Banker and Tradesman
Banks Can Leverage their Existing Infrastructure to Boost Equity
By Malia Lazu | Special to Banker & Tradesman | Nov 22, 2020
The median wealth of white families in America is 10 times higher than that of black families ($171,000 versus. $17,150) according to the Federal Reserve’s Survey of Consumer Finances. This wealth gap is not an outcome based on the failures of an individual or their community failures – minority markets have $3.9 trillion of spending power – but rather an outcome of 400 years of systemic exclusion. Wealth is created through ownership and most Americans begin the wealth generation by owning a home and/or small business. This disparity gap is not caused by a bug in our system but rather a prominent feature.
To provide some historical context, Freedman’s Bank was an institution created in 1865 to support the economic growth of newly freed people. The bank maintained 37 offices in 17 states and deposits peaked at $57 million; however it was all destroyed by the fraud perpetrated by a white board member who “approved” a large, unsecured loan that failed. The government declined to step in and all of the bank’s 70,000 depositors lost their money.