The 2007 banking collapse exposed the abysmal gap between the titans of finance and the 99 percent. But long ago, there was one place where Wall Street and Main Street intersected: at the teller window of your local retail bank. Some community activists want to pull Wall Street back toward an era when banking was done by real people, and retail banks invested in the neighborhood instead of pushing consumers into foreclosure. Can we bring back your friendly bank teller?
Seven years since Wall Street imploded, it seems the banking sector has rebounded far faster than the communities it has devastated, according to a report published by Center for Popular Democracy (CPD), which builds on a global campaign to advocate for fair labor and corporate accountability in Big Banks.
The report finds that poor communities tend to be both underbanked and overexploited by banks. Though lenders no longer give away subprime mortgages like candy, bank chains still degrade vulnerable consumers. Roughly a quarter of households nationwide are considered unbanked or underbanked, lacking access to basic financial resources like a checking account. Big Banks instead market relatively high-risk financial products to the poor, while ignoring the essential economic vehicles that help build assets prudently and realistically. Despite their relatively paltry wealth, among the hardest hit by the financial collapse were low-income communities of color. “The median net worth for people of color fell 53 percent during the Great Recession [but] for whites fell only 16 percent,” CPD reports. But today the leading Big Banks have ironically “emerged stronger and more consolidated, rather than being fundamentally restructured.”
Yet banks aren’t just evil faceless corporations; they’re made up of real people, often staffed with the same 99 percent as the consumers they serve. But your average teller or customer service agent is often still restrained by the structural inequities built into the financial system. Bank workers say they are pressured to track people toward high-risk credit schemes that may erode the wealth of the community. Wall Street is less interested in “low margin” services like a simple checking account, and focused on marketing higher-yield products like credit cards and high-cost mortgages.
“These practices,” CPD states, “are known to prompt predatory banking practices that have a negative impact on consumers, the economy and the workers forced to push them on their communities.” The hard sell on risky credit schemes is moreover accompanied by a withdrawal of basic retail services, as large bank chains downsize their operations in less profitable neighborhoods.