While there are numerous factors, we can blame for the huge general wealth gap existing between Whites and Blacks in this country, we cannot deny this gap was racially motivated and largely carried out by the lending institutions in this country.
It was bad enough that enslaved Blacks were denied pay and treated as chattel for centuries. But when eventually emancipated, they were penalized by our banks and lending institutions who denied them loans or unfairly limited the amount of the loans. These lending institutions single-handedly acted as conduits catering to discriminatory practices and white supremacy. You had states passing legislation that catered to discriminatory policies and laws that encouraged and supported banks from treating Blacks fairly.
While all our institutions reek of the practices of systemic discrimination and racism, none can be more pervasive than lending institutions in carrying out this practice. Such practices have kept Blacks at an economic disadvantage. No one can argue that homeownership is one of the biggest factors contributing to generational wealth. Historically, time and time again, the practice has shown that lending institutions unfairly denied many qualified Blacks loans while granting loans to many Whites who were less qualified.
Even when lending institutions granted Blacks loans, the interest rates were extremely high or they only approved small loans for Blacks to buy a home in a designated, segregated area devoid of a prominent White neighborhood. Of course this affected the property values making property values in Black neighborhood less valuable, especially as it relates in promoting generational wealth.
These same lending institutions have always found ways to fraudulently aid in the stealing and taking back of Black homes and properties with lies and deception. For example: Blacks who could not read or write unknowingly signed away the deeds to their properties. Often banks were unwilling to work with Blacks who might be slightly behind or late. Calling in loans and unsavory foreclosure practices aided in causing many Blacks to lose their properties. There were often situations in which the banks refused to work with Blacks who were late in their payments.
Banks and lending institutions must also take responsibility for their role in contributing to slums and ghettos in many of our major cities. They literally co ntrol where people can live as well as controlling who and who cannot own a business.
Historically, as well as now, laws are being legislated to ensure equal and fair lending policies which don’t discriminate; however, far too many lending institutions continue to be guilty of this practice. Predatory lending institutions often found in predominantly Black neighborhoods claim to be our friends, offering those with poor or no credit and in dire circumstances loans—but at exorbitant interest rates.
Some would claim predatory lending institutions are doing the Black community a favor by hiring Blacks and investing in institutions and businesses in the community to offset taking advantage of those desperately in need—those having no other place to go. Some Blacks are quick to support these predatory lenders, claiming that while we might be being used, at least we are getting something out of it. Also, where are those in need suppose to go.
It is the exorbitant interest rates these predatory lending institutions charge that are the problem. While Blacks will probably never equal Whites in generational wealth, we must undo any obstacle keeping Blacks from further achieving the wealth that they have historically been denied and cheated from obtaining.
We must all agree that we can no longer continue to overlook the role of the lending institutions in this country concerning their unfair treatment of Blacks. The truth of the matter is that some form of reparations is due to Blacks who are descendants of enslaved Blacks. This would help to make up for this gross injustice, contributing to the unequal accumulation and distribution of generational wealth. Maybe banking and lending institutions can help make amends and aid in correcting the great injustice to Blacks carried out by their institutions.