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Democratization and Its Discontents: Demobilizing Marginalized Borrowers

Democratization and Its Discontents: Demobilizing Marginalized Borrowers

(p.150) 5 Democratization and Its Discontents: Demobilizing Marginalized Borrowers
Democracy Declined
Mallory E. SoRelle
University of Chicago Press

Chapter five, Democratization and its Discontents: Demobilizing Marginalized Borrowers, investigates the political development of the so-called democratization of credit—which expanded access to credit to women, communities of color, and lower-income borrowers—and the political consequences for these historically marginalized groups. The chapter contends that the expansion of consumer financing is a natural outgrowth of the political economy of credit, and it produces the same policy feedback effects for historically marginalized borrowers that have de-politicized their mainstream peers. Chapter five draws on original survey data to demonstrate how marginalized borrowers subsequently experienced the privatizing and personalizing effects of consumer financial protections, resulting in diminished political engagement. While all groups of borrowers are beset by these demobilizing effects, they are especially consequential for those whose race, gender, and/or socioeconomic status puts them at greater risk of predatory lending practices in the first place. The chapter finds, however, that the degree to which marginalized borrowers place greater relative blame on market versus government actors is smaller, increasing the chance that these groups will respond to advocacy appeals for political action to combat predatory lending.

Keywords:   democratization of credit, low-income, race, gender, socioeconomic status, policy feedback, advocacy, political engagement, predatory lending, consumer financial protection

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