Review of "The Color Of Money: Black Banks and the Racial Wealth Gap," by Mehrsa Baradaran

 Review of

The Color Of Money: Black Banks and the Racial Wealth Gap, by Mehrsa Baradaran ISBN 9780674237476

Five out of five stars

The long-term consequences of racism

 It has been approximately fifty years since federal laws were passed making discrimination in housing and financial transactions illegal. Yet, the racial wealth gap persists. One of the most amazing and explanatory data points I have ever heard is about the consequences of the 2008 financial meltdown on black people versus white people. As a consequence of the meltdown, black people lost approximately 53% of their wealth while white people lost a more modest level of roughly 17%. 

 This was primarily due to black people having a higher percentage of their assets in their home than white people. It is also due to predatory lending practices by companies that perform actions such as payday loans, where short-term loans are made at very high rates of interest. 

 Baradaran traces the history of loans and the different ways black borrowers have been treated versus white people over the years. Given that mortgages generally have a duration of 30 years, the effects of discriminatory lending practices will linger for some time. It was surprising to read of the many ways that using financial services has been much more difficult for blacks than for whites. 

 Reading this book was very much an eye-opener. The explanations of the racial wealth gap are very understandable and the difficulties that black owned banks have had in conducting their business is very revealing. This book will go a long way in explaining to the intelligent reader why there are still pockets of poverty in the United States, 


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