Exploring Race, Capitalism, and Financial Access in US Cities

• In Event: Racial Capitalism and Urban Politics

Abstract

What are the political consequences of using financial products in the context of race and capitalism? Payday lenders, check cashers, and other fringe economy services have always garnered negative attention because they are considered more expensive than traditional banking and target the poor, the credit poor, and racial minorities. Research has made clear that neighborhood conditions affect racial and economic inequality. I argue that the historical development associated with the growth of high-cost services, such as those in the fringe economy (e.g., payday loans, pawnshops), shaped the quality and quantity of financial products provided by markets across U.S. cities overall. By tracing the emergence of high-cost financial products and mapping their contemporary placement, I identify the process of creating extractive financial technologies that first target the poor and credit-poor, disproportionately racial minorities, and how they become more efficient at extraction. These practices are then adopted into other markets to include groups previously not targeted by such practices. By centering race and capitalism, this analysis helps to deepen our understanding of urban political economy and everyday life.

Author

• Patricia Posey, University of Chicago