More than sixty million Americans have no FICO score at all because credit bureaus use data they cannot provide. And if you don’t have a credit score, it can be very hard to get a loan, rent an apartment, or convince an employer to hire you.

Driving home on Tuesday, I heard an interview on NPR with Lisa Servon, a professor of city and regional planning at the University of Pennsylvania. She was talking about her book and I was so impressed and intrigued that I stopped at Barnes & Noble to inquire if they had it. Ten copies had arrived that day and had not made it out to the Sociology section yet. One was brought to me from the storeroom.

If you only read one book this year, it should be this one. Most of us truly have no idea of how banking has changed since many of us opened our first bank accounts. Servon talks about how the industry as changed since she opened a pass book savings account in her hometown as a child in 1971:

“Banks like Pulaski still exist but have dwindled in number: very small banks (those with less than $100 million in assets) decreased by 85 percent between 1985 and 2013, while the number of very large banks (those with more than $10 billion in assets) nearly tripled. Local banking is now the exception rather than the norm . . .”

Servon had been doing research on consumer financial services when John Coleman, President of RiteCheck, was brought to one of her classes by Joy Cousminer, founder of Bethex Federal Credit Union. What she believed she knew about check cashing services and payday lenders was turned on its head by Coleman’s description of the community he served in the South Bronx and Harlem and why those services are needed. RiteCheck was founded in 1949 by his father-in-law Howard Stein, who at 92, still comes into work three days a week.

As Sevron describes it in her acknowledgements, “This book began with a question that turned into a quest. And, like all good quests, this one involved a journey, a series of vexing obstacles, a few riddles, and a terrific group of trusty sidekicks and wise elders.”

Understanding that quantitative data wasn’t telling the whole story of how the “unbanked” and “underbanked” used these “alternative financial resources,” she asked John Coleman if she could work as a teller for several months at RiteCheck to gather more qualitative data. Her research working at a branch location in the largely Latino community of Mott Haven relied on her co-workers’ deep understanding of the community and their long term relationships with their customers. Read More