Banking on Minorities and the Poor
In the documentary film, New York: City of Tomorrow, we saw how banks helped to create the conditions for the emergence of slums in NYC. By providing better lending terms to people living in racially homogeneous neighbourhoods, banks essentially provided a structure of economic incentives that led whites to move to the suburbs and blacks and latinos to stay in increasingly segregated neighbourhoods in the inner city. In the post-War period, the system changed, but American banks continued to be roundly criticized for their failure to provide adequate lending to poor and minority groups. Lest we think this is merely an American problem, the Toronto Star showed last week that a similar phenomenon is evident in Toronto communities like Regent Park where banks have abandoned the poor. The problem might not always be abandonment, however. The Christian Science Monitor reports on a change underway in cities like Boston where banks increasingly see poor neighbourhoods as "the promised land - or at least the land of promises. Their airwaves are jammed with commercials urging residents to refinance and "cash out;" their telephone poles are papered with ads luring first-time buyers to apply for loans..." Needless to say, this binge is driven by a desire for profits and is being accompanied by increased numbers of foreclosures. How that will alter the spatialization of povery in the city remains to be seen.