As part of Congress’s financial stimulus response to the COVID-19 pandemic, the CARES Act included $1,200 stimulus checks to all qualifying Americans—but there was no clear plan for delivering these checks to unbanked and underbanked Americans. Unfortunately, financial inclusion—access to payment systems, credit products, and financial services of all kinds—is an afterthought in politics and policymaking debates, but it’s wholly necessary to build an equitable economy.
Everyone deserves financial and credit services—and they shouldn’t need an app for access. In “Rethinking Financial Inclusion: Designing an Equitable Financial System with Public Policy,” Mehrsa Baradaran (a professor of law at the University of California, Irvine) explains why it’s time to rethink financial inclusion and build an equitable system. She proposes a different understanding of financial inclusion, which situates the problem of financial inclusion as a problem rooted in the design of the financial system that requires structural redesign, rather than market-oriented patch fixes driven by neoliberal ideology.
Ultimately, financial exclusion is a result of policy choices that have centered bank credit as a principal means of access; financial redesign—not new technologies at the margins—can remedy the problem by changing the paradigm. Like moving from gold to silver, a change in the legal foundations of credit and financial policy can create a more just and equitable economy.