Sep 13, 2021
Eliminating the racial wealth gap starts with financial literacy and equitable access to capital and financial services
WASHINGTON, D. C. – 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:
Financial Wellness – delivering innovative financial programs, training and services to traditionally excluded and underserved households to support asset accumulation and sustainability.
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.
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.
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.“