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On Saturday mornings, locals shuffle through the ACE Cash Express at 16th and Mission in San Francisco, greeting one another in Spanish, if at all. The storefront signage — “Fast Loans Prestamos” — is unremarkable here, between pentecostal churches and stands of Tajin-salted mango. Here, in the city’s historically Latinx Mission District, the median family income hovers around $67,000 and one-third of households speak only Spanish. ACE is surrounded by its payday-lending competitors: one per block, each somehow more excited than the last, promising cash quicker than the last.
But three miles away, the garish storefronts are gone. Sidewalk grocers are traded out for Lululemon in the Marina, a neighborhood that’s 83% white with a median family income of nearly $200,000. And instead of Money Marts and Check ‘n Gos plastered with “deposito directo, pregunte aqui,” traditional banks stud the streets: two Chase Banks, Bank of America, a Wells Fargo if you’re feeling colorful.
Nobody loves a big bank. But mainstream banks, for all their flaws, offer checking accounts, interest-bearing accounts, investment services, home mortgages, car loans, and bill-pay services — all of which help build credit and support wealth over time. They also impose barriers to entry in the form of specific (and sometimes prohibitive) ID requirements, minimum-balance and credit requirements, fees, byzantine interlocking services, and fewer branches in underbanked neighborhoods. When low- and middle-income-people of color gain access, it’s often on a discriminatory basis, accompanied by higher fees and lower rates of approval. It’s no wonder, then, that nearly half of all Black and Latinx households in the country are unbanked — without a member that holds a checking or savings account — or underbanked and still reliant on short-term, high-interest financial services, despite having an account.
Out of these cracks in mainstream banking spring ad-plastered payday storefronts. The oft-cited statistic is that, in America, payday lenders outnumber McDonald’s. Though they hardly existed in the 1990s, they’re ubiquitous now — the result of banking deregulation and industry lobbying to avoid state usury laws.
