By Sandip Roy, New American Media
http://www.alternet.org/story/82629/

The current economic downturn could lead to the greatest loss of assets for communities of color that's ever happened, says Alan Fisher, executive director of the California Reinvestment Coalition since 1992, which advocates for the right of low-income communities and communities of color to have fair and equal access to banking and other financial services. Alan Fisher was interviewed by NAM Editor and host of UpFront, Sandip Roy.

Whether we call it a recession or not, what's the effect of what's happening in the economy on the low-income communities who are part of your coalition?
I think low-income people and people of color have been struggling for many years now. The "recovery" has not helped them. Recent reports say that income levels for families are the same dollar-wise as they were in 2000, which means they are worth much less now. Food prices are going up, gas prices are going up and we have a huge housing crisis.

How many people are impacted by the housing crisis?
The housing crisis doesn't just impact those who are in the homes that are in trouble -- who in California may be half a million households -- but it impacts all of their neighbors and their city. Their neighbors' houses lose value, as their houses lose value. The cities are losing tax base, our whole state has been relying on home sales to keep going. The state says it has an $18 billion deficit in a fiscal year that ends June 30. I think we are in a deep crisis and whatever the economists may call it, regular people are suffering and having great difficulty.

Can you give an example of how regular people are suffering and what are the first signs of recession in these communities?
I think the signs of recession are people having to cut back on the basic things that they buy, on less meat, not being able to buy clothes for their children -- but much of this has been masked because of easy access to credit cards. Many people are in huge debt on their credit cards and have substituted those, or have taken out payday loans, to try to keep going. So, it's a dangerous situation that's been masked by the wealth of the most wealthy -- corporate profits -- while the people who are our neighbors are in tremendous trouble.

But wouldn't something like a recession rip this mask off, with the way people have been relying on credit cards and payday lenders to get by?

I think, whether we call it a recession or not, that it would be something that happens as people are unable to pay their credit card bills, as people are being forced to go into bankruptcy. With the new bankruptcy laws, it's even more punitive. Yet at the same time bankruptcies are going up.

Homelessness is also on the rise. There are many people who are tenants in homes, and if those homes are foreclosed on, then, even though they pay their rent every month, they are forced out. They don't get their security deposit back, and where do they go to look for housing? Rental prices are going up, so it's a tremendous squeeze on families.

There has been so much coverage of homeowners, but we haven't seen much on what has been the impact of the economic downturn on tenants.

I think we are just beginning to hear that. It's sort of hidden because you don't see it in the same aggregated fashion. We know it's happening; we're hearing it more and more. We're hearing from homeless organizations that it's impacting folks that are becoming homeless, but there are no numbers at this point that I know of.

Are you seeing a new profile of homeless people? Are homeless organizations reporting on new kinds of people who are becoming homeless and are coming to them for help?

I think it's just starting, so I haven't heard that yet. I've heard concerns about tenants and we've tried to get state legislature to do something about tenants, but the opposition from the mortgage industry and the bankers pushed it out of the bill.

Why are the mortgage industries opposing measures about tenants?

Because they want the houses, they want people out immediately, and they want to try to sell them again and recoup their money. As you can see from the Bear Stearns rescue, the concern is about the corporations at the federal level because of campaign financing. So no one cares that people are being forced out of their homes because these people aren't the big contributors; they might be written off as not even voting.

Where else would you be looking for to see the cracks, the great pressures that communities are going to be subjected to as result of the downturn?

What's caught my eye is that the city of Vallejo, Calif. almost went bankrupt, and it's still on the edge of that. They went bankrupt because they were paying their workers a decent wage. The governor took away the vehicle tax money when he first came into office, which meant that police and fire -- the most basic things that every city needs to have -- got cut.

You hear about libraries that are being closed down. They're talking about closing the parks; education and health care are being cut back by the governor. I think it's the whole infrastructure of society that's under attack. In a way, it's so large that it's hard for people even to take in what it means.

With the foreclosure crisis, for example, I've heard that one of the interesting things was that it was affecting both African-American communities and Latino communities really hard, but in different ways. African Americans were being affected mostly because they were existing homeowners who had refinanced their homes, not understanding the terms. For Latinos it was more of a language issue. First-time buyers had locked themselves into mortgages that they were not going to be able to pay. The results were the same -- both of them were losing homes -- but the way they were getting there was different. In cases of the economic downturn and recession, do you see that affecting different communities differently?

I think, as you are saying, the reasons for things may be different. The Asian-American and Pacific-Islander community -- the Korean Americans and Vietnamese Americans may be coming to home ownership later, like Latinos. It will have a broad impact, but I think each community is different in how it's going on.

But I know it's generally agreed that there's tremendous concern that this could be the greatest loss of assets for communities of color that's ever happened. We've all seen an increase in home ownership, but it was filled with fraud and greed on the part of the real estate industry and so people are in trouble now.

These communities are also reliant on payday lenders, especially poor communities, and I know your organization studies that. Have you seen any spike in payday lender abuse as a result of this downturn?

One of the difficulties with all of the statistics is that they're late. So, all we know about really is last year and that doesn't show a huge increase. But we are hearing that people are increasingly going to payday lenders, which are the lenders of last resort. We have a bill that we hope can make it through the legislature, to cap their interest rates.

The Federal Reserve has been taking some steps to avoid foreclosures; the state government is doing something. How would you grade their efforts?

I think the state government, the Federal Reserve, the federal legislature, the federal government are all making efforts that will have no large impact on the homeowner. Clearly, the federal government and the Federal Reserve had looked at large corporations and are concerned about that infrastructure. The predictions, which are probably very low, are that two million people could lose their homes. There's nothing that's comparable to that and many of the bills that would have really made a difference have been cut back in the legislature. There was an effort to try and soften the impact of bankruptcy on people, and that was soundly defeated by the corporate interests. There's been nothing that really can help people, and meanwhile thousands of people are losing their homes every week.