Invisible Markets Netting Visible Results: When Sub-Prime Lending Becomes Predatory
26 Pages Posted: 18 Jan 2009
In this article, I argue that Ellison's metaphor of social invisibility - the societal undervaluing of minorities - is analogous to economic invisibility - the denial of fair access to credit to minorities. I then use the metaphor of invisibility as a basis for understanding the contemporary legal problem of predatory lending, or making credit available to borrowers at unreasonably high interest rates. Disguised as credit access to high-risk, underserved borrowers, predatory lending helps to create risk by offering borrowers products that do not adequately measure risk and that are not fairly priced.
Keywords: minorities, social invisibility, credit, fair access, predatory lending, high interest rates, risk, fair pricing
JEL Classification: K19, K29, K39
Suggested Citation: Suggested Citation