GUEST: James Trimarco, senior editor at YES! Magazine, author of the special report, “Banking On Justice”
BACKGROUND: Poverty-stricken Americans are often stuck in vicious cycles borrowing money from predatory lenders off their paychecks and then getting caught in paying off exorbitant interest rates.
That’s not because they’re being irresponsible. It’s because most banks are less likely to approve small loans for poor people needing to make ends meet, looking to buy a house, or start a small business.
Now, in one of the poorest parts of the country, the Mississippi Delta, a model of community banking by traditional banks, credit unions, and non-profit organizations, has helped a growing number of poor Mississippians break out of that vicious cycle.
The institutions receive incentives from a government program called the Community Development Financial Institutions Fund. The stories of how these CDFI banks have worked with community members to significantly help improve lives is the subject of a heartening new special report in the latest issue of Yes! Magazine called Banking on Justice.