Eliminating the racial wealth gap starts with financial literacy and equitable access to capital and financial services
WASHINGTON, D.C. (September 13, 2021) – The National Bankers Association (NBA) today announces a new initiative to close the racial wealth gap in America. The National Bankers Community Alliance (Alliance) is a 501(c)(3) nonprofit affiliate of the NBA that will provide programs and services to support Minority Depository Institutions (MDI) and the communities they serve.
“With America’s attention focused on equity and inclusion, we want to drive long-term systemic change and impact policy,” says Nicole Elam, president and CEO of the NBA. “We want to work with corporations and policymakers to capitalize, modernize and strengthen minority banks.”
To support its member banks with this challenge, the NBA launches the Alliance with a Four Pillar framework:
1. Financial Wellness - delivering innovative financial programs, training and services to traditionally excluded and underserved households to support asset accumulation and sustainability.
2.Technical Assistance – delivering small business and entrepreneurial training that builds the capacity of underserved communities to bring business products and services to increase participation in the economic mainstream.
3.Research & Impact Assessment – leveraging market-level social and economic impact data to identify the root causes of racial economic disparities, identify market opportunities and inform the development of responsive products and services.
4. Capital Aggregation & Collaboration – creating collaborative capital approaches that harness the power of the MDI banking community to collectively support mission-aligned large-scale, high-impact projects benefitting underserved communities, advancing operational efficiencies through shared resources.
The Alliance will work with minority-owned banks to provide their communities with:
· local impact scorecards highlighting opportunities in underserved communities
· financial wellness education and resources
· culturally-competent technical assistance
· entrepreneurial and first-time homebuyer training and resources
· access to innovative capital and programs to acquire and grow assets
“The COVID-19 pandemic has increased the racial wealth gap among minority communities,” said Dominic Ng, Chairman and CEO of NBA member East West Bank. “Now is the time for our communities to come together to support the formation of the National Bankers Community Alliance and its critical work to narrow this gap. The East West Bank Foundation is proud to be a founding member providing the seed funding to help launch this effort.”
A 2019 FDIC Survey of Consumer Finances showed that White families have the highest level of both median and mean family wealth: $188,200 and $983,400, respectively. Black and Hispanic families’ median and mean wealth is less than 15 percent that of White families, at $24,100 and $142,500, respectively.
Millions of Black and Brown families do not have a bank account or access to mainstream financial services. Minority banks are at the center of wealth creation in these communities. They are significant providers of mortgages and small business loans when Black customers have been rejected at twice the rate of Whites by traditional banks.
For Asian Americans, the model minority myth perpetuates the misconception that all Asians are doing well. According to a Pew Research Center study published in 2019, income inequality in the U.S. is greatest among Asian Americans.
“You can’t close the racial wealth gap without minority banks,” adds NBA CEO Elam. In addition to the East West Bank Foundation and other NBA member banks, the Alliance has received initial support from The JPMorgan Chase Foundation, Milken Institute, Confluence Philanthropy, and Robinhood.
“We are in unprecedented times when the risk of wealth destruction due to COVID-19 and the opportunity to mobilize capital for underserved communities are both great. All stakeholders have a role to play and the National Bankers Community Alliance will be a vital conduit,” said Aron Betru, senior advisor at Milken Institute.
"At Robinhood, democratizing finance is core to everything we do,” said Robinhood Chief Creative Officer and Co-Founder Baiju Bhatt. “Access to financial services should not be a privilege, and it should be accessible and affordable for everyone. That is why we are committed to supporting organizations that help lower the barriers to entry and drive change. We are proud to be an inaugural sponsor of this initiative and look forward to working with the National Bankers Association in support of closing the racial wealth gap.”
To learn more or to donate to the Alliance, visit nationalbankers.org/alliance.
About The National Bankers Association
Founded in 1927 as the National Negro Bankers Association, the National Bankers Association today has expanded its membership to include Hispanic American, Asian American, Native American and women – owned banks. Recognized as the voice of minority banking in America, the NBA’s mission is to create an inclusive financial services industry and a vibrant business environment for minority financial institutions, their customers and the communities they serve. Member banks are located in twenty-two states and the District of Columbia. For more information, please visit NationalBankers.org.