Maya Rockeymoore, president of the Center for Global Policy Solutions, a nonprofit advancing success for vulnerable populations, asks us be aware of the real economic picture for black women, even as we celebrate the success of women like Viola Davis, Taraji P. Henson and Kerry Washington.
While many of us have been fortunate enough to earn advanced degrees, climb the career ladder and find success, black women in America still “experience a profound lack of assets that places them at the bottom of the wealth scale,” Rockeymoore said in Forbes. “The vast majority of black women who make it to old age hobble into retirement destitute and in poor health.”
This extensive report, from ProPublica, on black Americans and predatory debt collection practices, tells at least part of story.
The Color of Debt: How Collection Suits Squeeze Black Neighborhoods
By Paul Kiel and Annie Waldman, ProPublica
ON A RECENT SATURDAY AFTERNOON, the mayor of Jennings, a St. Louis suburb of about 15,000, settled in before a computer in the empty city council chambers. Yolonda Fountain Henderson, 50, was elected last spring as the city’s first black mayor.
On the screen was a list of every debt collection lawsuit against a resident of her city, at least 4,500 in just five years. Henderson asked to see her own street. On her block of 16 modest ranch-style homes, lawsuits had been filed against the occupants of eight. “That’s my neighbor across the street,” she said, pointing to one line on the screen.
And then she saw her own suit. Henderson, a single mother, fell behind on her sewer bill after losing her job a few years ago, and the utility successfully sued her. That judgment was listed, as well as how one day the company seized $382 from her credit union account — all she had, but not enough to pay off the debt.
As the lines of suits scrolled by on the screen, Henderson shook her head in disbelief, swinging her dangling, heart-shaped earrings.
“They’re just suing all of us,” she said.
That’s not only true in Jennings. The story is the same down the road in Normandy and in every other black community nearby. In fact, when ProPublica attempted to measure, for the first time, the prevalence of judgments stemming from these suits, a clear pattern emerged: they were massed in black neighborhoods.
The disparity was not merely because black families earn less than white families. Our analysis of five years of court judgments from three metropolitan areas — St. Louis, Chicago and Newark — showed that even accounting for income, the rate of judgments was twice as high in mostly black neighborhoods as it was in mostly white ones.
These findings could suggest racial bias by lenders or collectors. But we found that there is another explanation: That generations of discrimination have left black families with grossly fewer resources to draw on when they come under financial pressure.
“I can’t tell you the number of times I have a 55- to 65-year-old African-American woman who can’t make her mortgage payment because she’s helped other members of the family to the detriment of keeping herself afloat.”
— Linda Ingram
Manager of the foreclosure intervention department
Beyond Housing, a nonprofit organization in St. Louis
Over the past year, ProPublica has investigated a little-known but pervasive shift in the way debt is collected in America: Companies now routinely use the courts to pursue millions of people over even small consumer debts. With the power granted by a court judgment, collectors can seize a chunk of a debtor’s pay. The highest rates of garnishment are among workers who earn between $25,000 and $40,000, but the numbers are nearly as high for those who earn even less.
Despite their prevalence, these suits remain remarkably hidden, even to people in the communities most burdened by them.
In the city of St. Louis and surrounding St. Louis County, where Jennings lies, only about a quarter of the population lives in neighborhoods where most residents are black. But over half of court judgments were concentrated in these neighborhoods.
Armed with these judgments, plaintiffs — typically debt buyers, banks, hospitals, utilities, and auto and high-cost lenders — have seized at least $34 million from residents of St. Louis’ mostly black neighborhoods through suits filed between 2008 and 2012, ProPublica’s analysis found.
April Kuehnhoff, an attorney at the National Consumer Law Center, said that the analysis raised “crucial questions about how racial disparities are entering the debt collection system and what we can do to eliminate these disparities.” The findings, she said, should spur lawmakers to reform overly punitive federal and state collections laws.
Collection suits — typically over smaller amounts like credit card debt — fly across the desks of local judges, sometimes hundreds in a single day. Defendants usually don’t make it to court, and when they do, rarely have an attorney.
For those who do show up, the outcome isn’t all that different. In Missouri, most judgments resulted in the plaintiff attempting garnishment, whether the defendant appeared in court or not, according to ProPublica’s analysis.
In Jennings, which since the 1960s has shifted from almost entirely white to 90 percent black, the suits are unrelentingly common. Between 2008 and 2012, there was more than one lawsuit for every four residents. And yet, this fact astounded residents when they heard it, because it is a facet of life that most keep private. Parents hide it from their children, and neighbors never think to discuss it.
The typical household income in Jennings is about $28,000, an income level at which families spend, on average, all of their income on basic necessities, federal survey data shows. Each paycheck must be carefully apportioned with the most vital costs — mortgage or rent, food and utilities — prioritized.
A garnishment hits this kind of household budget like a bomb. Federal law and most state laws protect only the poorest of the poor from having their wages seized, otherwise allowing plaintiffs to seize up to a quarter of a worker’s after-tax pay. If that paycheck is deposited in a bank, that and other money in the account can be seized to pay down the debt. When garnishment protections do exist, the burden is usually on debtors to figure out if and how the laws protect their assets.
In Jennings, the struggles with debt compound other hardships common to black communities in St. Louis and elsewhere: conflicts and tension with police, and a municipal court system that has jailed residents over unpaid traffic tickets. To Jennings’ northwest lies the city of Ferguson, where the killing of teenager Michael Brown by a police officer last year sparked protests and rioting.
The Rev. Starsky Wilson is co-chair of the Ferguson Commission, a panel created by Missouri’s governor to study the underlying social and economic conditions behind the unrest. Lack of economic mobility is a key issue, he said, and there are two sides of the coin. Improvements in education, job training and wages can push people up the ladder. But equally important, he said, are the forces that drag them down.
“If you’re still stuck in this web of indebtedness, you’re not going to be economically mobile,” he said.
Experts cite many reasons why blacks might face more lawsuits, foremost among them the immense gap in wealth between blacks and whites in the U.S. It’s a gap that extends back to the institution of slavery and, more recently, to 20th century policies that promoted white homeownership while restricting it for blacks.
Today, the typical black household has a net worth of $11,000, while that of a typical white household is $141,900. As a result, while the budget is often tight for any low- or middle-income household, black households are less likely to have resources to draw on when they need it.
In Jennings, that is a reality felt even in City Hall, where, along with the mayor, five of the eight sitting city council members (seven of whom are black) have been sued over a debt — although none of them knew about their shared plight until ProPublica shared its data.
“I’m in a generational hole,” said Miranda Jones, 41, a Jennings city council member and executive with Better Family Life, a St. Louis-based nonprofit devoted to supporting black families. She and her husband have been sued three times in recent years over debts, once resulting in the seizure of $800 from her bank account.
“Coming from East St. Louis from a poor family, I started off in debt,” she said. She managed to transcend those circumstances to attain a college degree, but that accomplishment came with a load of student loan debt.
“I’m trying to break the cycle for my kids, and it’s very difficult,” she said.