Originally published on ProPublica
ON A RECENT SATURDAY AFTERNOON, the mayor of Jennings, a St. Louis suburb of about 15,000, settled in before a computer in the empty city council chambers. Yolonda Fountain Henderson, 50, was elected last spring as the city’s first black mayor.
On the screen was a list of every debt collection lawsuit against a resident of her city, at least 4,500 in just five years. Henderson asked to see her own street. On her block of 16 modest ranch-style homes, lawsuits had been filed against the occupants of eight. “That’s my neighbor across the street,” she said, pointing to one line on the screen.
And then she saw her own suit. Henderson, a single mother, fell behind on her sewer bill after losing her job a few years ago, and the utility successfully sued her. That judgment was listed, as well as how one day the company seized $382 from her credit union account — all she had, but not enough to pay off the debt.
via The Color of Debt: How Collection Suits Squeeze Black Neighborhoods – ProPublica.
Written by Charles Eisenstein for YES! Magazine.
Today a burgeoning debt resistance movement draws from the realization that many of these debts are not fair. Most obviously unfair are loans involving illegal or deceptive practices—the kind that were rampant in the lead-up to the 2008 financial crisis. From sneaky balloon interest hikes on mortgages, to loans deliberately made to unqualified borrowers, to incomprehensible financial products peddled to local governments that were kept ignorant about their risks, these practices resulted in billions of dollars of extra costs for citizens and public institutions alike.
A movement is arising to challenge these debts. In Europe, the International Citizen debt Audit Network (ICAN) promotes “citizen debt audits,” in which activists examine the books of municipalities and other public institutions to determine which debts were incurred through fraudulent, unjust, or illegal means. They then try to persuade the government or institution to contest or renegotiate those debts. In 2012, towns in France declared they would refuse to pay part of their debt obligations to the bailed-out bank Dexia, claiming its deceptive practices resulted in interest rate jumps to as high as 13 percent. Meanwhile, in the United States, the city of Baltimore filed a class-action lawsuit to recover losses incurred through the Libor rate-fixing scandal, losses that could amount to billions of dollars.
Read more -> “Don’t Owe. Won’t Pay.” Everything You’ve Been Told About Debt Is Wrong by Charles Eisenstein — YES! Magazine.
Two of the country’s largest banks are finally getting around to removing the debt consumers eliminated during bankruptcy proceedings from their credit reports, a move that puts Bank of America and JPMorgan Chase in line with federal law.