Identify and explain ways that financial institutions discriminate against and exploit the poor

What will be an ideal response?


Suggested Response:
• Redlining refers to banks and other lenders identifying a deteriorating portion of a city, and then refusing to lend money for mortgages or business loans in that area.
• Another way financial agencies may discriminate against the poor is by insisting on a minimum balance of $150 or $200 for checking accounts, making it impossible for workers living from paycheck to paycheck to maintain checking accounts. Because they may not have a bank account they are forced to go to check cashing stores that may charge up to 10% of the check to cash it.
• There are fewer banks, thrifts and credit unions in low-income areas, which restricts the money made available for businesses and homeowners.
• Unable to receive standard bank loans, the poor turn to payday lenders who charge up to a 400 percent annual interest rate.
• Stores exploit their customers by having blank price tags. Customers have to ask the prices and this allows the merchants to quote higher prices.
• Stores may also pull a bait and switch by luring in customers with advertised low prices and then convincing them to by higher priced items.
• Rent-to-own businesses convince customers to pay each week to rent an item until it is paid for and then charge high interest rates and repossessing the item if a payment is missed. Pawnshops are an expensive option because the person must surrender a possession as collateral for a loan.
• Pawnshops have proliferated in recent years, with interest rates up to 20% a month—240% a year.

Education

You might also like to view...

If meals are planned so that they are served to small groups of children and the food is ready as the children are seated, intimacy will be increased and friction held to a minimum

Indicate whether the statement is true or false

Education

According to research on teacher self-efficacy, compared to teachers with low self-efficacy, teachers with high self-efficacy

a. Are more likely to use positive classroom management strategies b. Are more likely to try innovative approaches and search out new strategies for classroom predicaments c. Are more likely to use approaches that promote a learning orientation d. All of the above

Education

According to the United Nations Convention on the Rights of the Child, what do children have the right to?

a. clean water and food b. education c. rights to education, rights in education, and rights through education d. free speech

Education

A case history is typically an important component of a speech and language evaluation

Indicate whether the statement is true or false

Education