Asset Building vs. Financial Justice

Mark Winston Griffith

Asset Building vs. Financial Justice

This past week the Federal Reserve Banks of Boston, New York and Philadelphia, in cooperation with the Corporation for Economic Development, held a conference in New York that is part of a series of regional forums on "asset-building policy products and programs".

For the uninitiated, there is a flourishing asset-builders movement made up of people and organizations from all over the country who are working on helping low-income people build wealth through savings and investments, home ownership, micro-enterprise and education. The movement is predicated on the well established argument that it is a deficit in assets, even more so than income, that keeps people locked in poverty over generations.

Similarly, a couple of months ago, there was an equally high powered gathering of community reinvestment and consumer justice advocates that was convened by the Ford Foundation. The folks in this room work on forcing corporate America and government regulators to establish policies and practices that promote affordable financial services for low-income consumers and that don't strip wealth from low-income neighborhoods.

The backdrop behind both gatherings is a financial services industry that is changing at light speed and falling over itself to get in on the profits that are being made among the "unbanked", the new euphemism for poor people living without functional relationships with banks.

Except for a few overlapping people at these gatherings, these two camps have inherent mistrust of each other. Where the asset-builders see opportunity in this brave new financial world, community reinvestment/consumer financial justice people see peril and exploitation. Where the asset-builders talk more about stimulating economic development, the reinvestment and justice crowd focuses more on protecting people who are in the bulls-eye of unhinged capitalism.

Interestingly, despite the different ways in which they engage the world, both are on the right track. And both sides need to talk to each other more. There has to be a way of extolling the virtues of homeownership and entrepreneurism without slipping into simplistic, up-by-your bootstraps, cliches. There has to be a way of talking about individuals lifting themselves out of poverty that carries an aggressive critique of an economic system which sucks the life blood out of low-income communities.