Redlining is the practice of denying, or charging more, for services like banking, insurance and healthcare to residents in particular areas. It’s a practice often determined by the racial make-up of the community. It’s deplorable, but also eminently sensible in the view of an unregulated capitalist, whose goal is to minimize risk, not promote equality. For a decade now hip-hop magnate Russell Simmons has been selling a prepaid debit card, the RushCard, and directly targeting young black people. According to his financial services company, UniRush, LLC, the RushCard is filling a niche: more than 68 million Americans who cannot (or choose not to) open a traditional banking account. With the help of the fifth largest bank in the US, The Bancorp Bank, and Visa (NYSE: V, $202), RushCard holders can easily accept direct deposit, write checks, and transfer money. You can pay as you go (charged per transaction) or pay a monthly fee of $8 or $10. Simmons’ company is so magnanimous that you can: “Direct Deposit your payroll to your RushCard and get access to your money up to 2 days sooner.” Umm, sooner than what? It works like this: you give this company your money, and then they let you spend it, minus the vigorish. Believe it or not things are tough enough out there that people are grateful for the service. Simmons says he started RushCard to “improve the financial well-being for (sic) millions of people.”
But there’s also a thing called “reverse redlining,” where instead of denying a high risk minority services, you target him but charge him more. Is that RushCard? Is it not viewed that way because so many people trust Simmons? He has created a reputation not only as an entrepreneur, but a philanthropist, too–backing animal rights, gay rights. He even showed his support of Occupy Wall Street by visiting protesters at Zuccotti Park–and this just months after publishing his book Super Rich: A Guide to Having It All. (Come to think of it, being a super-rich Occupy protester is having it all.) Perhaps receiving financial advice from Simmons isn’t as bad as getting it from rival Capital One’s TV spokesperson Alec Baldwin, another celebrity who visited OWS protestors in Zuccotti Park. Not as rich as Simmons, Baldwin was nevertheless put on the defensive. Soon after his OWS visit, he tweeted that he donated all his fees from the Capital One commercials to arts charities. Simmons’ take of RushCard revenues aren’t so transparently revealed.
