BORROWING EQUALITY - Columbia Law Review

For the last fifty years, Congress has valorized the act of borrowing money as a catalyst for equality, embracing the proposition that equality can be bought with a loan. In a series of bedrock statutes aimed at democratizing access to loans and purchase money for marginalized groups, Congress has evinced a “borrowing-as-equality” policy that has largely focused on the capacity of “credit,” while acoustically separating its treatment of “debt” as though one can meaningfully exist without the other. In taking this approach, Congress has proffered credit as a means of equality without expressly accounting for the countervailing force of debt relative to social subordination. Yet, debt has itself functioned as a mechanism of the very subordination that Congress’s invocation of “credit” aspires to address.

This Article argues that because in articulating a borrowing-as-equality policy Congress is implicitly encouraging debt among marginalized communities, Congress should develop policies that recognize both the potential upside value of borrowing and the particular vulnerabilities that debt creates for socioeconomically marginalized groups. More broadly, any policy that invokes borrowing as a social good must engage more deeply with how credit and debt work in a social context. In other words, credit cannot meaningfully function as a social good without due attention to and a solution for the work of debt as a social ill.

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* Assistant Professor of Law, University of California, Berkeley Law School. For comments and conversation that significantly improved this Article, I am grateful to Kathryn Abrams, Abhay Aneja, Ken Ayotte, Ralph Richard Banks, Guy-Uriel Charles, Mark Gergen, Jonathan Gould, Sara Sternberg Greene, Sonia Katyal, Daryl Levinson, Adam Levitin, Amelia Miazad, Joy Milligan, Saira Mohamed, Tejas Narechania, Chrystin Ondersma, Manisha Padi, K-Sue Park, Frank Partnoy, John Pottow, Bertrall Ross, Andrea Roth, Jeff Selbin, Erik Stallman, Karen Tani, Justin Weinstein-Tull, the participants of the Jerome M. Culp Colloquium at Duke Law School, and the participants of the Law and Political Economy Project’s Racial Capitalism Workshop. I thank Tessa DeJong, Kacey Read, and the Berkeley Law librarians for excellent research assistance, and Oluwatumise Asebiomo, Ruth Hirsch, Yerv Melkonyan, and the editors of the Columbia Law Review for their kindness, care, and diligence in marshaling this Article to its publication. As ever, I am indebted to Esteban Longoria for steadfast encouragement and unconditional support in all things. Any errors that remain in this work are my own.

Introduction

Can equality be bought with a loan? Congress seems to believe so. For at least the last fifty years, Congress has articulated a legislative policy premised on the conviction that by democratizing access to borrowed money, including conventional loans and purchase money, marginalized groups, like women and African Americans, can buy their way to increased socioeconomic inclusion, better relative economic health, and even first-class citizenship. 1 E.g., Monica Prasad, The Land of Too Much 221–26 (2012) [hereinafter Prasad, Land of Too Much] (describing the “movement for access to credit” for women and African Americans that resulted in the passage of several key federal statutes aimed at democratizing credit and noting how “the democratization of credit at mid-century had created support for credit access from across the political spectrum by the 1970s”). In this regard, Congress has valorized the act of borrowing money, embracing the proposition that equality can be bought with a loan. 2 See Michael S. Barr, Credit Where It Counts: The Community Reinvestment Act and Its Critics, 80 N.Y.U. L. Rev. 513, 544 (2005) [hereinafter Barr, Credit Where It Counts] (describing the Community Reinvestment Act of 1977 as “part of the federal government’s response to the long history of private sector and official discrimination in housing and credit markets”). It has treated the ability to borrow money as an unqualified public good, duly capable of and appropriate for mitigating socioeconomic inequality for marginalized groups.

This “borrowing-as-equality” policy, as I call it, is undermined by data suggesting that women and African Americans, among other marginalized groups, continue to struggle at a group level when it comes to socioeconomic parity notwithstanding greater access to credit. 3 E.g., Rachel E. Dwyer, Credit, Debt, and Inequality, 44 Ann. Rev. Socio. 237, 245–46 (2016) (noting that “[t]he role of debt in heightening economic insecurity” among marginalized groups is “likely a key reason for the heterogeneity in [the] effects [of student loan borrowing] in socioeconomic attainment”); see also Raj Chetty, Nathaniel Hendren, Maggie R. Jones & Sonya R. Porter, Race and Economic Opportunity in the United States: An Intergenerational Perspective, 135 Q.J. Econ. 711, 712–18 (2020) (studying intergenerational wealth, observing a persistent wealth gap between African Americans and white Americans, and noting that “reducing the black-white income gap will require policies whose effects cross neighborhood and class lines and increase intergenerational mobility”); Keeanga-Yamahtta Taylor, Against Black Homeownership, Bos. Rev. (Nov. 18, 2019), http://bostonreview.net/race/keeanga-yamahtta-taylor-against-black-homeownership (on file with the Columbia Law Review) [hereinafter Taylor, Against Black Homeownership] (“The assumption that a mere reversal of exclusion to inclusion would upend decades of institutional discrimination underestimated the investments in the economy organized around race and property.”). Some scholars have viewed this policy as intentional. For example, Professor Greta Krippner has argued that the democratization of credit to include marginalized borrowers is best understood as a part of broader political strategy to address the overall economic upheaval of the 1970s. Greta R. Krippner, Democracy of Credit: Ownership and the Politics of Credit Access in Late Twentieth-Century America, 123 Am. J. Socio. 1, 32 (2017) [hereinafter Krippner, Democracy of Credit]. Professor Monica Prasad has argued that the democratization of credit for marginalized groups is best understood as the result of the historical American commitment to consumption as the driver of economic policy. Monica Prasad, The American Way of Welfare: Political-Economic Consequences of a Consumer-Oriented Growth Model 3 (2013), https://www.demos.org/sites/default/files/publications/Prasad.pdf [https://perma.cc/B5PH-NMWM]. More than that, the disproportionate burden and corrosive work of overwhelming debt is a significant factor in this outcome, even as markers of equality like income remain significantly gendered and raced. 4 See, e.g., Am. Ass’n of Univ. Women, Deeper in Debt: Women and Student Loans 1–2 (2017), https://www.aauw.org/app/uploads/2020/03/DeeperinDebt-nsa.pdf [https://perma.cc/3WQV-3JVV] [hereinafter AAUW Report] (noting that women earn less than men and therefore pay back their loans more slowly, and that “[t]he pace of repayment was particularly slow for black and Hispanic women, as well as for men in those groups”). Thus, the increased ability to borrow money, cast as a mechanism of positive social change, may function in some ways as a Trojan horse, wheeling in the unique dangers of indebtedness to the front gates of marginalized communities and threatening their already tenuous socioeconomic existence. 5 For example, Professor Rachel E. Dwyer observes that:
Loans may help Black students gain access to college education, but Black debtors also experience higher default rates and slower wealth accumulation over the longer term. The risks of the student loan system thus appear to fall on the populations who most struggle to gain access to higher education in the first place, a perverse outcome for a system purportedly intended to facilitate access to postsecondary education.
Dwyer, supra note 3, at 244 (internal citations omitted); see also Keeanga-Yamahtta Taylor, Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership 187 (2019) [hereinafter Taylor, Race for Profit] (observing, in the context of the Fair Housing Act’s low-income homeownership program, that “[i]nstead of independence, security, and investment, homeownership for poor Black women was an invitation to greater state surveillance, continued economic marginality, and the inheritance of a debt burden”); Taylor, Against Black Homeownership, supra note 3 (questioning, in the context of the federally sanctioned expansion of mortgage lending for low-income African Americans, “the advisability of suturing economic well-being to a privately owned asset in a society where the value of that asset will be weighed by the race or ethnicity of whoever possesses it”); cf. Elizabeth Warren, The Economics of Race: When Making It to the Middle Is Not Enough, 61 Wash. & Lee L. Rev. 1777, 1779 (2004) [hereinafter Warren, Economics of Race] (observing that “bankruptcy data reveal a disturbing story of Hispanic and black middle classes that are at greater risk for economic collapse than their white counterparts”).

Although the mechanisms that result in this state of affairs are undoubtedly complex, a key, underrecognized aspect of the problem is Congress’s disjointed approach to its borrowing-as-equality policy. Specifically, Congress has largely bifurcated its regulation of “credit” from its regulation of “debt.” 6 See infra Part II. As an essential matter, however, credit and debt are quantumly entangled, given that a loan is comprised of both credit and debt. 7 E.g., Gustav Peebles, The Anthropology of Credit and Debt, 39 Ann. Rev. Anthropology 225, 226 (2010). Nevertheless, Congress has curiously disconnected its regulation of credit and debt, acoustically separating them—to borrow Professor Meir Dan-Cohen’s classic phrasing 8 Meir Dan-Cohen, Decision Rules and Conduct Rules: On Acoustic Separation in Criminal Law, 97 Harv. L. Rev. 625 (1984). In this seminal work, Professor Dan-Cohen critiqued the conflation of “decision rules” (directed to officials) and “conduct rules” (directed to the public) that was prevalent in criminal law at the time he wrote the article. Id. at 627. He argued that because each set of rules concerns different “norm-subjects” engaged in distinct “norm-act[s],” it is necessary (specifically in the context of criminal law) to maintain a distinction between the two types of rules in order to preserve their specific normative goals. Id. at 628–30. In making these arguments, Professor Dan-Cohen offered the analogy of “acoustic separation . . . as an heuristic device for distinguishing conduct rules from decision rules and for diagnosing possible tensions in the law that are caused by policies best served when decision rules differ from conduct rules.” Id. at 634. The benefit of acoustically separating decision rules from conduct rules, then, was to limit transmission of confounding norms not meant to inform the behavior of either distinct group. Id. at 631–32. In other words, strict acoustic separation in the criminal law context would “ensure[] that conduct rules cannot, as such, affect decisions; similarly, decision rules cannot, as such, influence conduct.” Id. at 631. As applied in the context of credit and debt, the principle of acoustic separation supports the notion that “credit” and “debt” should be treated separately as a legislative matter. —in ways that assume credit can meaningfully function as a mechanism of enhanced socioeconomic capacity separately from its complement, debt. Moreover, this bifurcated approach exhibits tension in its relatively optimistic and expansive posture in the treatment of credit as compared to its relatively negative and restrictive treatment of debt. 9 See infra Part II; see also, e.g., Abbye Atkinson, Race, Educational Loans, & Bankruptcy, 16 Mich. J. Race & L. 1, 11 (2010) [hereinafter Atkinson, Race and Bankruptcy] (reporting bankruptcy data suggesting that “attaining a higher level of education does not appear to shield African Americans against financial ruin”).

Specifically, beginning in the mid to late 1960s and continuing throughout the 1970s, Congress passed a suite of laws aimed at addressing inequality more broadly by improving the ability of marginalized groups to borrow money in the conventional consumer capital markets. 10 E.g., Michael S. Barr, Modes of Credit Market Regulation, in Building Assets, Building Credit: Creating Wealth in Low-Income Communities 205, 206 (Nicolas P. Retsinas & Eric S. Belsky eds., 2005) (“In response to these . . . concerns [that predatory or abusive lending practices are targeted at minorities], Congress has enacted a wide range of federal laws and subsidy programs that affect the provision of credit.”); Sara Sternberg Greene, The Bootstrap Trap, 67 Duke L.J. 233, 257 (2017) (“Congress eventually responded, and beginning in 1974, it passed legislation and a series of targeted amendments that sought to end discrimination in credit evaluations and lending.”). Significant among these interventions were the Higher Education Act of 1965 (HEA), which made it easier for financially constrained students to borrow money for higher education; 11 Higher Education Act of 1965, Pub. L. No. 89-329, 79 Stat. 1219 (codified as amended at 20 U.S.C. §§ 1001–1107 (2018)). the Consumer Credit Protection Act of 1968 (CCPA), which implemented a regime to make lending fairer through heightened transparency; 12 Consumer Credit Protection Act, Pub. L. No. 90-321, 82 Stat. 146 (1968) (codified as amended at 15 U.S.C. §§ 1601–1616 (2018)). the Equal Credit Opportunity Act of 1974 (ECOA), which prohibited lending discrimination on the basis of sex and race, among other protected categories; 13 Equal Credit Opportunity Act, Pub. L. No. 93-495, 88 Stat. 1521 (1974) (codified as amended at 15 U.S.C. §§ 1691–1691f). and the Community Reinvestment Act of 1977 (CRA), which encouraged conventional lenders to make loans in marginalized communities that had been historically excluded from mainstream consumer capital markets. 14 Community Reinvestment Act of 1977, Pub. L. No. 95-128, 91 Stat. 1117 (codified as amended at 12 U.S.C. §§ 2901–2908 (2018)). In passing these statutes, Congress acted in part to address the demands of marginalized groups who, in a world in which access to borrowed capital was increasingly synonymous with belonging, came to believe that equal access to conventional loans 15 A conventional loan is a privately originated loan not backed by government insurance. Conventional Mortgage, Black’s Law Dictionary (11th ed. 2019). and purchase money 16 Giuliano G. Castellano & Marek Dubovec, Credit Creation: Reconciling Legal and Regulatory Incentives, 81 L. & Contemp. Probs. 63, 68 (2018) (defining purchase money as “credit to finance the acquisition of specific assets”); see also U.C.C. § 9-103(a)(1) (Am. L. Inst. & Unif. L. Comm’n 2012) (defining “purchase-money collateral” as “goods or software that secures a purchase-money obligation incurred with respect to that collateral”). was integral to their broader quest for equality and first-class citizenship. 17 Prasad, Land of Too Much, supra note 1, at 221 (observing that by the 1970s, credit was “a central feature of American life” that “remained constrained for many Americans”); Greene, supra note 10, at 254–55 (“In the mid-twentieth century, . . . civil rights and women’s rights groups were behind the push to mandate uniform standards of credit.”).

Consequently, the HEA, CCPA, ECOA, and CRA are steeped in the notion that borrowing money is a social good, capable of addressing, at least in part, deeply embedded social pathologies like racialized and gendered socioeconomic exclusion and, more broadly, entrenched social subordination. 18 See Barr, Credit Where It Counts, supra note 2, at 552 (“In addition to addressing discrimination by helping to overcome market failures that affect minority households, [the] CRA helps to reinforce [the] ECOA’s antidiscrimination norms directly.”). In embracing the notion that borrowing money is a universal social good, however, these statutes focus mainly on “credit” as a means of capacity, with little attention to “debt” and its consequences. 19 See infra Part II; see also Abbye Atkinson, Rethinking Credit as Social Provision, 71 Stan. L. Rev. 1093, 1134 (2019) [hereinafter Atkinson, Rethinking Credit] (describing the social significance of credit “in the Civil Rights era in light of the inequities in credit availability and quality experienced by racial minorities, women, and the poor”). Instead, even while recognizing that increasing access to credit raised the specter of unmanageable debt, Congress addressed “debt” separately and without a complementary veneer of capacity in a set of contemporaneous laws: principally in the Bankruptcy Reform Act of 1978 (Bankruptcy Code), regulating the discharge of distressed debt, 20 Bankruptcy Reform Act, Pub. L. No. 95-598, 92 Stat. 2549 (1978) (codified as amended at 11 U.S.C. §§ 101–1532 (2018)). and, to a lesser extent, the Fair Debt Collection Practices Act of 1977 (FDCPA), regulating the practices of third-party debt collectors. 21 Fair Debt Collection Practices Act, Pub. L. No. 95-109, 91 Stat. 874 (1977) (codified as amended at 15 U.S.C. § 1692 (2018)).

More than just isolated in substance, the Bankruptcy Code and the FDCPA also evince a more cynical and suspicious approach toward borrowing, and more specifically borrowers, than the credit optimism implicit in the HEA, CCPA, ECOA, and CRA. For example, in its specific focus on debt, the Bankruptcy Code, as amended over time, has become increasingly restrictive and distrustful toward debtors, 22 See, e.g., Karen Gross, Preserving a Fresh Start for the Individual Debtor: The Case for Narrow Construction of the Consumer Credit Amendments, 135 U. Pa. L. Rev. 59, 76–82 (1986) (describing the anti-debtor shifts in bankruptcy policy that resulted in the restrictive Consumer Credit Amendments of 1984); see also Elizabeth Warren, The Changing Politics of American Bankruptcy Reform, 37 Osgoode Hall L.J. 189, 192–96 (1999) (describing the influence of political lobbying by creditors for Congress to limit discharge rights). while the FDCPA, by regulating only third-party debt collectors, allows loan originators to pursue otherwise restricted practices to collect debt. 23 15 U.S.C. § 1692a (“‘[D]ebt collector’ means any person who . . . regularly collects or attempts to collect . . . debts owed or due or asserted to be owed or due another. . . . The term does not include . . . any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor.”). Thus, in the context of these two debt-focused laws, Congress’s progressive views and optimism about the value and capacity of borrowing seem to fade away.

The existing legal literature has recognized the socioeconomic consequences of indebtedness on marginalized communities but has done so primarily in the context of the existing bifurcation of credit and debt. 24 E.g., Abbye Atkinson, Modifying Mortgage Discrimination in Consumer Bankruptcy, 57 Ariz. L. Rev. 1041, 1061–69 (2015) (arguing that existing limits on the discharge of mortgage debt in bankruptcy disproportionately affect marginalized borrowers); Kristin Brandser Kalsem, Bankruptcy Reform and the Financial Well-Being of Women: How Intersectionality Matters in Money Matters, 71 Brook. L. Rev. 1181, 1202 (2006) (endorsing the view that bankruptcy, and thus debt specifically, is “a ‘women’s issue’ . . . in the same way that it is a ‘societal issue’—for myriad, interrelated, and complex reasons”); Chrystin Ondersma, Small Debts, Big Burdens, 103 Minn. L. Rev. 2211, 2211–13 (2019) (noting the harms of even small debts on impoverished people and arguing for a more efficient system of debt relief for those who disproportionately carry these small debts); Katherine Porter, The Damage of Debt, 69 Wash. & Lee L. Rev. 979, 986 (2012) [hereinafter Porter, Damage of Debt] (arguing that calls to limit discharge rights in bankruptcy have been misguided insofar as they have failed to meaningfully consider the “generosity of debt relief against the harms of debt”); Elizabeth Warren, What Is a Women’s Issue? Bankruptcy, Commercial Law, and Other Gender-Neutral Topics, 25 Harv. Women’s L.J. 19, 52 (2002) (describing bankruptcy as a “women’s issue” in light of “[t]he sheer number of middle-class women who are in such economically desperate circumstances that they must file for bankruptcy”); see also Deborah Thorne, Women’s Work, Women’s Worry?: Debt Management in Financially Distressed Families, in Broke: How Debt Bankrupts the Middle Class 136, 141–46 (Katherine Porter ed., 2012) (describing the disproportionate incidence of stress, depression, and insomnia among women in bankruptcy). These accounts and their suggestions for reform are important and vital, yet scholars have not addressed the tension that exists between Congress’s embrace of the reverie of credit as capacity and its separate and opposite treatment of debt. This Article fills this gap by surfacing Congress’s bifurcated approach—namely, treating borrowing money as a social good and owing money as a personal failure. It further demonstrates how this approach is in deep tension with itself if, first, one assumes that borrowing as equality is not meant to be a deliberately ineffective policy implemented to maintain the social status quo under the guise of credit opportunism and, second, one accepts that “credit and debt stand as an inseparable, dyadic unit,” 25 Peebles, supra note 7, at 226. both invoking a singular relationship that in our market society is satisfied only by complete equivalence. 26 David Graeber, Debt: The First 5000 Years 121 (2011); Michael D. Sousa, Debt Stigma and Social Class, 41 Seattle U. L. Rev. 965, 966 (2018). It argues that because credit and debt are “two sides of the same coin,” 27 Keith Hart, The Anthropology of Debt, 22 J. Royal Anthropological Inst. 415, 416 (2012). the regulation of one necessarily implicates the regulation of the other. Accordingly, Congress’s bifurcated approach imperils its borrowing-as-equality policy because for marginalized groups, the optimism of credit as capacity seems to yield readily to the corrosive impact of debt. 28 Dwyer, supra note 3, at 245–46, 253 (describing negative consequences of debt and noting that “[t]he experience of debt and financial fragility is thus different across . . . social groups defined by class, race/ethnicity, and other social status”).

Because debt affects marginalized groups disproportionately and more severely, its invocation as a source of equality and mobility may simply further entrench the very inequality it is offered to ameliorate. For example, the disproportionate incidence of educational debt among, and the particular burden of educational debt on, women and African Americans is instructive. Congress has long advanced the position that bor-rowing money for education can function well as a catalyst for equality, but the facts undermine this position: At the start of the 2020s, women and African Americans are drowning in student loan debt but have not made significant relative inroads in terms of income or wealth equality. 29 A recent study of college students shows that while the numbers of women and African Americans who attend college have significantly increased over the last fifty years, their debt has similarly increased in ways that are disproportionately detrimental to their overall wellbeing. AAUW Report, supra note 4, at 3, 9, 14 (observing that “women—especially low-income women and women of color—are disproportionately endangered by student debt”); see also Dwyer, supra note 3, at 244 (observing that although “[l]oans may help Black students gain access to college education,” Black student borrowers “experience higher default rates and slower wealth accumulation over the longer term”). Dwyer concludes that “[t]he risks of the student loan system thus appear to fall on the populations who most struggle to gain access to higher education in the first place, a perverse outcome for a system purportedly intended to facilitate access to postsecondary education.” Dwyer, supra note 3, at 24.

This Article argues that the bifurcation and lack of complementarity in Congress’s treatment of credit and debt undermine the potential of borrowing money to function as a tool of equality and mobility for reasons related to the deeper inequity that socially marginalized groups continue to experience. 30 E.g., A. Mechele Dickerson, Sorting the Neighborhood, 23 J. Affordable Hous. & Cmty. Dev. L. 311, 321 (2015) [hereinafter Dickerson, Sorting the Neighborhood] (noting continued effects of redlining in both persistent harmful stereotypes that Black neighborhoods are less safe and in home values themselves). Specifically, debt is not the universal catalyst of mobility and equality that marks Congress’s approach to its credit-specific borrowing-as-equality policy. Instead, debt itself often functions as a force of subordination rather than liberation, “justifying [collection] behavior that would otherwise seem utterly immoral,” undermining the social good ascribed to credit, and reproducing relationships marked by hierarchy. 31 Graeber, supra note 26, at 158; cf. Angela P. Harris, Theorizing Class, Gender, and the Law: Three Approaches, 72 L. & Contemp. Probs. 37, 53 (2009) (“Another example of how capitalism and gender converge in ways that produce injustice at the level of subjection has to do with economic marginalization and the social powerlessness it produces.”). Accordingly, because in articulating a borrowing-as-equality policy Congress is implicitly encouraging debt among marginalized communities, this policy should incorporate a complementary view of credit and debt that recognizes both the potential upside value of borrowing and the particular vulnerabilities debt creates for marginalized groups. 32 Laura M. Tach & Sara Sternberg Greene, “Robbing Peter to Pay Paul”: Economic and Cultural Explanations for How Lower-Income Families Manage Debt, 61 Soc. Probs. 1, 16 (2014) (noting that “[d]ebt plays a key role in the reproduction of social inequalities”); see also Mehrsa Baradaran, Jim Crow Credit, 9 U.C. Irvine L. Rev. 887, 937 (2019) [hereinafter Baradaran, Jim Crow Credit] (noting, in reference to the CRA, that “[o]nce the Supreme Court decided that past injustice could not be rectified through the law, the nation appeared to erase its memory . . . and allow for . . . shortsighted arguments in opposition to any program designed to address a historic wrong”). In other words, a progressive credit policy is necessarily limited when combined with a restrictive debt policy that does not account for how structural inequality meaningfully inhibits future cash flow and reinforces and exacerbates existing social inequality. 33 Baradaran, Jim Crow Credit, supra note 32, at 937 (observing that “[a] history of segregation explains why the ghetto does not yield profitable loans” and that “segregation was enacted through lending discrimination perpetuated by the very firms now being asked to close the gap”).

This Article proceeds in four Parts. Part I lays the groundwork for understanding both how Civil Rights and Women’s Rights activists came to view access to conventional loans and purchase money as a platform for equality and how, as a consequence, Congress turned to borrowing as equality in the 1960s and 1970s. Part II then maps the contours of Congress’s bifurcated legislative response, presenting its borrowing-as-equality policy, as evinced by the HEA, CCPA, ECOA, and CRA, on the one hand, and the Bankruptcy Code and FDCPA on the other hand. It uses the text and legislative histories of these statutes to demonstrate how, in turning to the democratization of conventional lending as a mechanism of increased equality, Congress merely invoked the capacity of “credit” without significant reference to debt. Meanwhile, Congress bifurcated its contemporaneous treatment of debt as though it is possible to invoke “credit” without its constant companion. Moreover, even as Congress treated credit optimistically in the HEA, CCPA, ECOA, and CRA, it took a relatively restrictive and regressive approach to its treatment of debt in the Bankruptcy Code and the FDCPA.

Part III offers an account of how this bifurcation is relevant to the socioeconomic status of marginalized groups, particularly with regard to their fraught economic and noneconomic experiences with debt. Considering women and African Americans as examples, 34 A word about intersectionality: This Article often discusses women and African Americans as separate groups, which undoubtedly detracts from and minimizes the unique and important experiences of African American women with debt. Cf. Kimberle Crenshaw, Mapping the Margins: Intersectionality, Identity Politics, and Violence Against Women of Color, 43 Stan. L. Rev. 1241, 1244 (1991) (“[T]he experiences Black women face are not subsumed within the traditional boundaries of race or gender discrimination . . . and [] the intersection of racism and sexism factors into Black women’s lives in ways that cannot be captured wholly by looking at . . . race or gender . . . separately.”). This is a shortcoming that bears explicit and duly self-conscious recognition. Nevertheless, this Article points to intersectional accounts of the effects of debt where the data is available and, in the later discussion of feminist activism around access to credit, circumscribes that activism in terms of its intended beneficiaries—namely, white women. See infra section I.C.2. it first shows how, notwithstanding expanded access to loans and purchase money, in current times these groups remain among the most vulnerable when it comes to debt and have not realized meaningful relative advances in certain metrics of equality like income. It then marshals a burgeoning social science literature on debt to show how, more than just a purely economic menace, debt is especially dangerous for these groups in its capacity as an institution of social subordination that actively engages in hierarchy making and reproduction.

Part IV makes a set of prescriptive suggestions for meaningful change to borrowing as a formal policy for equality. First, it argues that in its proffer of subsidized borrowing as a means of equality, Congress should use unified terminology to better capture and convey a more realistic picture of the relative positive and negative aspects of borrowing. This means eschewing, both in discourse and legislation, the selective semantic use of “credit” to refer to borrowing money as a social good in favor of a more realistic representation of the future liability inherent in borrowing.

Second, to the extent that Congress intends the existing borrowing-as-equality statutes to promote both the economic and noneconomic welfare of marginalized groups, Congress should amend its procredit statutes to expressly account for the countervailing force of debt on the communities for whom the benefits of those statutes are intended. For example, Congress might add intrastatutory modification or discharge of violative loans rather than subjecting distressed borrowers to the collateral damage of a global bankruptcy filing. This type of statutory change would recognize that marginalized groups are going to struggle and fail dispro-portionately in the consumer credit market for reasons that have more to do with entrenched racism, sexism, and the like, and less to do with profligacy or lack of personal responsibility.

Finally, and most broadly, Part IV argues that any policy that invokes market-based borrowing as a social good must account for the embeddedness of credit and debt in the broader social context—a context that Congress’s current borrowing-as-equality policy seems to ignore. 35 See Jedediah Britton-Purdy, David Singh Grewal, Amy Kapcznski & K. Sabeel Rahman, Building a Law-and-Political-Economy Framework: Beyond the Twentieth Century Synthesis, 129 Yale L.J. 1784, 1794 (2020) (defining the “Twentieth Century Synthesis” in which commitments to economic efficiency in private law have eclipsed the salience of “distribution, power, and democracy” in the regulation of the economy). The authors observe that “[b]y centering efficiency as a value and making key assumptions about markets and how they work, the Twentieth-Century Synthesis [has] marginalized questions of power that had been central to legal analysis since at least the time of legal realism.” Id. at 1818; accord Emma Coleman Jordan, The Hidden Structures of Inequality: The Federal Reserve and a Cascade of Failures, 2 U. Pa. J.L. & Pub. Affs. 107, 180 (2017) (arguing that, in the context of macroeconomic reform, “the Fed must identify and incorporate social and political financial patterns of exploitation in models of systemic risk”). All of the borrowing-as-equality statutes presented above are meant to work within the familiar public–private sphere that increasingly defines American social provision. 36 Jacob S. Hacker, The Divided Welfare State 9 (2002) (noting the “peculiar public-private character of American social welfare practice”). This approach, with its reliance on private actors to implement government policy, must acknowledge and wrestle with the ways in which private actors often contaminate attempts to engage in market-focused social change with their own biases and prior commitments to the status quo. Moreover, the profit motive similarly corrupts the appropriation of federal dollars to subsidize market-based social change by prioritizing shareholder value and profit margins over communitarian interests in meaningful social change. Thus, by essentially privatizing equality and social mobility through the subsidy of borrowing, Congress is encouraging the most vulnerable groups to invest in their own mobility and to fend for themselves in an imperfect capitalist society plagued by discrimination, raced and gendered hierarchy, and other socioeconomic pathologies that essentially limit the expected return on that investment. In attempting to harness the power of borrowed capital for social aims, Congress has an obligation to address the broader consequences of predictable failure in this context.