National Bankers Association announces new initiative
The National Bankers Association (NBA) announced 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 (MDIs) and the communities they serve.
“As US attention focuses 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 businesses and policy makers to capitalize, modernize and strengthen minority banks. “
To support its member banks in this challenge, the NBA is launching the Alliance with a four-pillar framework:
1. Financial well-being – providing innovative programs, training and financial services to traditionally excluded and underserved households to support asset accumulation and sustainability.
2. Technical assistance – providing training for small businesses and entrepreneurship that builds the capacity of underserved communities to deliver business products and services to increase participation in mainstream economic life.
3. Impact Research and Assessment – Leverage market-level social and economic impact data to identify root causes of racial economic disparities, identify market opportunities, and inform the development of responsive products and services.
4. Capital Aggregation and Collaboration – creating collaborative capital approaches that harness the power of the MDI banking community to collectively support large-scale, high-impact, mission-aligned projects benefiting underserved communities, advancing efficiency operational thanks to shared resources.
The Alliance will work with minority-owned banks to provide their communities with:
Local impact dashboards highlighting opportunities in underserved communities
Education and resources on financial well-being
Culturally competent technical assistance
Training and resources on entrepreneurship and first-time home buying
Access to capital and innovative programs to acquire and develop assets
“The COVID-19 pandemic has widened the racial wealth gap between minority communities,” said Dominic Ng, chief executive officer 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 in bridging this gap. The East West Bank Foundation is proud to be a founding member providing seed funding to help launch this effort.
A 2019 FDIC survey of consumer finances showed that white families have the highest level of median and average family wealth: $ 188,200 and $ 983,400, respectively. The median and average wealth of black and Hispanic families is less than 15% of that of white families, at $ 24,100 and $ 142,500, respectively.
Millions of black and brown families do not have bank accounts or do not have access to traditional financial services. Minority banks are at the center of wealth creation in these communities. They are major providers of mortgages and small business loans when black customers have been turned down twice as fast as whites by traditional banks.
For Asian Americans, the myth of the model minority perpetuates the misconception that all Asians are fine. Income inequality in the United States is highest among Asian Americans, according to a Pew Research Center study published in 2019.
“You can’t close the racial wealth gap without minority banks,” adds Elam, CEO of the NBA. In addition to the East West Bank Foundation and other NBA member banks, the Alliance received initial support from the JPMorgan Chase Foundation, the Milken Institute, Confluence Philanthropy and Robinhood.
“We are living in unprecedented times when the risk of wealth destruction from COVID-19 and the possibility of raising capital for underserved communities are both great. All stakeholders have a role to play and the National Bankers Community Alliance will be a key intermediary, ”said Aron Betru, senior advisor at the Milken Institute.
“At Robinhood, democratizing finance is at the heart of everything we do,” said Baiju Bhatt, Creative Director and Co-Founder of Robinhood. “Access to financial services should not be a privilege, it should be accessible and affordable for everyone. That’s why we’re committed to supporting organizations that help reduce barriers to entry and drive change. We are proud to be one of the first sponsors of this initiative and look forward to working with the National Bankers Association to help close 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 has today expanded its membership to include Hispanic, Asian American, Native American, and female-owned banks.