On October 5 and 6, Indianapolis will host the Midwest Asset Building Conference. The Conference will convene asset building coalitions from five states in the Midwest—Indiana, Illinois, Michigan, Minnesota, and Ohio—to learn about the challenges present in the asset building field and work toward identifying viable solutions. Fundamental to each challenge, from the small business credit gap to the pervasiveness of predatory financial practices to the racial wealth divide, is the objective to create and retain wealth.

Wealth creation refers to the process of accumulating assets while wealth retention refers to the ability to maintain ownership of existing assets. Wealth creation and retention are both an individual phenomenon, e.g., an investor purchasing stock, as well as a community phenomenon, e.g., a major employer divesting itself from a community.

A community-level example that has recently gained prominence in political discourse is the loss of manufacturing jobs in the rust-belt. Communities that were once vibrant manufacturing towns have felt the impact of employer divestment. The opioid crisis, which disproportionately affects rust-belt manufacturing communities, is one example of how loss of wealth destabilizes the economic well-being of families, as well as communities’ very social fabric. 

The Conference will discuss these structural problems—three of which are the small business credit gap, predatory financial products and practices, and the racial wealth divide.

Small businesses, which feel market swings more acutely than big businesses, are denied credit at a much higher rate. The credit gap is especially pronounced for minority-, women-, and rural-owned businesses—consequently, decreasing their opportunity to build wealth. 

Predatory financial products and practices—from student loans to debt collection to payday loans—continue to strip wealth from families, and particularly from communities of color. Sixty percent of payday loan borrowers in Indiana take out a new loan the day they pay off the old loan, which pushes borrowers into a debt trap that impacts the entire state’s economy. In Indiana, payday loans drain an estimated $70 million from the economy each year. 

In America, the typical white family holds 16 times more wealth than the typical black family. The racial wealth divide is a consequence of wealth-building policies that were designed to disadvantage people of color. As America moves toward becoming a majority-minority nation, the racial wealth divide worsens the political and economic outcomes for the entire country.

So what’s a community development practitioner to do? 

Attend the Midwest Asset Building Conference to find out! We’ll be discussing solutions—both universal and unique to the diverse communities in which we work, including:  

·         The benefits of the cooperative business model

·         Consumer protections and innovations in payday loan alternatives

·         Solutions to rectify the inequities implicit in past wealth-building policies