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You May Not Be Surprised….



….that a ProPublica investigation found massive racial disparities in debt collection lawsuits.

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.

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.

Why, it’s almost like structural racism exists and that we should take those issues seriously and create policy, like public housing, affirmative action, schooling, etc., that seek to break down those legacies. Of course, all those policies I just mentioned have either been eliminated or significantly repealed by the courts or for that matter by upper class white people sending their children to private schools or moving to the suburbs for the schools. There’s something of a solution to the debt problem, which is significantly reforming the laws allowing for punitive debt collection, but the real story here is the long-term structures that leave African-Americans without the ability to fight against debt collectors or even realize what rights they have, problems whites face at significantly lower rates. More on the structural side of this:

The Metropolitan St. Louis Sewer District provides service to almost all of the city of St. Louis and the surrounding county. The bill is not usually a large one — the average monthly rate in 2012 was about $29 for a single family home — but MSD, unlike other utilities like electricity, lacks the power to shut off service to customers who fall far behind.

In 2010, MSD decided too many customers weren’t paying their bills, so it dramatically increased its collection efforts. It went from filing about 3,000 suits in 2010 to filing about 11,000 in 2012, more than any other company that year.

Most of MSD’s customers are white, but the suits were largely filed against residents of black communities like Jennings. ProPublica examined MSD’s court judgments against residents of lower- and middle-income neighborhoods and found that MSD obtained judgments in the mostly black neighborhoods at a rate about four times higher than in the mostly white ones.

When MSD sues, the debts can be quite small, even as little as $350. And the size of those debts may help explain why MSD files so many more suits in black neighborhoods.

ProPublica’s analysis of court data for Newark and Chicago found that the debts that led to suits in mostly black neighborhoods were, on average, about 20 to 25 percent smaller than the debts of residents of mostly white ones.

In the Newark area, for instance, when a company sued a resident of a middle-income white neighborhood, the average balance was $3,466; in a black neighborhood, the average was $2,628.

This suggests white consumers are, in general, better able to resolve smaller debts.

This is sort of thing that both reflects difference created over generations and creates difference that will last for generations.

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