In the wake of our most recent economic calamity, there is renewed focus on the social responsibilities of the businessperson. That is, to what extent should the profit motive be governed or, more aptly, curbed by one’s sense of the social and real-life impact of one’s profit-driven actions. In today’s New York Times is a report of yet another lawsuit filed by a major city (Memphis, TN) against the bank (the other one being Baltimore; story here), Wells Fargo, which, like other cases before it, accuses the bank of engaging in discriminatory lending practices aimed primarily at blacks and Latinos. Lawyers for the cities claim that such practices have essentially devastated entire minority-centric neighborhoods as unpaid mortgages have given way to foreclosures and ultimately to abandoned homes. This premise, according to the Times report, has already been rejected by the judge presiding over the Baltimore case.
Whether the judge is correct on that score is perhaps an open question; there may be sense of indignation among those who feel that borrowers of high-interest loans should have known better. Simply stated: don’t buy it if you can’t afford it. At the end though the pressure to buy and borrow could not have been entirely generated by the banks, not matter how discriminatory their actions were. Rather, it is the belief, woven into this country’s collective psyche since time immemorial, that home ownership is one if not the key to social mobility. Coupled with the reckless lending practices of the past few years and the historically depressed state of most minority-based communities, it is easier to grasp, by which, I mean, understand, what has now befallen the cities-turned-litigants.