We’re stunned
November 10, 2008 | Center for Responsible Lending, Consumer Federation of America, customers, employees, industry, industry critics, media coverage | Comments (0)An in depth and balanced piece in Sunday’ New York Times Magazine. It looks at the checking cashing/payday lending phenomenon through the eyes on one businessman, Tom Nix, of Southern California. From the piece:
Today’s financial crisis has many origins. But here’s one cause that is often overlooked: Traditional bankers badly misread the market for financial services in low-to-moderate-income communities. “Banks have been approaching these customers purely from a short-term-gain perspective, and they’ve missed opportunities,” Matt Fellowes, director of the Pew Safe Banking Opportunities Project, told me. Banks declined to offer small, simple lines of credit to poor and blue-collar customers, leaving them to payday lenders, while they pushed high-limit, high-interest credit cards on everyone and acquired hundreds of billions in subprime debt.
It’s long, but well worth the read.
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