0:00:00.708,0:00:03.250 As last recorded[br]by the US Federal Government, 0:00:03.292,0:00:09.226 the median wealth for a white family[br]in the United States was 171,000 dollars 0:00:09.250,0:00:13.684 and the median wealth for a Black family[br]was just 17,000 dollars, 0:00:13.708,0:00:18.893 a 10x different over 150 years[br]after the end of slavery. 0:00:18.917,0:00:21.851 I think first we have to ask ourselves,[br]what is wealth really? 0:00:21.875,0:00:25.059 Well, wealth is all of your assets,[br]all of the things that you own, 0:00:25.083,0:00:26.601 minus all of your liabilities. 0:00:26.625,0:00:29.934 Assets are things like your car,[br]your house, your savings account, 0:00:29.958,0:00:33.625 your checking account, your investments,[br]if you own other properties, 0:00:34.750,0:00:36.643 your business. 0:00:36.667,0:00:39.768 Well, that gap, that 10x gap, 0:00:39.792,0:00:43.018 is partially because for many years, 0:00:43.042,0:00:44.351 decades in fact, 0:00:44.375,0:00:46.518 Black Americans[br]were left off of that ladder 0:00:46.542,0:00:48.601 and didn't really have access to it. 0:00:48.625,0:00:51.018 Well, why are we talking about this now? 0:00:51.042,0:00:55.976 Well, in 2020, in the midst of[br]a global pandemic and a looming recession, 0:00:56.000,0:00:57.559 inequities are really laid bare 0:00:57.583,0:01:00.559 across nearly every system[br]in the United States: 0:01:00.583,0:01:05.018 health care, education,[br]criminal justice and finance, 0:01:05.042,0:01:09.184 and people were moved[br]to take action online, in streets, 0:01:09.208,0:01:11.851 in meetings at work,[br]in corporate boardrooms. 0:01:11.875,0:01:15.226 And I, as a consultant, started[br]having conversations with clients 0:01:15.250,0:01:16.958 that I thought I would never have. 0:01:17.917,0:01:20.434 I guess the question[br]that I'd been asking myself is, 0:01:20.458,0:01:24.101 how do we make sure that in this moment,[br]this results in action and progress 0:01:24.125,0:01:28.351 that starts to close that wealth gap[br]for Black versus white Americans? 0:01:28.375,0:01:29.684 So who am I? 0:01:29.708,0:01:31.268 My name is Kedra Newsom Reeves. 0:01:31.292,0:01:33.476 I am a consultant[br]for banking institutions, 0:01:33.500,0:01:35.768 hedge funds, asset managers. 0:01:35.792,0:01:37.184 But before any of that, 0:01:37.208,0:01:40.684 I am a Black American[br]who is the descendant of slaves. 0:01:40.708,0:01:42.601 And when we talk about the wealth gap, 0:01:42.625,0:01:44.934 it's really important[br]to understand the history, 0:01:44.958,0:01:47.934 so I thought I'd tell a little story[br]about a family, my family, 0:01:47.958,0:01:50.768 and how policy intersects with wealth. 0:01:50.792,0:01:53.184 So we'll start with[br]my great-great-grandfather. 0:01:53.208,0:01:54.934 He was a man named Silas Newsom, 0:01:54.958,0:01:58.268 and Silas was born a slave[br]outside Nashville, Tennessee, 0:01:58.292,0:01:59.684 on Newsom Station, 0:01:59.708,0:02:02.476 where he and his family[br]worked on a quarry. 0:02:02.500,0:02:03.809 He didn't own anything. 0:02:03.833,0:02:06.684 He didn't own his home.[br]He didn't own property. 0:02:06.708,0:02:08.726 He didn't really even own his own body, 0:02:08.750,0:02:10.476 his own labor, his children. 0:02:10.500,0:02:12.851 Any of those things, all of those things, 0:02:12.875,0:02:16.101 were here to create wealth[br]for someone else. 0:02:16.125,0:02:18.809 So we believe that he was a servant 0:02:18.833,0:02:21.893 during the Civil War[br]for a Confederate general 0:02:21.917,0:02:24.184 who was actually fighting[br]to keep him enslaved, 0:02:24.208,0:02:27.083 so he really had no wealth,[br]he had no control over his life. 0:02:27.958,0:02:31.393 Well, at the end of slavery,[br]there was a policy opportunity. 0:02:31.417,0:02:33.059 There was a question: 0:02:33.083,0:02:36.351 what do we do for[br]the hundreds of years of slavery 0:02:36.375,0:02:39.726 now that we are ending slavery[br]and the country is coming together? 0:02:39.750,0:02:41.059 And there was a choice. 0:02:41.083,0:02:43.143 We could make a settlement[br]with the slaves, 0:02:43.167,0:02:45.684 or we could make a settlement[br]with the slave owners. 0:02:45.708,0:02:49.851 Well, the slaves had no power[br]to advocate for themselves in that moment, 0:02:49.875,0:02:51.518 and the country had to be united, 0:02:51.542,0:02:56.309 so the federal government decided[br]to give that settlement to slave owners, 0:02:56.333,0:03:01.184 essentially giving them money[br]for the property that they had lost 0:03:01.208,0:03:02.518 at the end of the war. 0:03:02.542,0:03:06.268 And not their physical property,[br]not their homes, but people, 0:03:06.292,0:03:10.851 the slaves that had provided[br]free labor for years and decades. 0:03:10.875,0:03:13.601 So Silas, at the end of the Civil War, 0:03:13.625,0:03:14.934 had no wealth. 0:03:14.958,0:03:17.643 He was free but had no wealth. 0:03:17.667,0:03:18.934 He became a sharecropper. 0:03:18.958,0:03:20.809 My great-grandfather Silas was born 0:03:20.833,0:03:22.893 a number of years[br]after the end of slavery, 0:03:22.917,0:03:24.976 and he was drafted to serve in World War I 0:03:25.000,0:03:28.351 along with 350,000[br]other Black American soldiers 0:03:28.375,0:03:30.101 in segregated units. 0:03:30.125,0:03:31.393 He served in the war. 0:03:31.417,0:03:33.476 When he came back to the United States, 0:03:33.500,0:03:36.726 at the end of the war,[br]there was very anti-Black sentiment. 0:03:36.750,0:03:39.726 The economy was compressing,[br]there were a lot of stressors, 0:03:39.750,0:03:45.393 and Black people could not get land,[br]they could not get loans for homes, 0:03:45.417,0:03:49.434 they really could not acquire any credit[br]to build wealth over time, 0:03:49.458,0:03:52.101 so he also became a farmer. 0:03:52.125,0:03:54.934 And he had a son, also named Silas -- 0:03:54.958,0:03:57.184 there are a lot of Silases in my family -- 0:03:57.208,0:03:58.518 my grandfather. 0:03:58.542,0:04:02.125 My grandfather Silas was also a soldier[br]and fought in World War II. 0:04:02.917,0:04:04.434 After World War II, 0:04:04.458,0:04:06.934 the US Federal Government[br]passed the GI Bill, 0:04:06.958,0:04:08.851 which provided support for veterans. 0:04:08.875,0:04:11.476 And the bill provided[br]for building of hospitals, 0:04:11.500,0:04:12.809 student loans 0:04:12.833,0:04:19.143 and, most importantly for wealth-building,[br]low-interest home mortgages for veterans. 0:04:19.167,0:04:21.268 In the years following the war, 0:04:21.292,0:04:25.184 the GI Bill accounted for[br]four billion dollars of funding 0:04:25.208,0:04:27.434 to nine million veterans. 0:04:27.458,0:04:30.000 But Black veterans[br]largely did not benefit. 0:04:31.125,0:04:34.893 So Silas, my grandfather,[br]came back to Nashville, Tennessee, 0:04:34.917,0:04:37.976 and he married my grandmother,[br]whose name is Cinderella. 0:04:38.000,0:04:40.268 Yes, my grandmother's name was Cinderella. 0:04:40.292,0:04:42.684 And they had eight children. 0:04:42.708,0:04:44.393 But they never bought a home. 0:04:44.417,0:04:46.476 And the highlight of their housing journey 0:04:46.500,0:04:48.976 was moving into[br]a new public housing project 0:04:49.000,0:04:50.518 with their children 0:04:50.542,0:04:52.559 and paying rent for that housing project, 0:04:52.583,0:04:57.351 which in terms of the quality of housing[br]was fantastic for them and a step up, 0:04:57.375,0:04:59.583 but did not allow them to build wealth. 0:05:00.375,0:05:02.309 My father, another soldier, 0:05:02.333,0:05:04.559 a 20-year veteran[br]of the United States Marines, 0:05:04.583,0:05:06.934 bought his first home in his early 50s, 0:05:06.958,0:05:12.226 but it took four generations[br]for our family to move into homeownership 0:05:12.250,0:05:16.042 and begin to build ownership[br]and equity in a home. 0:05:17.333,0:05:20.434 That's one family's story,[br]and I skipped a lot of things 0:05:20.458,0:05:23.934 that happened between[br]the end of slavery and today: 0:05:23.958,0:05:28.893 redlining, housing discrimination[br]before the Fair Housing Act in the 1970s, 0:05:28.917,0:05:31.559 the really important role[br]that Black-owned banks played 0:05:31.583,0:05:33.167 in building Black communities, 0:05:34.250,0:05:36.518 the Savings and Loan Crisis of the 1980s, 0:05:36.542,0:05:38.643 which crushed a lot of Black banks, 0:05:38.667,0:05:40.976 and the subprime crisis in 2008, 0:05:41.000,0:05:45.226 which stripped a lot of Black[br]and brown homeowners of their homes. 0:05:45.250,0:05:46.809 There's a lot of history there, 0:05:46.833,0:05:50.726 but that story tells you a bit[br]about how we get to this 10x gap 0:05:50.750,0:05:52.333 where we are today. 0:05:53.333,0:05:56.643 Now, certainly, as we think[br]about the size of that gap, 0:05:56.667,0:06:01.500 it is critical for the Federal Government[br]to take a number of actions. 0:06:02.250,0:06:05.434 That said, financial institutions[br]play a really important role 0:06:05.458,0:06:09.226 in providing access to credit,[br]access to capital, 0:06:09.250,0:06:10.934 to build communities 0:06:10.958,0:06:13.083 and allow Black communities to thrive. 0:06:14.208,0:06:16.351 We have to be clear; 0:06:16.375,0:06:20.726 managing 17,000 dollars better[br]does not get us there. 0:06:20.750,0:06:23.768 Better education does not get us there. 0:06:23.792,0:06:27.268 Access to credit and capital are critical. 0:06:27.292,0:06:29.518 So I want to talk[br]about four solutions today 0:06:29.542,0:06:33.625 that financial institutions can contribute[br]to start to close the wealth gap. 0:06:34.667,0:06:37.934 Number one is getting[br]more people on the ladder, 0:06:37.958,0:06:39.333 getting more people banked. 0:06:40.792,0:06:43.268 We know today that[br]about half of Black Americans 0:06:43.292,0:06:45.351 are un- or underbanked. 0:06:45.375,0:06:47.976 Unbanked means that[br]you don't have a banking account. 0:06:47.999,0:06:50.767 Underbanked means[br]that you have a bank account 0:06:50.792,0:06:55.726 but you use alternative services[br]for check-cashing or payday lending 0:06:55.750,0:06:57.393 or paying bills. 0:06:57.417,0:07:00.309 And that's not just expensive[br]from a transaction perspective 0:07:00.333,0:07:02.018 in terms of the fees that you pay, 0:07:02.042,0:07:05.851 it's also expensive in terms of the time[br]that you commit to paying a bill. 0:07:05.875,0:07:08.809 Think about how you pay[br]your utility bill today. 0:07:08.833,0:07:11.059 It probably comes[br]out of your checking account. 0:07:11.083,0:07:12.559 You don't even think about it. 0:07:12.583,0:07:14.726 You set it up in advance,[br]and it's automatic. 0:07:14.750,0:07:16.018 Well, if you're unbanked, 0:07:16.042,0:07:18.601 you are probably going[br]to get a money order somewhere, 0:07:18.625,0:07:20.351 physically, a piece of paper. 0:07:20.375,0:07:23.434 You then travel to City Hall or your DMV 0:07:23.458,0:07:24.726 to pay that bill. 0:07:24.750,0:07:27.518 About 40 percent of people[br]who are unbanked 0:07:27.542,0:07:31.601 say they are unbanked because they think[br]they don't have the minimum amount 0:07:31.625,0:07:34.143 to really maintain a checking account. 0:07:34.167,0:07:35.726 Well, that's just not true. 0:07:35.750,0:07:37.226 In the last several years, 0:07:37.250,0:07:40.393 credit unions, community banks[br]and major banking institutions 0:07:40.417,0:07:45.351 have created low-cost, no-minimum[br]checking and savings account products 0:07:45.375,0:07:48.559 specifically made for this population. 0:07:48.583,0:07:51.184 So we have an issue with awareness. 0:07:51.208,0:07:53.893 Banks, community partners and others 0:07:53.917,0:07:57.059 have to work together to increase[br]the awareness of these products 0:07:57.083,0:07:58.934 in communities that need them, 0:07:58.958,0:08:01.434 so that we can start to reduce[br]the number of people 0:08:01.458,0:08:02.809 who are un- and underbanked 0:08:02.833,0:08:05.643 and get them on the ladder[br]that we talked about earlier. 0:08:05.667,0:08:08.726 The challenge is about 28 percent[br]of Black and Latinx families 0:08:08.750,0:08:10.143 are credit-invisible, 0:08:10.167,0:08:14.143 which means that you have[br]a thin credit file or no credit file. 0:08:14.167,0:08:17.351 And the way that credit works[br]and creditworthiness assessments work 0:08:17.375,0:08:19.601 is to say, if you can prove 0:08:19.625,0:08:22.684 that you have paid credit back[br]consistently previously, 0:08:22.708,0:08:24.309 then I can lend you more credit. 0:08:24.333,0:08:27.018 It's kind of a chicken[br]or an egg situation. 0:08:27.042,0:08:30.559 The interesting thing is that banks[br]and financial technology companies 0:08:30.583,0:08:33.851 have really innovated in recent years[br]to use alternative data -- 0:08:33.875,0:08:35.851 cable bills, 0:08:35.875,0:08:37.434 utility bills, 0:08:37.458,0:08:39.309 rent payments, etc. -- 0:08:39.333,0:08:42.458 to show that you're able[br]to consistently make payments. 0:08:44.417,0:08:47.226 The additional challenge on this one,[br]unlike the last one, 0:08:47.250,0:08:48.976 which was more about awareness, 0:08:49.000,0:08:53.726 is that you need to have[br]regulatory support to do these things. 0:08:53.750,0:08:55.309 You need to prove to regulators 0:08:55.333,0:08:57.976 that you are able[br]to fairly use alternative data 0:08:58.000,0:09:01.184 to lend credit to marginalized groups. 0:09:01.208,0:09:03.768 What we need to see is,[br]from the Federal Government 0:09:03.792,0:09:05.101 and the banking industry, 0:09:05.125,0:09:07.726 to come together[br]to create innovation sandboxes 0:09:07.750,0:09:10.917 to start to use alternative data[br]to expand to marginalized groups. 0:09:12.042,0:09:14.018 Well, what about communities? 0:09:14.042,0:09:16.601 Without community wealth, 0:09:16.625,0:09:18.976 individual wealth, in a way,[br]is on an island. 0:09:19.000,0:09:21.893 And if you go into most[br]major cities in the United States 0:09:21.917,0:09:24.059 to most communities of color, 0:09:24.083,0:09:27.184 what you'll find[br]is underinvested communities. 0:09:27.208,0:09:30.476 For every economic crisis,[br]these communities have suffered severely. 0:09:30.500,0:09:33.518 For every economic boom,[br]they have not benefited. 0:09:33.542,0:09:36.893 And so what we're seeing[br]in a number of cities across the country, 0:09:36.917,0:09:38.976 and I'll use Chicago as an example, 0:09:39.000,0:09:41.726 is the partnerships occurring 0:09:41.750,0:09:44.684 between banking institutions, 0:09:44.708,0:09:46.393 philanthropists, 0:09:46.417,0:09:48.059 the city and community leaders 0:09:48.083,0:09:50.893 to invest hundreds of millions of dollars 0:09:50.917,0:09:52.934 to build community resources 0:09:52.958,0:09:56.226 and communities that have[br]historically been disinvested. 0:09:56.250,0:09:58.518 Lastly, we've got to talk about business, 0:09:58.542,0:10:01.309 and not just small businesses. 0:10:01.333,0:10:05.351 Now, when you have individual stability[br]and a banking institution, 0:10:05.375,0:10:08.559 and you have access to credit,[br]and when you have community wealth, 0:10:08.583,0:10:11.833 those are all fantastic things,[br]but we need also job creation. 0:10:12.542,0:10:14.851 Take all of the new tech companies, 0:10:14.875,0:10:18.309 and I say "new" because now[br]they're not so new, 0:10:18.333,0:10:20.351 but take Facebook, Google, Amazon. 0:10:20.375,0:10:23.768 At some point, all of those companies[br]were sole proprietorships 0:10:23.792,0:10:25.601 with one employee 0:10:25.625,0:10:26.934 or a few employees 0:10:26.958,0:10:29.833 that were building a technology[br]that was not yet proven. 0:10:30.667,0:10:34.018 What those companies received early on 0:10:34.042,0:10:36.768 was venture capital money. 0:10:36.792,0:10:38.851 And when you look[br]at venture capital today, 0:10:38.875,0:10:42.684 only one percent of venture capital funds[br]go to Black founders. 0:10:42.708,0:10:45.768 So if Black entrepreneurs[br]are largely shut out of those networks 0:10:45.792,0:10:47.101 they're not able to grow, 0:10:47.125,0:10:49.393 and the only way for that to change 0:10:49.417,0:10:52.268 is from within the industry itself. 0:10:52.292,0:10:56.309 In this generation, we must not only[br]be talking about thriving businesses 0:10:56.333,0:10:57.934 in Black communities. 0:10:57.958,0:11:01.601 We must also be talking[br]about seeing more Black-owned 0:11:01.625,0:11:04.000 and founded businesses going public. 0:11:05.417,0:11:06.934 Those are just four solutions. 0:11:06.958,0:11:09.476 There's many other things[br]that can and should be done 0:11:09.500,0:11:11.226 to close the wealth gap. 0:11:11.250,0:11:12.893 This gap is not new. 0:11:12.917,0:11:19.101 It was born and perpetuated[br]by federal policy, social constructs 0:11:19.125,0:11:20.768 and business practice over time, 0:11:20.792,0:11:23.393 and all of those things need to change 0:11:23.417,0:11:25.268 to start to close the gap. 0:11:25.292,0:11:27.809 Financial institutions[br]play a really critical role 0:11:27.833,0:11:30.101 at the individual level,[br]at the community level 0:11:30.125,0:11:31.476 and at the business level. 0:11:31.500,0:11:34.684 It's important to our families,[br]it's important to our communities 0:11:34.708,0:11:37.268 and it's important to our economy. 0:11:37.292,0:11:40.184 Instead of talking about[br]how the gap continues to grow, 0:11:40.208,0:11:42.476 let's begin to close the gap now. 0:11:42.500,0:11:44.000 Thank you.