"The democratization of credit"

From the Journal, The 'Democratization of Credit' is Over -- Now It's Payback Time, a typically Journal take on the financial crisis. Turns out it's all the fault of those pesky democrats

The democratization of credit began decades ago. Federal legislation in the late 1970s required banks to avoid discriminatory lending and meet the needs of local communities, spawning a wave of home buying and entrepreneurship in lower-income neighborhoods. The rate of homeownership in families with incomes in the bottom two-fifths rose to nearly 49% by 2001 from below 44% in 1989, according to Fed data analyzed by Mr. Mann at Columbia.

and shiftless poor folks:

Out of college and working at the shoe store, Ms. King kept up a busy social life, eating out several times a week and going to movies -- even as the collectors called. But she lost the shoe-store job in January, and then learned that a prospective new employer had rejected her after running a credit check. Fearing that her credit record would trip her up again and again, she resolved to fix her financial mess.

Gone are dinners at Red Lobster and Olive Garden and purchases like new basketball shoes. She has a part-time job as a tour-bus driver that pays $13 an hour plus tips. She held a second part-time job, in telemarketing, for several months, but it was on suburban Long Island, and getting there, using both the subway and a commuter train, finally became too much. She now is looking for a second part-time job closer by.

Not the fault of greedy bankers. Oh no.

Credit-card borrowing took a similar path. One cause was a 1978 Supreme Court decision that let banks charge whatever interest rate was legal in the state where their card operation was headquartered. The ability to charge higher rates made it more profitable to offer cards to risky borrowers. Adding oomph to both credit-card and mortgage lending was the growth of markets where lenders could sell their loans.

Like the Supreme Court wasn't ruling on a case brought by the banks themselves. Like that decision didn't just give the banks the end run around state usury laws they'd been seeking.

While the banking industry (and its mouthpiece) is happy to blame the woes wrought by their exploitation of low-income borrowers on the victims themselves, the truth is that banks profited handsomely from their pursuit of the poor and foolish, and they left the wreckage for someone else to clean up.