In this episode of the Raci$m Is Profitable podcast, Solana Rice and Jeremie Greer join ACRE’s Maurice BP-Weeks to examine the oppressive narratives that limit people of color’s economic power. America loves to promote ideals like self-determination and choice, yet people of color literally and figuratively can't afford to risk much. And to participate in the economy in ways that build generational wealth, many have to rely on an inherently racist credit system that sees — and treats — them as risky. The money myths that shape who deserves to be made whole help cement a dual financial system that prices people of color out of prosperity.
This transcript has been edited and condensed. You can listen to the full episode here.
Solana Rice: Mo, when did you first learn about credit?
Maurice BP-Weeks: My dad actually worked at a community bank when I was growing up — a tiny little bank in North New Jersey. And he would always talk about how Black churches had trouble going into big banks and getting loans because these big banks wouldn't give them any credit. So they needed small Black banks to do that instead. And that's how he would describe what he did. So that was my introduction to credit; I sort of thought of it as this noble thing that people were offering. Yeah, little did I know that my dad was very much an outlier in the credit market.
Jeremie Greer: How do you and the folks that ACRE think about the idea of trustworthiness and how that relates to Black folks when we're looking for credit?
BP-Weeks: So the entire concept of credit trust is a racist concept built on denying non-white people loans. Before there were credit scores, this is how you would get a loan: you would go into a bank, people would say, like, "Oh, you make sure you dress up really nice, make sure they see you pulling up in a nice car. Put your Sunday suit on, slick your hair back, talk about all the stuff that you have, etc.” Because it was this relational thing built on — does this specific banker believe that you will pay them back? And these specific bankers were as racist, as systemically racist as the rest of society was at the time. So that meant that if you were a Black business, if you were a Black individual, and you needed a loan, you had a huge uphill climb to convince the lender that you're trustworthy. And when credit scores became super prevalent – which people don't realize, that's very recent history — they were pitched as this way to take out some of the bias in the system. We'll just calculate a score. And you know, this score will be race-blind, and it'll be gender-blind; this will just be the score that you get based on things that you have, you know, taken out in the past or financial situation, etc, etc. As we have come to learn, of course, when you create algorithms with racist data, you get racist outcomes no matter what.
Greer: I thought you were taking me down to this happy place, Mo. Damn!
BP-Weeks: Unfortunately, every turn leads to somewhere a little bit darker when you're talking about credit. So yeah, the average Black credit score sits probably 60 points, 70 points, 100 points lower than the average white score. And that's because these same notions of what makes a person trustworthy to lend to exist through the algorithmic model. So when you preference things like homeownership or property ownership or fully outright owning your car — you know, things things that historically have been denied to Black people, then you come up with a system that screws Black people over in the end.
Rice: How does this lack of credit show up for not only individuals but whole neighborhoods?
BP-Weeks: People who've applied for a phone contract or some utilities or auto insurance know that, when you have a low credit score, you have to pay more to get those basic needs. Everyone needs insurance to drive; it's the law. Everyone needs heat and electricity; everyone needs a phone to communicate — and you have to pay more. So multiply that over literally a generation, you know, and you can see the amount of wealth that's needlessly stripped from communities of color. It's insult to injury to be extracting wealth through auto insurance, through higher rates for utilities and phones. But that's what our credit system is designed to do. That on top of the inability for there to be new economic societies built in these communities because it's really difficult for Black folks to get small business loans. You just start to see how this particular piece of the economy really holds back millions and millions of people of color and Black people specifically.
Greer: How is the credit score created? Who is using that?
BP-Weeks: Maybe you got an email years ago, that was like, you know, from this company, Experian, which had a huge data breach, saying, "Oh, sorry, that we lost your data. If you want, you can pay us this amount of money, and we'll make sure that it gets sewn up." And I never gave authority to Experian to have my data.
Greer: Right, I'm sure most people were like, "Who the fuck is Experian and why are they reaching out? Who the hell are these people?"
BP-Weeks: Like, "What? How did you have my data?" Yeah.
So there are three major credit reporting bureaus that basically create these proprietary scores that are built off of things like how frequently you repay loans that you've already taken out, the total amount of credit that you have, the types of credit that you have. And they take all of this data, and they put it into a proprietary calculation. So that means that, you know, if you check your scores from three agencies, you might get three different scores, and they don't have to tell you how they calculated it.
Greer: Right, that's what proprietary means. Like, "I don't have to tell you how I did this."
BP-Weeks: Right. Right. They don't have to tell you, they don't have to tell the government, they don't have to tell anyone. It is considered proprietary and this is an area of the economy where there's not as much regulation as there should be. So these companies can kind of go hog wild, you know, they can get away with leaking all of your data and then having you pay to get it back.
Greer: Right, they sell you data protection, anti-hack, cyber privacy stuff, too.
BP-Weeks: It's unbelievable! It's unbelievable. Like, why would I buy this from you? You lost all of my data. The way that this interaction started was you telling me you lost everything. Why would I buy protection from you? It sounds like a mob scheme, you know? It's really sick. And as technology advances, these companies also have been investing in ways to make their algorithms even more complicated. So now they'll say, okay, we recognize there's some poor racial outcomes with how we've been calculating credit scores, but not to worry, everyone, we have instituted machine learning, and even more complicated algorithms. And we promise this time it's going to be great. The computer is going to figure out, once and for all, how good you are at repaying your loans. But, of course, the data that they're feeding into the machine learning system is the same data that they’ve used, which is entirely racist.
Rice: How does this affect our political power?
BP-Weeks: Political spending is something that's supposed to be entirely transparent, right? Like, there's supposed to be reports that let you know how much these companies are wielding their power. The reality is that there's so many different, dark money avenues for them to do so that we will never know the full scope of how these folks are flexing their political power.
And then legislators are really afraid of pushing on the wrong things in our economy that will accidentally send us into a huge downturn. So that's the reason why people are afraid to regulate banks. And the same is true for these big credit companies and debt collection companies. There's a credit score for every single person who is of age so, you know, messing with that system, electeds start to think, "Well, I don't want to screw anything up." And the hive mind around that really blocks a lot of regulation from happening. These are some of the most powerful industry actors in the world that we're up against when we're talking about fixing how credit and debt work in this country.
Greer: There was an effort right after Obama came into office, with the passage of the Dodd Frank Act, which created the Consumer Financial Protection Bureau. And there was an effort to try to rein in some of this and make sure banks are lending to Black and brown communities. I wonder if you could talk a bit about, like, what is the opportunity here to flip the script on this, so that the government is actually reining in some of the bad power dynamics you just talked about?
BP-Weeks: I like to joke that the CFPB is the only government agency that I like. It’s the peak of the type of power that I actually have trust in the government of being able to do well, when it functions. And it was the brainchild of the Obama administration and Senator Warren. And not only was it this sort of backwater agency under Trump, but there were many on the Republican side that tried to use Trump's being in office to destroy it. The new director, Rohit Chopra, is a long-term fighter and really does want to flex some of this power and fight for consumers. And the CFPB, as an agency, has a lot of runway to really do that. And, there has to be some movement on the ground that actually pushes this agency in the direction of doing that great work. You know, nothing in DC just happens because you have good, altruistic people there. That's just not how the American government works. It would be great if it did, and it's not that, so you know, we need to be able to build this racial justice movement around restructuring our credit and debt system in the country.
Greer: It’s an agency that has a direct responsibility to interact with people. Like, if you feel like you've been screwed over, you can contact them directly, right?
BP-Weeks: That's right. And it has the benefit of being able to levy these fines and then redistribute them to the American public. So, you know, there's a lot of times, people are like, "Well, what the hell does this government agency actually do?” With this one, you know, the CFPB will have on their website, like, we have won back x billion of dollars from these corporations, and we gave it to the people that they screwed over. Like, it's really direct, and I love that about it. The issue is, the list of corporations screwing over the American public is longer than a CVS receipt. So we have a lot work to do. And, you know, there's good funding at the CFPB, but there needs to be a lot more in order for us to really change things around.
Rice: So you mentioned that nothing happens in DC on its own. What are some of the things that are happening on the ground?
BP-Weeks: I think we're seeing a real expansion of extractive practices using the veneer of artificial intelligence and machine learning and algorithms to wash over their extraction and targeting of Black people in particular. This industry is really, really bad in that regard. And then I also look at policing — the two things really go hand in hand. But policing, as you know, is another area that’s invested a lot of money into technologies and artificial intelligence being able to determine "where crime is supposed to happen" and "find people who've committed crimes more quickly” — all these things that that really are designed to keep our political and economic system tilted against Black folks. So ACRE'S been doing a lot of work on tracking tech's rise in that way and looking at corporations like Amazon and how they've invested into it.
