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Poor Communities Lose Billions to Predatory Lenders

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Payday lenders and pawn shops are more common in poor neighborhoods (Wikimedia Commons)

Payday lenders and pawn shops are more common in poor neighborhoods (Wikimedia Commons)

 

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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Oakland Post: Week of August 12 – 18, 2026

The printed Weekly Edition of the Oakland Post: Week of August 12 – 18, 2026

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California Hispanic Chambers of Commerce Unveils: ‘Powering the Future’ Theme for 47th Annual Statewide Convention

POST NEWS GROUP — For nearly 50 years, the CHCC has been the frontline champion of California’s small-business ecosystem. As the economic landscape evolves, “Powering the Future” signals bold momentum—emphasizing the innovation, resilience, and leadership needed to fuel the next generation of entrepreneurs and community leaders. The theme bridges the CHCC’s foundational advocacy over the past 47 years with a strategic vision for rapid economic transformation.

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Luis Zambrana, McDermott Costa Insurance; Leo Callejas, California Hispanic Chambers of Commerce (CHCC) Northern Region chairperson; Karen Guzman, Aliza Gallo, board director, Oakland Latino Chamber of Commerce (OLCC); Julian Cañete, president and CEO of CHCC; Sharon Fonseca, OLCC board director. Courtesy photo.

The premier August event in Oakland will unite business leaders, policymakers, and innovators to drive the next generation of California’s economic growth.

The California Hispanic Chambers of Commerce (CHCC) has officially announced “Powering the Future” as the theme for its 47th Annual Statewide Convention. The landmark event will be held August 19-21 at the Oakland Marriott City Center in Oakland, California. 

For nearly 50 years, the CHCC has been the frontline champion of California’s small-business ecosystem. As the economic landscape evolves, “Powering the Future” signals bold momentum—emphasizing the innovation, resilience, and leadership needed to fuel the next generation of entrepreneurs and community leaders. The theme bridges the CHCC’s foundational advocacy over the past 47 years with a strategic vision for rapid economic transformation. 

Driving Innovation and Economic Influence

As California leads global trends in technology, clean energy, and entrepreneurship, Hispanic-owned businesses are at the helm. From harnessing artificial intelligence and accelerating digital transformation to pioneering sustainable practices, Latino entrepreneurs are actively shaping tomorrow’s industries.

“Hosting this convention in Oakland is deeply meaningful,” said Noel Gallo, who represents Council District 5. “Approximately 28% of Oakland’s population is Latino, and their contributions shape every aspect of our civic, cultural, and economic life.”

Latino‑owned businesses are central to our city’s growth; they drive job creation, revitalize commercial corridors, strengthen neighborhood identity, and contribute to innovation across sectors including construction, hospitality, education, retail, arts, professional services, and more, Gallo asserts.

“These enterprises do more than generate revenue; they anchor family legacies, nurture community pride, and create spaces where culture and commerce meet,” Gallo said.

“Following a period of significant economic transformation, ‘Powering the Future’ is more than a theme—it is a collective call to action,” said Julian Cañete, president and CEO of the CHCC. “Our businesses and future leaders aren’t merely adapting to change; they are driving it. This convention will showcase the innovation and leadership needed to build a stronger, more prosperous California for generations to come.”

Cañete is also excited to have Oakland as the organization’s host city. Noting Oakland’s historical significance and deep-rooted diversity “From its legacy as center of social movements to its modern identity as a hub for innovation, sustainability, and small business growth, Oakland embodies the resilience and creativity that define our state,” Cañete added. “We are proud to contribute to this dynamic community’s ongoing momentum and economic vitality.” 

Three Days of Impact, Connection, and Advocacy

The CHCC Annual Convention empowers Hispanic and diverse businesses and communities while fostering connections and advancing economic opportunities. The convention features impactful presentations on business development, current business trends, economic and community development, and policy-oriented discussions.

Attendees can connect with business leaders, thought leaders, elected officials, and other Hispanic and diverse small business and community leaders. Participants establish strategic, long-lasting partnerships through direct personal engagement, best-practice sharing, interactive dialogue, networking workshops, and more.

The agenda includes an annual business matchmaking program, dynamic panels and speakers, an exhibition hall, awards ceremonies, and meal events highlighting the remarkable achievements of Hispanic and diverse businesses and communities.

The CHCC Annual Awards celebrate Hispanic and diverse companies and communities for their hard work, ingenuity, dedication, and contributions to California’s economy. The CHCC Annual Convention also aims to advance a diverse supply chain and create expanded business opportunities for diverse entrepreneurs and communities.  

The Oakland Hispanic Chamber of Commerce is the source for this report.

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Returning to Its Roots, the Oakland Black-Eyed Pea Festival Partners with the Freedom Farmers Market Sept. 12

POST NEWS GROUP — Freedom Farmers’ Market (FFM) vendors sell produce and promote wellness and nutrition through organic herbs, massage, and other gift items from July through October on the second and fourth Saturdays at a dozen canopies in the last block of Shattuck Avenue, where it merges with Telegraph Avenue.

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Elaine Smith, executive director of Farms to Grow, Inc., holds T-shirt for Ki’Ara LaFitte, winner of the Freedom Farmers’ Market Watermelon-Eating Contest at the season opening on July 11. Courtesy photo.

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The Oakland Black-Eyed Pea Festival (BEPF), a celebration of African American traditional music, food and art, will return to its roots through a partnership with Farms to Grow, Inc., the hosts of the Freedom Farmers’ Market on Sept. 12.

Now in its 11th year, the downsized festival sponsored by Omnira Institute will open with presentations by Wakan Wiya Two-Spirit Drum, a drum invocation for the ancestors by Awon Ohun Omnira, a performance by Andre Thierry of Accordion Soul, and most importantly, fresh black-eyed peas for sale.

Freedom Farmers’ Market (FFM) vendors sell produce and promote wellness and nutrition through organic herbs, massage, and other gift items from July through October on the second and fourth Saturdays at a dozen canopies in the last block of Shattuck Avenue, where it merges with Telegraph Avenue.

Over the years, FFM vendors have appeared at the Black-Eyed Pea Festival and vice versa, so this collaboration is like a family reunion.

Farms to Grow, Inc. Executive Director Elaine Smith said the collaboration with Omnira Institute was an opportunity she couldn’t refuse. “People talk about community and unity for Black people – I always want to be an example of what has to be done,” Smith said. “Anyway that we can partner with our people, we want to do that.”

Charlotte Jackson, a longtime vendor with FFM and the festival, had been known for her jellies, jams and chow-chow through Pots n’ Jars. For the last several years, she hasn’t been able to find a commercial kitchen she can afford, so she began selling vegan soap and skin care products that her son and his partner produce under the name Lather and More.

“It’s been a blessing,” said Jackson, who will tell her customers that although they can order the wares from the website, there’s no such thing as ‘smell-avision.” From her table, she encourages passers-by to take a sniff of the soaps, then directs them to the nearby booths.

Jackson functions as a sort of ‘town crier’ of ‘buying Black,’ never failing to encourage Black people to take their mule or Pontiac or Chevrolet and steer it toward Black businesses like Mandela Market.

Likewise, the Black-Eyed Pea Festival was established to encourage Black entrepreneurship by providing a space for Black creatives to sell their handmade or original designs and products without competing with commercially produced goods.

It also served as a way to both commemorate and invigorate memory of the once-thriving Black community of West/North Oakland before it was divided by highways, BART, and then ravaged by the crack cocaine epidemic.

“For one day, I wanted to invoke the success of that community through the sound of music, the taste of soul food and black-eyed peas and the beauty of our art,” Ravernell said.

Once deciding to follow through on the idea of holding a festival celebrating African American traditions, Ravernell settled on using the black-eyed pea as its symbol because of its pride of place in Black people’s consciousness on New Year’s Day and because the peas were originally cultivated in Africa.

Learning that Fresno farmer Wil Scott, former president of the California African American Farmers Association, grew black-eyed peas as well as other legacy crops that are the foundation of a soul food menu, Ravernell was intent on ensuring Scott’s presence at the first festival in 2014. Whenever he could, and whenever the weather yielded a bountiful crop, Scott would bring his black-eyed peas to the festival, shelled or on the pods.

Originally cultivated in Africa, the black-eyed pea is believed to have been brought to the U.S. hidden in the hair of African captives brought to the Western Hemisphere during the holocaust of the Atlantic Slave Trade.

Known to grow plentifully even in poor soil, the pea was associated with abundance in Africa and later, in the U.S., with good luck.

She also learned that black-eyed peas nourish poor soil, that they are a very good source of nutrition, and that they probably contributed to the longevity of the enslaved.

“I thought the black-eyed pea, its story and its significance for Black people made it a great symbol to represent Black culture,” she said. In spite of everything they endured, Black people emerged from slavery and Jim Crow as masters of making a lot from a little, creating a culture that would be emulated and imitated at home and abroad.

Feeling that many people know only the most recent iterations of Black music – Hip Hop and R&B – she created the festival to promote the music of earlier eras, which reflect the thoughts and feelings of Black people over time.

That’s why the festival highlights straight-ahead jazz, gospel, zydeco and the Second Line of the New Orleans jazz funeral.

“It’s not enough to remember,” Ravernell said. “We need to actively nourish the roots of our culture.”

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