In the 50 years since the civil rights movement and Dr. King's dream, one problem (racism) has been replaced or at least matched by another -- poverty. Urban poverty, rural poverty, and poverty that hits blacks, whites, browns and others alike. As I have said previously in the Huffington Post, poverty is the new racism. If you are poor, everything pretty much sucks.
The old model of racism was based on race and the color line. The new model of racism is rooted in class and poverty. The old racism was obvious in signs that read White Only, from the southern states in the U.S. to South Africa. The new racism is more obvious in Misery Row.
Whether it is a feature on a boulevard in an urban city or a rural town, or whether it is at the entrance of a military base, the Misery Row looks pretty much the same. Predatory check cashers, next to rent to own stores, payday lending stores, title lending stores, and liquor stores.
One group of financial predators takes advantage of your financial problems and misfortune, while another associated group benefits by helping you to forget you actually have any.
But there is something we can do to change the landscape of urban blight in our urban and rural underserved communities. That something is (increasing) credit scores.
Consumer protection is vitally important to a nation, and I wholly support my friend Richard Cordray and the work being done by the Consumer Financial Protection Bureau. That said, when we are making the most critical decisions of our lives, such as when we choose to take out a 30-year mortgage for our family, there will be no mortgage police at the kitchen table with us.
Or when we show up with great enthusiasm to the used car auto dealership, only to be greater with an enthusiastic approval of a loan carrying an 18% effective interest rate. There is no auto loan police standing by when we make this decision either.
And so, while consumer protection is critically important, I have found that effective consumer protection must be matched with a full partner called consumer empowerment for all. Something beyond mere financial literacy, and with an end-game that sounds and feels more like financial dignity. At Operation HOPE we call this the 'silver rights' movement, or making free enterprise and capitalism work for all of God's children.
In underserved neighborhoods and communities Misery Row must be met with equal parts consumer protection and consumer empowerment or change will never come. In fact, if we do one (protection) without the other (empowerment), it is not inconceivable that in time these communities are met with a choice actually worse than highly visible yet predatory commercial lenders -- and that is no lenders at all.
With consumer empowerment everyone wins. With our HOPE 700 Credit Score Communities initiative we have found that we can and consistently do help our clients to raise their credit scores by more than 100 points. And when a counseling client moves their credit score from 550 (on average) to 670 or more, everything in that person's life changes. Their financial IQ changes. Their financial literacy changes. Their sense of well-being, and hope, goes through the roof. Their "engagement" in their own lives rises to a new level, matching their new financial skill set.
And this is why I keep saying that financial literacy is the new civil rights issue for this generation. Because when you inject the power of financial literacy in the life and mind space of an individual, everything changes. Nothing about that person will ever be the same again. When you know better, you tend to do better.
Now imagine doing this same thing not just with an individual, but an entire community. Let's start with the four-square block area surrounding say the poor neighborhood that you may have grown up in. With this type of empowering intervention, when you help raise credit scores for individuals and families in a community, in time and over time the community and culture of that community changes too. Over say 3-5 years, the liquor stores become convenient stores and even grocery stores, and the range of predatory financial lenders become credit unions and banks -- all through the power of market forces and the market economy. When people know better, they tend to do better.
This is my vision for urban and rural America. To use the new Operation HOPE "software of human development" to lift credit scores and with it, human potential. To inspire a generation of stakeholders in a community, as "no one washes a rental car." The nicest people in the world do not wash rental cars. They simply take them back to their owners. We need to create a generation of individuals in these communities who see themselves as change agents and stakeholders. The bonus of this dream made real is not only the removal of blight and predatory practices, but the creation of voters (stakeholders) and a tax base.
We are beginning in and around the HOPE Financial Dignity Center at Ebenezer Baptist Church in Atlanta, Georgia, the moral home of Dr. Martin Luther King, Jr., where Dr. King and Daddy King co-pastored the church during the movement. What few know is that while the son Dr. King was leading a social movement in the streets, Daddy King served on the board of a bank for 40 years and was growing the roots of a financial and economic empowerment movement in the suites. What we need now is not one (social) or the other (financial and economic), but measures of both.
What would happen if you started a movement for 700 Credit Scores in your community?
Okay, let's go.
Note: It is acknowledged that not all firms engaged in the non-traditional financial industry groups noted herein are in fact predatory in nature. A generalization made to underscore an irrefutable point.
John Hope Bryant is an empowerment leader, the founder, chairman and CEO of Operation HOPE and Bryant Group Companies, Inc. Magazine/CEO READ bestselling business author of LOVE LEADERSHIP: The New Way to Lead in a Fear-Based World (Jossey-Bass), the only African-American bestselling business author in America, and is chairman of the Subcommittee for the Under-Served and Community Empowerment for the U.S. President's Advisory Council on Financial Capability, for President Barack Obama. Mr. Bryant is the co-founder of the Gallup-HOPE Index, the only national research poll on youth financial dignity and youth economic energy in the U.S.