Predatory Lending Preys Mostly on the Poor, Including Native Communities
NOTE: This is a guest post from Andrea Wieland, Communications Specialist at the First Nations Development Institute.
Recently, I posted some information to our Facebook page about efforts to protect Native American communities from predatory lending practices, which is something my organization has been battling for more than a decade.
In response, one of our readers posted this comment: “Yes, by all means, let’s deny the working poor access to emergency cash when they need it!”
Say what? I believe this reader failed to understand that poor people are not just getting emergency cash when they need it. They are also being sucked into a deep, swirling pool that they may not be able to get out of. This vortex will just keep pulling them further and further down into the pits of financial despair.
Predatory lending isn’t about helping poor people in emergency situations; it’s about taking as much money as one can from a desperately poor person. Charging someone up to 300% interest isn’t a fair profit; it’s taking gross and unfair advantage of the downtrodden.
First Nations’ efforts against predatory lending are not about taking options away from the poor but about the development of sound alternatives for borrowing. In particular, our program demonstrates how Native people – many of whom are under-banked or unbanked – can have access to fair lending practices as well as a host of other services. These can include small-business loans that provide much-needed capital to Native communities as they create and build stronger tribal economies. Our efforts also aim at educating Native peoples about how to properly save money, invest, borrow money, and evaluate their situations for their own betterment rather than lining the pockets of predatory lenders and, in some cases, unscrupulous tax preparers who divert much needed cash from Native communities – cash that normally would benefit all of the community.
Beyond this issue, Native communities have suffered for a long time from other inequalities, including a forced dependency upon the government. Thus, the government sector has long been the only or dominant “leg of the stool” in many Native economies, and that has stunted economic development for decades. Today we all recognize that truly strong and functioning economies need a fully developed three-legged stool that also includes for-profit businesses and nonprofit organizations. First Nations’ efforts aim to strengthen those economies by helping develop those other sectors in a culturally appropriate way. That’s why our guiding belief is stated this way: “We believe that when armed with the appropriate resources, Native peoples hold the capacity and ingenuity to ensure the sustainable, economic, spiritual and cultural well-being of their communities.”
Healthy Native economies are good for everyone in America, Native and non-Native alike. So let’s all work together to give our First Americans the opportunity to thrive yet again.
Photo courtesy of the First Nations Development Institute.