Abstract
Creditors control access to consumer credit in two main ways. First, a lender can discriminate against a potential borrower if his or her income or other economic characteristics are not sufficient to secure the desired credit. Economists sometimes call this “rational discrimination.” For example, a creditor might view someone who is unemployed or who has never received a loan before as not creditworthy, because his or her ability to repay is suspect.1 The second type of credit discrimination is more ambiguous and is based on a number of what credit activists and legislative leaders call “invidious distinctions.” In such cases, a borrower suffers discrimination for reasons that have no direct bearing on his or her ability to repay.2 Until the mid-1970s in the United States, this type of discrimination plagued women who tried to secure credit on their own. These distinctions not only harmed the credit status of women, but also negatively impacted their economic rights and hindered the already flailing 1970s U.S. economy. Difficult to quantify, this type of gendered discrimination became the grounds for the struggle that American women pursued against an entrenched credit industry.
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Notes
For a discussion on the differences between these types of discrimination, see Charles W. Calomiris, Charles M. Kahn, and Stanley D. Longhofer, “Housing-Finance Intervention and Private Incentives: Helping Minorities and the Poor,” Federal Credit Allocation: Theory, Evidence, and History, special issue of Journal of Money, Credit and Banking 26, no. 3, pt. 2 (August 1994): 652–56.
“Invidious distinction” was terminology developed during the civil rights era to describe the types of discrimination that legislation could prevent; it was used both by civil rights activists and Congress. This usage differs from the “invidious distinction” outlined in Thorstein Veblen, The Theory of the Leisure Class: An Economic Study of Institutions (New York, 1912), 4–6, whose author uses the term to describe how consumption patterns play a role in distinguishing the working class from the leisure class.
For more on the issues surrounding economic citizenship that women experienced in the twentieth century, see Alice Kessler-Harris, In Pursuit of Equity: Women, Men, and the Quest for Economic Citizenship in 20th-Century America (New York, 2001).
There is much on the history of women in the twentieth-century United States, and many people who study that history find the wave metaphor useful. Very briefly, the first wave, near the start of the twentieth century, aimed to secure basic political and economic rights for women, such as voting and property ownership. The second wave, from the late 1960s to sometime in the 1980s, aimed to erase many of the differences between men and women—this was the time that the Equal Rights Amendment gained the most traction, for example. The third wave, starting in the late 1980s or early 1990s, aimed to celebrate women’s differences and diversity, while ensuring their equality to men. For more on the historiography of the women’s movement during the second two movements and the wave metaphor that describes it, see Linda K. Kerber, “Separate Spheres, Female Worlds, Woman’s Place: The Rhetoric of Women’s History,” Journal of American History 75, no. 1 (June 1988): 9–39;
Linda K. Kerber, Alice Kessler-Harris, and Kathryn Kish Sklar, “Introduction,” in U.S. History as Women’s History: New Feminist Essays, ed. Kerber, Kessler-Harris, and Sklar (Chapel Hill, NC, 1995);
and Sara Evans, Tidal Wave: How Women Changed America at Century’s End (New York, 2003).
For more on credit history, see Donncha Marron, Consumer Credit in the United States: A Sociological Perspective from the 19th Century to the Present (New York: 2009);
Lendol Calder, Financing the American Dream: A Cultural History of Consumer Credit (Princeton, NJ, 2001);
Louis Hyman, Debtor Nation: The History of America in Red Ink (Princeton, NJ, 2011). Note the more recent publication dates compared to the women’s history above.
Governor’s Task Force on Women and Credit State OHS, State Archive, box 312, folder 1. For more on baby letters, see Ira M. Millstein, Report of the National Commission on Consumer Finance: Consumer Credit in the United States (Washington, D.C., 1972). Credit legislation in the 1960s did not explicitly outlaw baby letters, but the main government lenders, the FHA and the VA, removed them from practice on their own in the early1970s following the NCCF report. Independent banks, though, continued to require these until the mid-1970s.
See Lizabeth Cohen, A Consumers’ Republic: The Politics of Mass Consumption in Postwar America (New York, 2003).
For the economic impact of these demographic changes at the macro level, see Jeremy Atack and Peter Passell, A New Economic View of American History, 2nd ed. (New York, 1994).
For the impact on workers, especially women workers, see Susan Porter Benson, Counter Cultures: Saleswomen, Managers, and Customers in American Department Stores (Urbana, IL, 1986);
Roy Rosenzweig, Eight Hours for What We Will: Workers and Leisure in an Industrial City (New York, 1983).
For the former, see Nan Enstad, Ladies of Labor, Girls of Adventure (New York, 1999);
and Kathy Peiss, Cheap Amusements: Working Women and Leisure in Turn-of-the-Century New York (Philadelphia, PA, 1986).
For the latter, see Maurine W. Greenwald, Women, War, and Work: The Impact of World War I on Women Workers in the United States (New York, 1990).
Joanne Meyerowitz, Not June Cleaver: Women and Gender in Postwar America, 1945–1960 (Philadelphia, PA, 1994).
Lawrence Bowdish, “Invidious Distinctions: Credit Discrimination against Women, 1960s-Present” (PhD diss., Ohio State University, 2010).
Ohio Governor’s Task Force on Women and Credit, OHS, State Archive, box 312, folders 1–3; Diane Poulton, She Supports Her Children, and Can’t Get a Loan or Buy a Car or even a House: Final Report of the Governor’s Task Force on Credit for Women (Columbus, OH, 1974).
Barbara A. Curran, Legislative Controls as a Response to Consumer-Credit Problems, 8 B.C.L. Rev. 409 (1967), http://lawdigitalcommons.bc.edu/bclr/vol8/iss3/2.
For more on information asymmetry in lending decisions, see Kam Hon Chu, “Free Banking and Information Asymmetry,” Journal of Money, Credit and Banking 31, no. 4 (November 1999): 748–62.
Leonor Sullivan, Hearings before the Subcommittee on Consumer Affairs of the Committee on Banking and Currency on H.R. 14856 and H.R. 14908 (Washington, D.C., 1974).
For a discussion of government policy on women’s rights and social values, see Cynthia Harrison, “Women, Gender, Values, and Public Policy,” in Democracy, Social Values, and Public Policy, ed. Milton M. Carrow, Robert Paul Churchill, and Joseph J. Cordes (Westport, CT, 1998): 147–62.
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Bowdish, L. (2012). American Women’s Struggle to End Credit Discrimination in the Twentieth Century. In: Logemann, J. (eds) The Development of Consumer Credit in Global Perspective: Business, Regulation, and Culture. Worlds of Consumption. Palgrave Macmillan, New York. https://doi.org/10.1057/9781137062079_6
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