Perpetuating Poverty: Exploitative Businesses, the Urban Poor, and the Failure of Liberal Reform

Abstract

This article scrutinizes the rent-to-own, payday lending, and title pawn businesses – all of which target and exploit the urban poor. Each type of business has developed a sophisticated business model that features a standardized contractual agreement for dealing with customers. Reform efforts in the courts and legislatures have attempted to rein in these tawdry businesses, but these efforts have for the most part been unsuccessful. The businesses continue not only to exploit the urban poor but also to socio-economically subjugate them by trapping many into a virtually ceaseless debt cycle. In the end, a blanket proscription of these businesses might be the only way to drive them from the center-city and prevent them from perpetuating poverty.

Keywords: rent-to-own, payday lending, title loans, underclass, and urban poor