In my last blog post, I responded to Ford Foundation president Darren Walker’s essay in which he outlines a new direction for the foundation and considers an important question about privilege. “How does (it) isolate us from engaging with the most difficult root causes of inequality and the poverty in which it ensnares people?” I suggested that we support cooperative economics for their “baked in” equitable structure and democracy of ownership. Today, I’ll push the case even further.
At a time of record profits, banks have closed scores of branches in central cities and rural communities, leaving people with few options to finance homes and businesses, or for basic checking and savings account services. Moreover, in its most recent survey of unbanked and underbanked households, FDIC found that more than one third of unbanked households reported their dislike of or distrust in banks as a reason they were unbanked. This environment has fueled a proliferation of under-regulated predatory financial companies with exorbitant loan rates.
This particular “market solution” is unacceptable. It is our responsibility–those of us in privileged positions–to make sure that people in distressed communities have access to standard, non-predatory financial services.
As CEO of Hope Credit Union, I see every day the devastating impacts of capitalism’s unequal favor for the rich over the poor, and the debilitating consequences of its market failures–on individuals and communities–in the Mid South, which is one of the nation’s most persistently poor regions. As the economist Gar Alperovitz asked in his 2013 book, What Then Must We Do?, “Can you ever have Democracy with a big D in any system if you don’t have democracy with a small d in the actual experience and everyday community life of ordinary everyday citizens?”
In our line of work, we regularly meet people who have made past decisions to borrow money for terms that just about guaranteed default, either because the rates were exorbitant or the payback timeline was unrealistic, or both. From positions of privilege like yours and mine, we have little understanding of the cognitive burden of poverty, and cannot fathom being under the kind of stress that would make us grab a short-term loan to fix a car that would down the line result in the car’s repossession, our wages being garnished, and our savings being seized.
James Baldwin eloquently described the phenomenon in 1961 in his collection, Nobody Knows My Name: “Anyone who has ever struggled with poverty knows how extremely expensive it is to be poor; and if one is a member of a captive population, economically speaking, one’s feet have simply been placed on the treadmill forever. One is victimized, economically speaking, in a thousand ways…”
During the Civil Rights Movement, the connection between economic freedom and political freedom became crystal clear to Fannie Lou Hamer. As soon as sharecroppers would register to vote, they were fired from their plantation jobs and thrown out of their homes. In the face of this economic retribution, Ms. Hamer and others in Sunflower County founded a cooperative farm, a pig bank, and a housing cooperative.
Cooperative economic structures offer access to opportunity for people in distressed communities, but they also offer something potentially even more powerful–agency. A member/owner is afforded dignity and participates in decision-making to promote individual and collective values.
In recent months, HOPE has taken steps to open new branches in the small Mississippi Delta towns of Drew, Moorhead, Itta Bena, and Shaw. When our HOPE member/owners step off the treadmill, they begin to climb a truly self-determined path toward educational attainment, home ownership, better employment, and wealth building.
A decision to significantly boost the capacity of cooperative economic institutions would preserve Andrew Carnegie’s vision that philanthropy could “place within (a distressed community’s) reach the ladders upon which the aspiring can rise” . . . yet leave behind the paternalistic view that only the wealthy capitalist knows the form that this aspiration should take.
Photo credit: MS Freedom Trail marker, courtesy of Visit Mississippi via flickr, CC BY-ND 2.0.
About the author more »
William (Bill) J. Bynum is CEO of HOPE (Hope Enterprise Corporation/Hope Credit Union), a regional community development financial institution and policy center that ensures access to responsible financial services for underserved communities across Arkansas, Louisiana, Mississippi and Tennessee. HOPE has generated more than $2 billion in financing that has benefited over 650,000 Mid-South residents and influenced community development policies and practices nationwide. Bill has advised Presidents Clinton, Bush and Obama on community development, small business and financial service matters, including serving for ten years as Chairman of the Treasury Department’s Community Development Advisory Board. He currently serves as Chairman of the Consumer Financial Protection Bureau’s Consumer Advisory Board. Other board/trustee service includes Corporation for Enterprise Development, NAACP Legal Defense Fund, Millsaps College, Mississippi Children’s Museum, and the William Winter Institute for Racial Reconciliation.