership with monthly discussions about critical issues in Black Mental Health, Wealth & Wellness. Readers are welcome to join us at our monthly chapter meetings every 3rd Saturday via Zoom and contact us at bayareaabpsi@gmail.com.
Black History
Alice Parker: The Innovator Behind the Modern Gas Furnace
Born in Morristown, New Jersey, in 1895, Alice Parker lived during a time when women, especially African American women, faced significant social and systemic barriers. Despite these challenges, her contributions to home heating technology have had a lasting impact.
By Tamara Shiloh
Alice Parker was a trailblazing African American inventor whose innovative ideas forever changed how we heat our homes.
Born in Morristown, New Jersey, in 1895, Parker lived during a time when women, especially African American women, faced significant social and systemic barriers. Despite these challenges, her contributions to home heating technology have had a lasting impact.
Parker grew up in New Jersey, where winters could be brutally cold. Although little is documented about her personal life, her education played a crucial role in shaping her inventive spirit. She attended Howard University, a historically Black university in Washington, D.C., where she may have developed her interest in practical solutions to everyday challenges.
Before Parker’s invention, most homes were heated using wood or coal-burning stoves. These methods were labor-intensive, inefficient, and posed fire hazards. Furthermore, they failed to provide even heating throughout a home, leaving many rooms cold while others were uncomfortably warm.
Parker recognized the inefficiency of these heating methods and imagined a solution that would make homes more comfortable and energy-efficient during winter.
In 1919, she patented her design for a gas-powered central heating system, a groundbreaking invention. Her design used natural gas as a fuel source to distribute heat throughout a building, replacing the need for wood or coal. The system allowed for thermostatic control, enabling homeowners to regulate the temperature in their homes efficiently.
What made her invention particularly innovative was its use of ductwork, which channeled warm air to different parts of the house. This concept is a precursor to the modern central heating systems we use today.
While Parker’s design was never fully developed or mass-produced during her lifetime, her idea laid the groundwork for modern central heating systems. Her invention was ahead of its time and highlighted the potential of natural gas as a cleaner, more efficient alternative to traditional heating methods.
Parker’s patent is remarkable not only for its technical innovation but also because it was granted at a time when African Americans and women faced severe limitations in accessing patent protections and recognition for their work. Her success as an inventor during this period is a testament to her ingenuity and determination.
Parker’s legacy lives on in numerous awards and grants – most noticeably in the annual Alice H. Parker Women Leaders in Innovation Award. That distinction is given out by the New Jersey Chamber of Commerce to celebrate outstanding women innovators in Parker’s home state.
The details of Parker’s later years are as sketchy as the ones about her early life. The specific date of her death, along with the cause, are also largely unknown.
Activism
2024 in Review: Seven Questions for Frontline Doulas
California Black Media (CBM) spoke with Frontline Doulas’ co-founder Khefri Riley. She reflected on Frontline’s accomplishments this year and the organization’s goals moving forward.
By Edward Henderson, California Black Media
Frontline Doulas provides African American families non-medical professional perinatal services at no cost.
This includes physical, emotional, informational, psychosocial and advocacy support during the pregnancy, childbirth and postpartum period. Women of all ages — with all forms of insurance — are accepted and encouraged to apply for services.
California Black Media (CBM) spoke with co-founder Khefri Riley. She reflected on Frontline’s accomplishments this year and the organization’s goals moving forward.
Responses have been edited for clarity and length.
Looking back at 2024, what stands out to you as your most important achievement and why?
In 2024, we are humbled to have been awarded the contract for the Los Angeles County Medical Doula Hub, which means that we are charged with creating a hub of connectivity and support for generating training and helping to create the new doula workforce for the medical doula benefit that went live in California on Jan. 1, 2023.
How did your leadership and investments contribute to improving the lives of Black Californians?
We believe that the revolution begins in the womb. What we mean by that is we have the potential and the ability to create intentional generational healing from the moment before a child was conceived, when a child was conceived, during this gestational time, and when a child is born.
And there’s a traditional saying in Indigenous communities that what we do now affects future generations going forward. So, the work that we do with birthing families, in particular Black birthing families, is to create powerful and healthy outcomes for the new generation so that we don’t have to replicate pain, fear, discrimination, or racism.
What frustrated you the most over the last year?
Working in reproductive justice often creates a heavy burden on the organization and the caregivers who deliver the services most needed to the communities. So, oftentimes, we’re advocating for those whose voices are silenced and erased, and you really have to be a warrior to stand strong and firm.
What inspired you the most over the last year?
My great-grandmother. My father was his grandmother’s midwife assistant when he was a young boy. I grew up with their medicine stories — the ways that they healed the community and were present to the community, even amidst Jim Crow.
What is one lesson you learned in 2024 that will inform your decision-making next year?
I find that you have to reach for your highest vision, and you have to stand firm in your value. You have to raise your voice, speak up and demand, and know your intrinsic value.
In a word, what is the biggest challenge Black Californians face?
Amplification. We cannot allow our voices to be silent.
What is the goal you want to achieve most in 2025?
I really would like to see a reduction in infant mortality and maternal mortality within our communities and witness this new birth worker force be supported and integrated into systems. So, that way, we fulfill our goal of healthy, unlimited birth in the Black community and indeed in all birthing communities in Los Angeles and California.
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