The shrinking middle class and the widening gap between rich and poor threaten social and financial stability. Though sometimes identified as a problem of developing nations, the inability of the poor to obtain credit by using their de facto rights in property as collateral impedes upward mobility in nearly all countries, including the United States. Efforts to solve this problem have focused on trying to transform de facto rights into de jure title under property law. Those efforts have been unsuccessful because, among other reasons, property law is tightly bound to tradition and protecting vested ownership. This Article proposes an innovative but balanced approach to solving the credit problem. Credit is a commercial activity, and modern commercial law increasingly recognizes important policy goals and realities as a justification for overriding outmoded property-law limitations. Commercial law should recognize the importance of reducing the wealth gap as a justification for allowing the poor to use their de facto rights in property as collateral. That not only would help to empower the poor with credit but also would facilitate sustainable finance that attracts arm’s-length funding to supplement charitable and public resources.



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