How the Other Half Banks Quotes

“In fact, the average unbanked family with an annual income of around $25,000 spends about $2,400 per year, almost 10 percent of its income, on financial transactions.”
― Mehrsa Baradaran, How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy

“Most significantly, the act exempted credit unions from the Community Reinvestment Act, an act aimed at providing banking access to low-income individuals.54 The exemption resulted directly from credit union lobbying. To repeat, the credit union industry, created to serve the poor, now fought against a law requiring it to serve the poor.”
― Mehrsa Baradaran, How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy

“The Freedman’s Savings Bank serves as a cautionary tale for government support of banking for the poor when that support is just a façade. Draping a flag over a building and then installing private profit-motivated management inside is the most dangerous sort of government support. It induces trust in a vulnerable customer base that not only suffers from financial loss, but also loses all faith in public institutions. It poisons true government efforts to help. A similar phenomenon was at the heart of the failure of the government-sponsored enterprises Fannie Mae and Freddie Mac during the recent financial”
― Mehrsa Baradaran, How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy

“We don’t worry about who manages the bank or what they do with our money. Even if we hear on the news that our bank has started to lend large sums of money to piano-playing cats, which we think is a bad idea, we would not feel the need to show up at the bank the next morning to ask for all of our money back. If you had lent your money to an individual and they in turn lent your money to piano-playing cats, you would demand your money back immediately. But because you deposit your money into a bank account insured by the federal government, you feel no need to keep a watchful eye on what your bank does with the money. Insurance removes the incentive for customers to police a bank. It can also remove the incentive for banks to police themselves because they do not bear the full or even the most serious consequences of their actions. Removing the natural tendencies of the market to notice and punish bad choices creates a moral hazard that may result in well-funded cats and other undetected market risks.”
― Mehrsa Baradaran, How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy