‘There is still work to be done to create equity for underserved communities of color’
Viewpoints: As the voice for Black-owned banking institutions, the National Bankers Association works to create financial programs and policies that benefit all Americans, writes Kenneth Kelly, chairman and CEO of First Independence Bank.
Our monthly Viewpoints series invites guest authors from outside of Wells Fargo to share an important perspective related to their work. Today, we welcome Kenneth Kelly, chairman and CEO of First Independence Bank. Kelly is also a board member and former chairman of the National Bankers Association.
Over the course of my tenure (2018-2020) as chairman of the National Bankers Association, or NBA, my focus was on three critical areas — regulatory agencies, executive and legislative branches, and the banking industry. The overarching goal was to advocate for minority banking institutions across the United States, where, currently, there are fewer than 150 such financial organizations.
During the past two years, I have seen firsthand how a movement, which takes many steps, is still often defined by the moments of the movement. But before I get to those details, I want to reflect on the history of Black banks, engage in the topics of today, and discuss the future for minority banking.
Any appropriate approach to Black History Month in a capitalistic society requires reflection of our ancestors’ work, vision, and fortitude — all of which were necessary to establish minority financial institutions. While it is easy to assess what was required of minorities in an often-segregated business environment, it is shortsighted to assume that the business environment was simple when the leaders in Black America were often misrepresented or denied fair and equitable access to banking resources, business services, and even employment opportunities. The outcomes of these inequities and inequalities affected education, home values, job creation, and the economic well-being of a community of people. We see the results in the gaps in income, homeownership, and net-worth even today. Furthermore, we have seen how these disparities manifest themselves even in health care.
As I think about the current movement to create equity, another moment in time comes to mind. It was at our National Banker’s Annual Conference in October 2019, where I had a discussion with leaders from Wells Fargo — including Sanders Adu, senior vice president of Federal Government Relations, and Gigi Dixon, head of Diverse Segments, Representation & Inclusion External Engagement — about the need for injecting capital into minority institutions.
By early March 2020, Wells Fargo had agreed to provide up to $50 million for Black banks upon reviewing the disparities in capital across a segment of many institutions. This took place before we really knew the extent of COVID-19 and before the killing of George Floyd in May that sparked worldwide protests for social and economic justice.
Ironically, the birth of Black-owned banking institutions was often established on this very premise — equity. For example, First Independence Bank was established just over 50 years ago (in 1970) by nearly two dozen prominent African American business and community leaders who pooled their financial resources together after the infamous 1967 rebellion in Detroit caused by a police raid on an African American establishment.
Today, the COVID-19 pandemic has caused an unprecedented number of changes not only for the banking industry, but for individuals and families who suffered reduced hours or unemployment. What is most notable is that those who are less fortunate often share an unprecedented amount of the burden. The government’s programs to sustain the economy are noble, but do not have a proportional impact across all sectors in the economy.
There is still work to be done to create equity for underserved communities of color, starting with ensuring financial programs and policies work for all Americans.
On the economic and social side, we have seen a strong shift toward equity inclusion. Many corporations have made statements, but few have taken substantial actions to manifest those statements. Regardless, we know that economic development manifests the best results when it requires public and private partnership and collaboration.
“We know that economic development manifests the best results when it requires public and private partnership and collaboration.”
The great news is that the stimulus bill from December 2020 contained provisions that provide access to capital for institutions that help underserved communities. This stimulus program, along with some of the available capital from the private sector, will sustain the near-term efforts in minority banking. However, it will take the collective will of this readership and all who are interested in equity to remain vigilant to reach our noble goals.
Wells Fargo is working with minority depository institutions to help financially empower Black communities.
Regarding the future, I am very optimistic that it is bright. While all worthy things require persistent effort, the future of minority banking with partners like Wells Fargo, along with many others, is the right path forward. This effort will require a lot of moments to become a defined movement. Moments can come from being ahead of the need, for example, like how Wells Fargo set up a facility for minority depository institutions, or MDIs, when it was not clear that these organizations could get liquidity of their Payment Protection Program loans.
Each of us can take steps to drive our corporations toward inclusivity, which will yield a more perfect union. Just as most movements are defined by moments, I hope in the history of Wells Fargo it is noted that the leadership took actions that were a part of this movement in late 2019, throughout 2020, and beyond.