WS Chronicle

By Charlene Crowell

The nationwide protests against the heinous killing of George Floyd by a Minneapolis policeman is reminiscent of the 1960’s era of turmoil and voices that fervently called for social and economic justice. Today’s turbulent times seem that history is repeating itself. 

In addition to George Floyd, recent tragedies took the lives of a black Louisville EMT in the middle of the night while she was asleep in her own bed. In another fatal incident, a young black Georgia man jogging in daylight was shot dead. None of these three unarmed people deserved to die violently.

For Dr. Martin Luther King, Jr., a book begun in 1966 while he was living in a Chicago tenement reflected similar chaotic challenges against a backdrop of seething racial resentments. Published the following year and entitled, “Where Do We Go from Here: Community or Chaos?”, Dr. King drew upon his visits to cities across the nation to pen how substandard housing, failing schools, a dearth of job opportunities, and a myriad of other ills erupted into bloody riots.  

Then and today, violence is broadly condemned, but there still seems to be little concern or justification for the resulting backlash of militarized communities or a president who has yet to grasp that black lives matter. 

So once again, the question, “Where do we go from here?” is both timely and poignant.

For more than 386 organizations, a written appeal to congressional leaders noted that over the past year, more than 1,000 people were shot and killed by police. Facilitated by the Leadership Conference on Civil and Human Rights and led by the NAACP Legal Defense Fund, the June 1 letter called on Congress to “rectify these structural wrongs through legislation before another black life is needlessly lost.”

But police violence is not the only problem that needs to be eradicated. People who riot are usually those who have no hope. The most dangerous person is not the one who lost a job, but rather the one who has no hope that another can be found.  

Since March, 40 million people have sought unemployment benefits. This monumental surge has exceeded states’ technological capacity to swiftly process these claims, resulting in multiple attempts to use online systems and lengthy waits, often 30 days or more. Although federal stimulus checks were intended to provide a much-needed cash infusion, many consumers were forced to endure another lengthy wait for this benefit. 

Further, America’s legion of working poor often holds multiple jobs because stagnant low wages have failed to keep pace with the rising cost of living. Today’s federal minimum wage is still $7.25 an hour. In many cases, these are the same workers who walk or rely upon public transit where available to reach their places of employment. It should also be noted that these workers comprise many of those who have not had the option of working from home during the COVID-19 pandemic. Often, many who were forced to work during the pandemic have not been financially compensated with hazard pay while working during the public health crisis. 

While these Americans jeopardize the health of themselves and their families, Congress continues to brush aside attempts to raise the minimum wage or fund infrastructure that could create jobs while improving transit, roads and bridges. 

By contrast, investment and corporate interests have seen swift governmental adjustments.

Several monied interests received significant funds through the Paycheck Protection Program, even as many small businesses – particularly owned by blacks and Latinos – struggled to access the aid. After the public outcry, the Treasury Department publicly called for approved multi-million- dollar loans to be returned. The Federal Reserve also took a previously unused action of buying corporate debt, ultimately saving the firms billions in borrowing costs.

Over the years, this column has reported on racial disparities in homeownership, family wealth, the lack of access to affordable credit, and the pattern of alternative financial services preying upon communities of color by charging triple-digit interest rates on small-dollar loans. Sadly, during the pandemic, this financial exploitation has persisted and falls on those hardest hit with job losses, illnesses and loss of life.

For example, as many low-income people and especially those of color realized that competitive jobs markets essentially required skills and training to access gainful employment, millions were snookered into enrolling in costly for-profit colleges that failed to deliver the training or credentials necessary to live financially independent lives. With low graduation rates, many of these former students incurred deep debt without the requisite skills nor a degree that enable them to secure employment with adequate wages to repay their loans. Just as after the Great Recession, emerging signs indicate that this industry will once again achieve explosive growth in the midst of widespread economic insecurity. 

Despite recent and bipartisan support in Congress, the Trump Administration again chose to shield predatory for-profit institutions at the expense of students and taxpayers. Last week, the Administration vetoed a recent measure to overturn a 2019 rule that would weaken accountability for these institutions. This action also prevents defrauded students from access to financial relief. The 2019 rule overhauled a previous one adopted during the Obama Administration that ensured direct and corrective response to release former for-profit students from the educational debts incurred by false promises.

“If Congress doesn’t override the President’s veto,” noted Ashley Harrington, federal advocacy director and senior counsel with the Center for Responsible Lending (CRL),  “Secretary DeVos’ 2019 harmful Borrower Defense Rule will go into effect this summer, making it nearly impossible for future defrauded students to access relief and taxpayers to recoup their wasted and misused dollars.” 

Similarly, the Department of Justice under the current administration, has not pursued cases of discrimination. Where former Attorney General Eric Holder went to Ferguson, Missouri, to find out first-hand that community’s racial tensions in policing, current Attorney General William Barr has been conspicuously silent and invisible.

Under the current administration, regulations that held illegal businesses accountable for financial exploitation have been removed or weakened. The Consumer Financial Protection Bureau (CFPB), created to be the consumer’s financial watchdog in the marketplace, has consistently acted in the interest of businesses instead of people, holding that consumer information – not protection or enforcement – is their watchword.

Additionally, the Office of the Comptroller of the Currency recently followed through with its plan to dramatically overhaul the Community Reinvestment Act, which will cause further financial harms to low-to-moderate income families and communities of color.

The onus for achieving financial fairness rightfully rests with government. Consumers who have been victimized by profiteers should not be asked to conduct their own investigations and have no standing to prosecute whatever they might discover. 

All governments – federal, state, and municipal – need to do their jobs. At the same time, leaders in business and commerce have a role to play as well: advocating and ensuring that all consumers, regardless of race, have access to the credit they deserve. Just as the Federal Reserve took decisive action to support corporate and investor interests, working families are equally deserving of a governmental champion to unclog the blocks on benefits, loans and grants.

Right now, not sometime in the future, black businesses need ready access to available grant aid and credit through mainstream lending. Fortunately, in this market, there seems to be a window of opportunity for real change. 

Already a coalition of civil rights advocates that include the NAACP, Unidos, and CRL appealed to Congress to fix the Paycheck Protection Program by streamlining loan forgiveness for small loans and ensuring both reporting and data transparency. In addition, and to assist the very smallest businesses, the coalition supports instituting a minimum loan origination fee.

Now, while the nation awaits additional Congressional action, several major bank CEOs have begun speaking out about racism and their respective plans to ensure that institutionally, their operations can eliminate discrimination. But to date, there has been no large-scale or long-term banking program that offers the financial heft to effectively address the lack of credit – even as the black homeownership rate remains at 42%.

As Dr. King wrote, “[W]e need the vision to see in this generation’s ordeals the opportunity to transfigure both ourselves and American society … Let us be those creative dissenters who will call our beloved nation to a higher destiny … to a new plateau of compassion, to a more noble expression of humanness.”

Amen, Dr. King.

Charlene Crowell is a senior fellow with the Center for Responsible Lending. She can be reached at Charlene.crowell@responsiblelending.org.