Overview

The United States has two separate banking systems today one serving the well-to-do and another exploiting everyone else." How the Other Half Banks "contributes to the growing conversation on American inequality by highlighting one of its prime causes: unequal credit. Mehrsa Baradaran examines how a significant portion of the population, deserted by banks, is forced to wander through a Wild West of payday lenders and check-cashing services to cover emergency expenses and pay for necessities all thanks to deregulation that began in the 1970's and continues decades later.

In an age of corporate megabanks with trillions of dollars in assets, it is easy to forget that America s banking system was originally created as a public service. Banks have always relied on credit from the federal government, provided on favorable terms so that they could issue low-interest loans. But as banks grew in size and political influence, they shed their social contract with the American people, demanding to be treated as a private industry free from any public-serving responsibility. They abandoned less profitable, low-income customers in favor of wealthier clients and high-yield investments. Fringe lenders stepped in to fill the void. This two-tier banking system has become even more unequal since the 2008 financial crisis.

Baradaran proposes a solution: reenlisting the U.S. Post Office in its historic function of providing bank services. The post office played an important but largely forgotten role in the creation of American democracy, and it could be deployed again to level the field of financial opportunity."

Editorial Reviews
  • A fascinating in-depth view of why and how so many Americans struggle to find affordable banking services. Modern finance provides great opportunity but also many risks, through hidden fees or even outright deception. The crisis of 2008 was not an aberration and we have not fixed the deep-seated underlying problems. A must read for anyone who aspires to build financial security for themselves, for their family, and for the nation.--Simon Johnson, coauthor of White House Burning and 13 Bankers.
  • Do banks have a public responsibility to serve the poor? This captivating book argues that they do. A fresh and provocative perspective on the very old problem of the poor and debt.--Patricia A. McCoy, coauthor of The Subprime Virus
  • Baradaran argues persuasively that the banking industry, fattened on public subsidies (including too-big-to-fail bailouts), owes low-income families a better deal "How the Other Half Banks" is well researched and clearly written The bankers who fully understand the system are heavily invested in it. Books like this are written for the rest of us.--Nancy Folbre, New York Times Book Review(10/06/2015).
  • Mehrsa Baradaran s terrific book, "How the Other Half Banks," argues that we could and should ask banks to serve the poor and working class once again. In particular, post office banks (with storefronts and websites both) could provide those missing banking services: a place to park cash, earn interest and take out small amount loans The idea is not hers originally, but she seizes and expands on the idea brilliantly and at great length. In particular, she advances the case for postal banking by reviewing the country s earlier experience with postal banks, and by linking that experience to the modern problem of missing services for the poor and working class One can appreciate why the policy world has come to Baradaran for her expertise, and this book will constitute a central contribution to the debate I will recommend this book to all who are interested in structural racism Baradaran demonstrates how the the post-deregulation restructuring of banking has disproportionately impacted communities of color, and how postal banking and other public options might bring them back into the fold once more. Baradaran s revival of postal banking, and her description of the disappearance of services in the wake of deregulation, is fresh and engaging, and I highly recommend [the] book for all who are interested in the structure of inequality.--Daria Roithmayr"JOTWELL (10/02/2015)
About the Author

Mehrsa Baradaran describes the two separate banking systems--one serving the well-to-do and another exploiting everyone else--at work in the United States, how banks have abandoned their social contract with the American people, and proposes solutions to the current crisis. Mehrsa Baradaran is Associate Professor at the University of Georgia School of Law.

Product Details

Author:  Mehrsa Baradaran
ISBN:  0674286065   
Publisher:  Harvard University Press
Publish Date:  October 06, 2015
Pages:  336 pages
Dimensions:  1.1" H x 9.5" L x 6.3" W (1.3 lbs) 

How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy


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