I became aware of all the issues surrounding the unbanked, predatory lending practices, check cashing companies, and abusive credit card fees when I spent 5 weeks in Omaha right after Hurricane Katrina. A very old friend of mine–a math teacher at the community college I once taught at for a few years when my eldest was a toddler–took me to a seminar filled with social workers who were complaining how many of their clientele were being gamed by fraudulent lending practices. I returned to New Orleans to spend a lot of time researching things and predicted it was one big house of cards that would bring down the economy eventually. The research was interesting but turned out to not be ‘glamorous’ enough for publication. The other thing was I was told was that my assertions that these practices would bring down the economy was over the top because, well you know, financial innovation is such a handy dandy thing and these sweethearts were just offering up much needed services to under-served consumers. Yeah, right.There's lots of great graphs and discussion, including a list of which banks are the largest credit card issuers, and how many billions the took in from the financial "bailout."
So, this study from the Center for Responsible Lending showed up in my email this morning. I admit to having spent a huge amount of time looking at their studies about 4 years ago, but was told to quit the line of research by my peers. I switched to something more marketable.