The Roots of Credit Inequality

Debt oppression began before the United States became a country. Settlers enslaved Africans and Indigenous people, treating them as property that they could buy and sell for their economic and personal benefit. When enslavement became illegal, new economic systems and laws that included sharecropping, Black Codes, and Jim Crow kept Black people in servitude. Laws that prohibited enslaved people from owning property or selling goods to white people evolved into restrictions on Black people’s occupations and market participation, both formal and informal.

When Black entrepreneurs overcame these obstacles and built wealth within Black business enclaves, white people enforced their racist norms through violence. Segregated access to credit and different credit terms and conditions in retail, housing, and government loans played a large part in maintaining racial wealth gaps throughout the twentieth century. This system is a vestige of slavery that violates the Thirteenth Amendment. And the laws and policies that uphold a segregated credit system that harms Black, Indigenous, and Latine consumers violate the Fourteenth Amendment’s Equal Protection clause.

These constitutional violations require strong remedies that include an amnesty on past debts, rehabilitative reparations, and a reimagining and restructuring of our credit system. This article documents the early roots of the United States’ use of debt as a tool of oppression and is the first in a three-part series