In a social and financial climate characterized by deep racial and socioeconomic divide, racism against credit card applicants and consumers is a core piece of the systemic inequality that perpetuates dramatic disparities in wealth, employment, health, and education. Over several decades, credit cards have evolved into an essential tool for lower- and middle-class families to maintain financial stability through strategic balancing between debt and disposable income. Now, without a credit card, many households cannot manage to meet the basic needs of their families. Credit card companies take advantage of this reality, imposing exploitative fees, interest rates, and other conditions on consumers who have no choice but to use the companies’ products. Even worse, the companies do so in a racially discriminatory way, burdening Black and Latino customers with the worst credit card terms, often unrelated to credit risk. This type of consumer racism dates back to the Reconstruction era and reflects an unbroken chain of laws and policies cementing racial economic inequality. Social norms and stereotypes make the resulting inequality appear cultural and personal instead of systemic and structural.
This Article is the first to apply a critical race theory analysis to the problem of racism against credit card consumers. After describing the role that history and stereotyping play in allowing credit card corporations to discriminate against consumers, it identifies fatal flaws in the two laws designed to address racial discrimination and inequality in credit, the Equal Credit Opportunity Act and the Community Reinvestment Act. It then proposes amendments to the Consumer Accountability Responsibility and Disclosure Act based on rehabilitative reparations theory and slavery disclosure laws that would require credit card companies to make significant investments into the communities they harm.