PREDATORY LENDING

Black and Latino borrowers are more likely to get trapped in cycles of debt,

As a Black woman in America who was barely making ends meet, Ms. Lillie, who asked that we withhold her last name, was a target for high-cost lending. So much so that, one day, an offer showed up in her mailbox. A local lender in Greenville, South Carolina, where she lived, was offering her a loan.

In a just country, Lillie would not have needed the financial help. She had a stable job as a hospital staffer and a decent credit score. But her paycheck still left her short for her basic needs, and she was unable to make rent. Credit cards were an option, but as Lillie told the Prospect, a clerical miscommunication put her behind on her payments

By Ramenda Cyrus

with her bank, Wells Fargo. By the time it was corrected, she could no longer afford the payments. She could not drive—she used the bus to get around Greenville—and she was not good with using the internet to research her options. “I’m a baby boomer,” she said. “When I was growing up, we didn’t have computers, or laptops.”

One day, Lillie got on the bus and stopped at the lender who had sent the mailing, and took the $700 offered. It was not her first line of credit, but, as she told the Prospect, it was the first that sent her into a cycle of debt. And so it ensued: She’d take out new loans to pay off recurring expenses, including previous loans, and then take out more. Lillie began to feel overly burdened and depressed. “It made me feel like the world was on my shoulders,” she said.

A decade later, with more than $15,000 in debt, Lillie filed for bankruptcy at the age of 70. When asked if, knowing what she knows now, she would do it again, Lillie answered quickly: yes. And who really could be justified in blaming her? It was as simple as getting on the bus.

Many poor and working-class people have been involved with a predatory lender, or know someone who was. Often, these are people of color who—like Ms. Lillie—work, and still just cannot make ends meet.

Predatory loans rely on an information advantage. Lenders know how to manipu-