Casey Launches Initiative in the South to Reduce Debt for Families of Color

Posted November 15, 2017
By the Annie E. Casey Foundation
Blog caseylaunchesinitiativeinthesouth 2017

The Annie E. Casey Foun­da­tion, via the South­ern Part­ner­ship to Reduce Debt, has award­ed $580,000 in grants to sev­en part­ner­ships work­ing to reduce house­hold debt in com­mu­ni­ties of col­or through­out the South.

Awardees include:

Over the next 12 months, the awardees will part­ner with pri­vate and pub­lic enti­ties to explore three types of debt and devel­op strate­gies that aim to lessen the impact of this debt on com­mu­ni­ties of col­or. The three types of debt that the groups will be focus­ing on are: med­ical bills and hos­pi­tal fees; high-cost con­sumer prod­ucts and ser­vices such as pay­day loans and rent-to-own agree­ments; and crim­i­nal and civ­il judi­cial fines and fees.

We want these ser­vices to reach the folks who are impact­ed the most — and for us, that meant look­ing for orga­ni­za­tions of col­or and oth­er groups that have deep roots in the com­mu­ni­ty,” Don Bay­lor Jr., a senior asso­ciate at the Foundation.

When com­pared to white fam­i­lies, African-Amer­i­can and Lati­no fam­i­lies are far more like­ly to encounter preda­to­ry lend­ing prac­tices, face dif­fi­cul­ties repay­ing loans and have zero, or neg­a­tive, net worth, accord­ing to research. Stag­ger­ing racial dis­par­i­ties in America’s crim­i­nal jus­tice sys­tem mean that peo­ple of col­or are also more like­ly to face court-man­dat­ed fines, which munic­i­pal­i­ties increas­ing­ly use to gen­er­ate rev­enue. This polic­ing for prof­it” mod­el often traps low-income peo­ple of col­or in a hard-to-escape cycle of debt.

This sce­nario is par­tic­u­lar­ly true — and par­tic­u­lar­ly harsh — in the South.

A com­bi­na­tion of fac­tors — includ­ing high­er-than-aver­age rates of pover­ty, house­hold debt and income inequal­i­ty as well as per­sis­tent racial seg­re­ga­tion and poor­er edu­ca­tion­al out­comes — make the region the worst in the nation when it comes to eco­nom­ic mobil­i­ty. Such hur­dles can pre­vent fam­i­lies of col­or in the South from work­ing toward and achiev­ing finan­cial sta­bil­i­ty.

As part of the Foundation’s ini­tia­tive, awardees will par­tic­i­pate in a peer learn­ing exchange to share lessons and best prac­tices over the next year. They will also receive tech­ni­cal assis­tance on research, pol­i­cy and legal analy­sis, and coali­tion build­ing from Casey’s nation­al part­ners in the finan­cial ser­vices field.

These sev­en part­ner­ships have an impres­sive mix of lead­ers at the table, all of whom under­stand the bur­den of debt and oth­er issues sur­round­ing the racial-eth­nic wealth gap,” says Bay­lor. We are excit­ed to sup­port the strong work that these part­ners are already doing on the ground, and we look for­ward to see­ing what they’re able to accom­plish in the year ahead.”

Learn more about the racial wealth gap

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