In 2007, a group of fiscally wise hip hop artists, including Slim Thug and Bun B, toured the nation.  Rather than performing their latest hit songs, they spit some financial advice to young African-American and Hispanic fans.  Tales of personal economic woe, illustrated by anecdotes concerning unwise purchases and the pain of debt, brought a much needed sense of humanity to their lessons on financial responsibility.  While these artists encouraged their audience to develop a critical financial literacy, they also turned their critical eyes upon themselves, discussing how some hip hop artists–at least on the surface–seem to endorse a fiscally irresponsible lifestyle.

Previously, in 2005, rapper Eminem and hip hop mogul Russell Simmons launched the first “Hip Hop Summit on Financial Empowerment National Tour,” which featured financial expert Suze Orman and the Vice President of Crystler Financial, William F. Jones, Jr.  Like the 2007 tour, its precursor featured politically conscious hip hop artists like Reverend Run of Run DMC, Common, and MC Serch.

However, the history of the convergence of hip hop and finance is not solely made up of green and glowing moments.

Simmons made his first foray into the world of global finances in 2003, joining CIncinnati-based debt-and-loan-buyer Unifund Corporation in order to launch a debit/credit-card operation.  This new card would be

offered to people who could not obtain credit-cards and/or loans from most money-lending institutions because of their poor credit scores.  Hoping to give the debit-cards to over 48 million consumers, of whom were mostly disadvantaged Hispanics and African-Americans, Simmons and Unifund launched the “Visa Rush Card,” which would cost $19.95, plus $1.00 per transaction.

“Everything that we do comes from hip-hop culture, which is the expression of people who are struggling,” he said in an interview, speaking with the distinctive cadence of a man who sees poetry woven into daily life. “I’m doing something the banks should have done. The banks looked at the people in the face and did not see enough money in their eyes to pay attention to them.”

– An Ad for the Rush Card, quoting Russell Simmons

Although the “prepaid” card’s advertisements highlight how the card can be used to limit spending, the card not only comes with a variety of service fees, but also pulls users’ into greater debt by hiding its high overdraft and late fees. For a relatively small sample of the complaints of unhappy customers, just take a look at this Rush Card message board.

“RUSH CARD IS FULL OF (BULL s***). RUSSELL SIMMONS OLD WRINKLE UP a** NEED TO BE A SHAME OF HIS SELF. TALKIN ABOUT HE IS TRYING TO HELP OUT. ALL THEY DOING IS TAKING AN DOLLAR EVERY TRANSACTION, THAT IS MADE FROM THAT ACCT AND $1.95 FOR WITHDRAWL FEE ON TOP OF THE BANK FEE’S. IT IS AN BIG SCAM. IN THE OPERATOR DON’T KNOW WHAT THE f*** THEY ARE TAKING ABOUT. THEY DON’T SPEAK ENGLISH AND HAVE THE NERVE TO HANG UP YOU, BECAUSE YOU CAN’T UNDERSTAND WHAT THEY ARE TAKING ABOUT.”

– Lynett, from Florida, on August 20, 2008

“IF U VALUE YOUR MONEY “DON’T” f*** WITH THE RUSHCARD..AUGUST 1, THE WHOLE NETWORK WENT DOWN AND EVERY TIME I USED MY RUSHCARD IT DECLINED ME….BUT IT STILL TOOK THE CASH OUT OF MY BALANCE…AND EVERYTIME…I TRYED TO CALL CUSTOMER SERVICE “ALL CIRCUITS ARE BUSY NOW” FROM FRIDAY MORNING UP UNTIL 10 PM……THEY R REALLY TERRIBLE…………RUSSELL SIMMONS SHOULD NOT MAKE US PAY HIS ALAMONY AND CHILD SUPPORT 2 THAT ASAIN BROAD…………”

– Scottie, from Georgia, on August 2, 2008

While the many credit card users who could not make good on their spending played a role in generating the current financial crisis, corporations and moguls like Unifund and Simmons also set the stage for the fallout by offering a “safe” means of spending money and—to make matters worse—dragging their most disadvantaged customers down the abyss of debt with them. Simmons’s intentions might have been good, but his credit card—and the institutions that offered, bought, and sold sub-prime loans, opted to put profit over people, and short-term earnings over long-term success. Although Simmons might have wanted to help out fellow African-Americans–and fellow African-Americans and Hispanics might have wanted to help out Simmons, Simmons, however inadvertently, assumed the role of the oppressor, not the redeemer.  He did not consider how institutions like Unifund, which exploit economically disadvantaged folk by offering them loans with excessive interest rates, bolster the structurally racist economy of the U.S. and, perhaps, the globe.

Structurally racist economy?  Yes. If Simmons and Unifund truly wanted to help people, they could have gone to the root of the problem: the barriers that prevent–and continue to prevent–disadvantaged folk from gaining assets, wealth, and a home (that is, a home that increases in value rather than decreases).  Instead, they exacerbated and reproduced the problem.

So what’s the radical solution?  Well, many people have come up with some ideas, and we’ll talk about those on Friday.

Please share any experiences that you might have had with the “Rush Card” or similar operations.  And if anyone has been to one of these hip hop financial summits, please discuss the affect that they have had on your financial decisions.