Credit Where It's Due: Rethinking Financial Citizenship

Credit Where It's Due: Rethinking Financial Citizenship


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An estimated 45 million adults in the U.S. lack a credit score at time when credit invisibility can reduce one’s ability to rent a home, find employment, or secure a mortgage or loan. As a result, individuals without credit—who are disproportionately African American and Latino—often lead separate and unequal financial lives. Yet, as sociologists and public policy experts Frederick Wherry, Kristin Seefeldt, and Anthony Alvarez argue, many people who are not recognized within the financial system engage in behaviors that indicate their credit worthiness. How might institutions acknowledge these practices and help these people emerge from the financial shadows? In Credit Where It’s Due, the authors evaluate an innovative model of credit-building and advocate for a new understanding of financial citizenship, or participation in a financial system that fosters social belonging, dignity, and respect.
Wherry, Seefeldt, and Alvarez tell the story of the Mission Asset Fund, a San Francisco-based organization that assists mostly low- and moderate-income people of color with building credit. The Mission Asset Fund facilitates zero-interest lending circles, which have been practiced by generations of immigrants, but have gone largely unrecognized by mainstream financial institutions. Participants decide how the circles are run and how they will use their loans, and the organization reports their clients’ lending activity to credit bureaus. As the authors show, this system not only helps clients build credit, but also allows them to manage debt with dignity, have some say in the creation of financial products, and reaffirm their sense of social membership. The authors delve into the history of racial wealth inequality in the U.S. to show that for many black and Latino households, credit invisibility is not simply a matter of individual choices or inadequate financial education. Rather, financial marginalization is the result of historical policies that enabled predatory lending, discriminatory banking and housing practices, and the rollback of regulatory protections for first-time homeowners.
To rectify these inequalities, the authors propose common sense regulations to protect consumers from abuse alongside new initiatives that provide seed capital for every child, create affordable short-term loans, and ensure that financial institutions treat low- and moderate-income clients with equal respect. By situating the successes of the Mission Asset Fund in the larger history of credit and debt, Credit Where It’s Due shows how to prioritize financial citizenship for all.

Product Details

ISBN-13: 9780871548665
Publisher: Russell Sage Foundation
Publication date: 04/26/2019
Edition description: 1
Pages: 160
Sales rank: 917,751
Product dimensions: 6.00(w) x 9.00(h) x 0.60(d)
Age Range: 3 Months to 18 Years

About the Author

Frederick F. Wherry is professor of sociology at Princeton University.
Kristin S. Seefeldt is associate professor of social work and associate professor of public policy at the University of Michigan.
Anthony S. Alvarez is assistant professor of sociology at California State University, Fullerton.

Table of Contents

About the Authors vii

Foreword José A. Quinonez ix

Acknowledgments xiii

Prologue xv

Introduction: Separate and Unequal 1

Chapter 1 The Invisible Worth of People with No Credit 22

Chapter 2 Giving Brown People Credit: Racialized Histories of Money, Credit, and Disadvantage 39

Chapter 3 Turning Disregarded Practices into Transformative Tools: Mission Asset Fund's Lending Circles 65

Chapter 4 Becoming Creditable, Being an Equal 80

Chapter 5 Conclusion: What We Must Do 99

Epilogue 113

Photographs 115

Appendix A The Interviewees 123

Appendix B Mission Asset Fund Programs Application 125

Notes 135

References 143

Index 153

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