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The Hilltop View: From sharecropping to predatory lending, banks in the Black community

July 18, 2012

by Muhammad al-Kareem

If businesses are going to survive along the Third Street corridor and other Black business districts, major policy changes must be made by the government to fit the situation and climate in this community and other communities across America. The people must be enabled to go into business or expand their businesses so as to employ our youth and unemployed. Truly opening up economic opportunity could resolve previous injustices – with justice.

In the 1960s, many Black families had difficulty securing bank loans. Banks were openly discriminating against Black business men and women. But in spite of the all the odds stacked against them, Black business owners persevered and some became successful.

It wasn’t long ago that Blacks who could afford to purchase a house in San Francisco had to get a White person to front as the buyer. In the 1960s, the former San Francisco Giants great Willie Mays was denied the right to purchase a house where he chose to live because of his skin color, even though he was a famous baseball player.

Today banks use similar discriminatory practices to prevent Blacks from securing loans for homes and businesses. Have you ever heard, “Your credit score is too low,” “You haven’t been in business long enough” and “You haven’t been on your job long enough”? etc., etc. These comments are excuses loan officers will give; they are a form of apartheid and a cousin to old Jim Crow laws.

The banks need to change the way they do business in our community. You say, “Why change it? It works for me.” I say it doesn’t work, if the deck is stacked against you. Here’s how: Blacks were denied the right to acquire capital after being freed from slavery. Blacks could walk off the plantations, but, with no education and no money, they had nothing to protect themselves from the elements or from the hostility of Southern society and no financial wherewithal to compete in a racist society. Most were not able to read or write.

Blacks were denied the right to acquire capital after being freed from slavery. Blacks could walk off the plantations, but, with no education and no money, they had nothing to protect themselves from the elements or from the hostility of Southern society and no financial wherewithal to compete in a racist society.

Take a look, during the Reconstruction period after President Abraham Lincoln issued the Emancipation Proclamation and signed 13th Amendment. Some Blacks made great strides in the political arena, even garnering powerful positions in the U.S. House of Representatives. Then enter the politicians, landowners and banks; soon they were able to regain control of Southern institutions and pass Jim Crow laws, removing the threat of political advancement by their former Black slaves.

I believe today’s discriminatory practices stem from the period right after the Civic War when the Black Codes were imposed to keep Blacks economically disenfranchised, after the signing of Emancipation Proclamation, which supposedly freed Blacks from the harsh treatment of the institution of physical slavery.

“Sharecroppers were assigned a plot of land to work, and in exchange owed the owner a share of the crop at the end of the season, usually one-half. The owner provided the tools and farm animals. Farmers who owned their own mule and plow were at a higher stage and are called tenant farmers; they paid the landowner less, usually only a third of each crop. In both cases the farmer kept the produce of gardens …

“The disadvantages of sharecropping, however, soon became apparent. A new system of credit, the crop lien, became closely associated with sharecropping. Under this system, a planter or merchant extended a line of credit to the sharecropper while taking the year’s crop as collateral. The sharecropper could then draw food and supplies all year long. When the crop was harvested, the planter or merchants who held the lien sold the harvest for the sharecropper and settled the debt,” according to Wikipedia.

Take another example: During the foreclosures crisis, banks have seized title to millions of homes. They refuse to re-negotiate their predatory mortgages with the owners in good faith. Instead, the banks stand to lose more money by letting the property site vacant, open to vandalism and deterioration. It’s an epidemic here and in every Black community in the USA.

We all followed the banking crisis in the media and watched President Obama use his presidential power save the banks. He gave the banks loans that amounted to billions so that they wouldn’t go belly up. So why can’t he do the same for Blacks – bail out Blacks in America?

President Obama used his presidential power save the banks. He gave the banks loans that amounted to billions so that they wouldn’t go belly up. So why can’t he do the same for Blacks – bail out Blacks in America?

Let’s give our youth an advantage by increasing their skills to remake our community. Banks can play a major role in increasing our assets and capital, but we’ll have to push hard or start our own banks. Assets can also come in the form of employment opportunities for community residents by increasing capital for businesses in the form of a line of credit.

The problem with crime in the community can be traced to lack of employment opportunities in a meaningful occupation for young adults who are in their late teens and early 20s. If we give them a chance to participate in the economy – through employment in a trade or focusing on an educational track, for example – we can solve most of the problems affecting our community and beyond.

Muhammad al-Kareem
Former Congresswoman Cynthia McKinney sums it up: “United States was a great slaving nation, and it brought Africans over and enslaved them for centuries. This instituted a kind of culture that found it acceptable to abuse people, to oppress people, to deny their basic humanity. And they’ve done that with the Native American peoples, with Black people, they’re doing it now with Latinos, immigrants, Muslims, Arabs, Palestinians, to produce a particular political behavior, and that’s what it’s really all about: making sure that people behave politically in a way that’s predictable and confined, so that people surrender their power to interests that don’t really care about them.”

Muhammad al-Kareem, who founded the Bay View, then called the New Bayview, in 1976, can be reached at tutgraphics@yahoo.com. Talk with him about how advertising in the Bay View can grow your business.

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