Suing the Bankers

Related to the foreclosures issue (and, of course, The Wire) it seems that Baltimore is suing Wells Fargo Bank "contending that its lending practices discriminated against black borrowers and led to a wave of foreclosures that has reduced city tax revenues and increased its costs." It's possible, of course, that this is a good idea but one needs to be very careful in this territory. The last thing a struggling city like Baltimore needs to do is create a situation where banks just figure they'd rather not lend anything to anyone in the city for fear of lawsuits if things don't work out.

It's by no means a policy book, but one thing that comes through loud and clear in Sudhir Venkatesh's Off The Books is that inability to secure formal, legal credit from proper banks is a big obstacle for inner-city underground entrepreneurs who'd like to take their successes above-board. Meanwhile, however bad the terms a real bank may offer a person in a sketchy neighborhood, you're way better off with the bank than with the loan shark or the checks cashed guy or the payday loan emporium.