Why Should the Poor Trust Our Institutions?

January 7, 2015

When I started working at Legal Aid and later at the Innocence Project, I understood that the communities weserved harbored some mistrust for authority figures. At least, I understood it on an intellectual level, as a descriptive fact about the communities and the people who lived there. The more people I get to know, the more clients and witnesses I meet–the more I pay attention to what is actually happening here– the more I really do start to understand and feel this mistrust on a deeper level. Why would you trust your money to a bank, when that bank just sold you subprime refinancing loan with predatory terms– not because you couldn’t qualify for a better loan, but as part of an intentional scheme to rip equity away from low-income black neighborhoods?

A recent New York times article described the scheme to manipulate low income people of color into “qualifying” for sub-prime loans.

“Wells Fargo, Ms. Jacobson said in an interview, saw the black community as fertile ground for subprime mortgages, as working-class blacks were hungry to be a part of the nation’s home-owning mania. Loan officers, she said, pushed customers who could have qualified for prime loans into subprime mortgages. Another loan officer stated in an affidavit filed last week that employees had referred to blacks as “mud people” and to subprime lending as “ghetto loans.”

“We just went right after them,” said Ms. Jacobson, who is white and said she was once the bank’s top-producing subprime loan officer nationally. “Wells Fargo mortgage had an emerging-markets unit that specifically targeted black churches, because it figured church leaders had a lot of influence and could convince congregants to take out subprime loans.””

The NAACP along wih others filed suit against over twelve banks charging systematic racial discrimination.

Multiple cases against mortgage banks for this practice— including cases brought by the US Justice Department– have since been settled.

This egregious abuse of power to manipulate the poor into contributing to the wealth of businesses violates the human rights of vulnerable U.S. citizens. At the same time, we appreciate responsible reporting that brings these abuses to light.

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Brian Howe, Economics and Race