Congressman Elijah Cummings

This year Senator Elizabeth Warren and I have teamed up to launch a series of investigations — the Middle Class Prosperity Project — in order to focus greater congressional attention upon the bread and butter issues that matter the most to our nation’s working families.

In February, we examined the harsh reality that inadequate, stagnant wages persist despite overall worker productivity that has never been higher.  As Senator Warren observed, “In the 32 years from 1980 until 2012, 90 percent of Americans got zero income growth — nothing.”

Why?  A significant reason has been deliberate choices in Washington that have worsened the inequities that are starving America’s working families, suffocating consumer demand and endangering our economy.

In March and April, Senator Warren and I focused on rapidly increasing college costs, the often-staggering financial debt that threaten America’s middle class, and the exploitation of retirement savings by under-regulated “financial advisors.”

Then, in the wake of the Freddie Gray family’s personal tragedy, protests and upheaval, we brought our continuing investigation to Baltimore.  Here, on May 11, we were joined by our colleague, Congressman John Sarbanes, and financial experts to examine some of the fundamental challenges that our neighbors face.

Freddie Gray’s death brought renewed attention to the importance of police and criminal justice reform.  The aftermath also highlighted the systemic economic obstacles that far too many Americans must confront and attempt to overcome every single day.

The thousands peacefully protesting on Baltimore’s streets were standing up for human dignity, but they also were sending an economic and political message.  People are tired of being tired — and they are unwilling to take it quietly any more.

“Recent events in Baltimore are not the result of a single tragedy,” Senator Warren declared. “These events are also about millions of people, young and old, here and across this country, who find themselves struggling to make it in a system that is increasingly rigged against them.”

I must whole-heartedly agree.

Clearly, the economic and financial struggles that we are documenting by our investigations are not limited to Americans of Color.  Millions of Caucasian families are being harmed as well.

Yet, there is little doubt that Black families, as a group, are being hardest hit.  In 2013, the average wealth of America’s Caucasian families was $142,000, while the average wealth for African American families was $11,000.

We brought our investigations to Baltimore so that the eyes of the nation do not turn away before they see the full scope of our underlying economic challenges — and the urgent need to address them.

Here was our strategy.

We asked our expert witnesses in the Baltimore hearing to focus upon everyday financial transactions that middle class Americans take for granted — like cashing a paycheck or obtaining a small, short-term loan.

We focused upon the hardships and exploitation faced by families who do not have bank accounts or otherwise find it necessary to use “alternative” financial service providers: check cashers, liquor stores, on-line payday lenders and pawn shops.

Here is what the evidence revealed.           

The hardships that these families endure are pervasive, as one of our witnesses, Ms. Mitria Wilson of the Center for Responsible Lending, pointed out.  For the millions of American families, closed out of the regular banking system,  the average annual cost in interest and fees that they must pay to alternative financial providers is $2,412 — 10 percent of their incomes.  In perspective, that is more than the average family spends on food.

Maps of Baltimore compiled by the National Community Reinvestment Coalition graphically portrayed the dangerous and costly financial desert that dominates much of our city.  A close-up of Sandtown, where Freddie Gray lived, revealed only three bank branches — but 18 “alternative” financial providers.

While some of these alternative providers offer financial services on fair terms, others employ predatory and abusive terms that lock families into long-term cycles of high-interest debt that they cannot escape.

Lessons from Baltimore

Clearly, federal agencies like the Consumer Financial Protection Bureau are justified in promulgating stronger regulations against abuse.  Rather than trying to roll back consumer protections and weaken the Consumer Financial Protection Bureau, we must ensure that it has authority to enforce fair regulations that will protect all consumers from abusive financial service providers.

The Congress should take a closer look at the Community Reinvestment Act, which was designed to encourage banks to invest in our communities — and the Postal Service should expand its financial services offerings, just as it did many decades ago.

These reforms would be important first steps, but far more will be required.

We need to redouble our support for early education programs like Head Start, health programs for prenatal care, lead paint abatement, early childhood development, community college programs, and employment training programs.  We need to invest in infrastructure improvements that will help our communities, help our businesses, and help our workers.

What we must stop doing is what Washington has been doing for the past several years.  We must stop slashing the funding for these critical programs, stop imposing harmful sequestration cuts and shutting down the government, and stop giving lucrative tax breaks to the wealthiest Americans and corporations.

Our nation’s future prosperity must rest upon the shoulders of an expanding middle class.  Working together, we can assure that these lessons from Baltimore guide our way.

Congressman Elijah Cummings represents Maryland’s 7th Congressional District in the United States House of Representatives.