1
00:00:00,708 --> 00:00:03,250
As last recorded
by the US Federal Government,

2
00:00:03,292 --> 00:00:09,226
the median wealth for a white family
in the United States was 171,000 dollars

3
00:00:09,250 --> 00:00:13,684
and the median wealth for a Black family
was just 17,000 dollars,

4
00:00:13,708 --> 00:00:18,893
a 10x different over 150 years
after the end of slavery.

5
00:00:18,917 --> 00:00:21,851
I think first we have to ask ourselves,
what is wealth really?

6
00:00:21,875 --> 00:00:25,059
Well, wealth is all of your assets,
all of the things that you own,

7
00:00:25,083 --> 00:00:26,601
minus all of your liabilities.

8
00:00:26,625 --> 00:00:29,934
Assets are things like your car,
your house, your savings account,

9
00:00:29,958 --> 00:00:33,625
your checking account, your investments,
if you own other properties,

10
00:00:34,750 --> 00:00:36,643
your business.

11
00:00:36,667 --> 00:00:39,768
Well, that gap, that 10x gap,

12
00:00:39,792 --> 00:00:43,018
is partially because for many years,

13
00:00:43,042 --> 00:00:44,351
decades in fact,

14
00:00:44,375 --> 00:00:46,518
Black Americans
were left off of that ladder

15
00:00:46,542 --> 00:00:48,601
and didn't really have access to it.

16
00:00:48,625 --> 00:00:51,018
Well, why are we talking about this now?

17
00:00:51,042 --> 00:00:55,976
Well, in 2020, in the midst of
a global pandemic and a looming recession,

18
00:00:56,000 --> 00:00:57,559
inequities are really laid bare

19
00:00:57,583 --> 00:01:00,559
across nearly every system
in the United States:

20
00:01:00,583 --> 00:01:05,018
health care, education,
criminal justice and finance,

21
00:01:05,042 --> 00:01:09,184
and people were moved
to take action online, in streets,

22
00:01:09,208 --> 00:01:11,851
in meetings at work,
in corporate boardrooms.

23
00:01:11,875 --> 00:01:15,226
And I, as a consultant, started
having conversations with clients

24
00:01:15,250 --> 00:01:16,958
that I thought I would never have.

25
00:01:17,917 --> 00:01:20,434
I guess the question
that I'd been asking myself is,

26
00:01:20,458 --> 00:01:24,101
how do we make sure that in this moment,
this results in action and progress

27
00:01:24,125 --> 00:01:28,351
that starts to close that wealth gap
for Black versus white Americans?

28
00:01:28,375 --> 00:01:29,684
So who am I?

29
00:01:29,708 --> 00:01:31,268
My name is Kedra Newsom Reeves.

30
00:01:31,292 --> 00:01:33,476
I am a consultant
for banking institutions,

31
00:01:33,500 --> 00:01:35,768
hedge funds, asset managers.

32
00:01:35,792 --> 00:01:37,184
But before any of that,

33
00:01:37,208 --> 00:01:40,684
I am a Black American
who is the descendant of slaves.

34
00:01:40,708 --> 00:01:42,601
And when we talk about the wealth gap,

35
00:01:42,625 --> 00:01:44,934
it's really important
to understand the history,

36
00:01:44,958 --> 00:01:47,934
so I thought I'd tell a little story
about a family, my family,

37
00:01:47,958 --> 00:01:50,768
and how policy intersects with wealth.

38
00:01:50,792 --> 00:01:53,184
So we'll start with
my great-great-grandfather.

39
00:01:53,208 --> 00:01:54,934
He was a man named Silas Newsom,

40
00:01:54,958 --> 00:01:58,268
and Silas was born a slave
outside Nashville, Tennessee,

41
00:01:58,292 --> 00:01:59,684
on Newsom Station,

42
00:01:59,708 --> 00:02:02,476
where he and his family
worked on a quarry.

43
00:02:02,500 --> 00:02:03,809
He didn't own anything.

44
00:02:03,833 --> 00:02:06,684
He didn't own his home.
He didn't own property.

45
00:02:06,708 --> 00:02:08,726
He didn't really even own his own body,

46
00:02:08,750 --> 00:02:10,476
his own labor, his children.

47
00:02:10,500 --> 00:02:12,851
Any of those things, all of those things,

48
00:02:12,875 --> 00:02:16,101
were here to create wealth
for someone else.

49
00:02:16,125 --> 00:02:18,809
So we believe that he was a servant

50
00:02:18,833 --> 00:02:21,893
during the Civil War
for a Confederate general

51
00:02:21,917 --> 00:02:24,184
who was actually fighting
to keep him enslaved,

52
00:02:24,208 --> 00:02:27,083
so he really had no wealth,
he had no control over his life.

53
00:02:27,958 --> 00:02:31,393
Well, at the end of slavery,
there was a policy opportunity.

54
00:02:31,417 --> 00:02:33,059
There was a question:

55
00:02:33,083 --> 00:02:36,351
what do we do for
the hundreds of years of slavery

56
00:02:36,375 --> 00:02:39,726
now that we are ending slavery
and the country is coming together?

57
00:02:39,750 --> 00:02:41,059
And there was a choice.

58
00:02:41,083 --> 00:02:43,143
We could make a settlement
with the slaves,

59
00:02:43,167 --> 00:02:45,684
or we could make a settlement
with the slave owners.

60
00:02:45,708 --> 00:02:49,851
Well, the slaves had no power
to advocate for themselves in that moment,

61
00:02:49,875 --> 00:02:51,518
and the country had to be united,

62
00:02:51,542 --> 00:02:56,309
so the federal government decided
to give that settlement to slave owners,

63
00:02:56,333 --> 00:03:01,184
essentially giving them money
for the property that they had lost

64
00:03:01,208 --> 00:03:02,518
at the end of the war.

65
00:03:02,542 --> 00:03:06,268
And not their physical property,
not their homes, but people,

66
00:03:06,292 --> 00:03:10,851
the slaves that had provided
free labor for years and decades.

67
00:03:10,875 --> 00:03:13,601
So Silas, at the end of the Civil War,

68
00:03:13,625 --> 00:03:14,934
had no wealth.

69
00:03:14,958 --> 00:03:17,643
He was free but had no wealth.

70
00:03:17,667 --> 00:03:18,934
He became a sharecropper.

71
00:03:18,958 --> 00:03:20,809
My great-grandfather Silas was born

72
00:03:20,833 --> 00:03:22,893
a number of years
after the end of slavery,

73
00:03:22,917 --> 00:03:24,976
and he was drafted to serve in World War I

74
00:03:25,000 --> 00:03:28,351
along with 350,000
other Black American soldiers

75
00:03:28,375 --> 00:03:30,101
in segregated units.

76
00:03:30,125 --> 00:03:31,393
He served in the war.

77
00:03:31,417 --> 00:03:33,476
When he came back to the United States,

78
00:03:33,500 --> 00:03:36,726
at the end of the war,
there was very anti-Black sentiment.

79
00:03:36,750 --> 00:03:39,726
The economy was compressing,
there were a lot of stressors,

80
00:03:39,750 --> 00:03:45,393
and Black people could not get land,
they could not get loans for homes,

81
00:03:45,417 --> 00:03:49,434
they really could not acquire any credit
to build wealth over time,

82
00:03:49,458 --> 00:03:52,101
so he also became a farmer.

83
00:03:52,125 --> 00:03:54,934
And he had a son, also named Silas --

84
00:03:54,958 --> 00:03:57,184
there are a lot of Silases in my family --

85
00:03:57,208 --> 00:03:58,518
my grandfather.

86
00:03:58,542 --> 00:04:02,125
My grandfather Silas was also a soldier
and fought in World War II.

87
00:04:02,917 --> 00:04:04,434
After World War II,

88
00:04:04,458 --> 00:04:06,934
the US Federal Government
passed the GI Bill,

89
00:04:06,958 --> 00:04:08,851
which provided support for veterans.

90
00:04:08,875 --> 00:04:11,476
And the bill provided
for building of hospitals,

91
00:04:11,500 --> 00:04:12,809
student loans

92
00:04:12,833 --> 00:04:19,143
and, most importantly for wealth-building,
low-interest home mortgages for veterans.

93
00:04:19,167 --> 00:04:21,268
In the years following the war,

94
00:04:21,292 --> 00:04:25,184
the GI Bill accounted for
four billion dollars of funding

95
00:04:25,208 --> 00:04:27,434
to nine million veterans.

96
00:04:27,458 --> 00:04:30,000
But Black veterans
largely did not benefit.

97
00:04:31,125 --> 00:04:34,893
So Silas, my grandfather,
came back to Nashville, Tennessee,

98
00:04:34,917 --> 00:04:37,976
and he married my grandmother,
whose name is Cinderella.

99
00:04:38,000 --> 00:04:40,268
Yes, my grandmother's name was Cinderella.

100
00:04:40,292 --> 00:04:42,684
And they had eight children.

101
00:04:42,708 --> 00:04:44,393
But they never bought a home.

102
00:04:44,417 --> 00:04:46,476
And the highlight of their housing journey

103
00:04:46,500 --> 00:04:48,976
was moving into
a new public housing project

104
00:04:49,000 --> 00:04:50,518
with their children

105
00:04:50,542 --> 00:04:52,559
and paying rent for that housing project,

106
00:04:52,583 --> 00:04:57,351
which in terms of the quality of housing
was fantastic for them and a step up,

107
00:04:57,375 --> 00:04:59,583
but did not allow them to build wealth.

108
00:05:00,375 --> 00:05:02,309
My father, another soldier,

109
00:05:02,333 --> 00:05:04,559
a 20-year veteran
of the United States Marines,

110
00:05:04,583 --> 00:05:06,934
bought his first home in his early 50s,

111
00:05:06,958 --> 00:05:12,226
but it took four generations
for our family to move into homeownership

112
00:05:12,250 --> 00:05:16,042
and begin to build ownership
and equity in a home.

113
00:05:17,333 --> 00:05:20,434
That's one family's story,
and I skipped a lot of things

114
00:05:20,458 --> 00:05:23,934
that happened between
the end of slavery and today:

115
00:05:23,958 --> 00:05:28,893
redlining, housing discrimination
before the Fair Housing Act in the 1970s,

116
00:05:28,917 --> 00:05:31,559
the really important role
that Black-owned banks played

117
00:05:31,583 --> 00:05:33,167
in building Black communities,

118
00:05:34,250 --> 00:05:36,518
the Savings and Loan Crisis of the 1980s,

119
00:05:36,542 --> 00:05:38,643
which crushed a lot of Black banks,

120
00:05:38,667 --> 00:05:40,976
and the subprime crisis in 2008,

121
00:05:41,000 --> 00:05:45,226
which stripped a lot of Black
and brown homeowners of their homes.

122
00:05:45,250 --> 00:05:46,809
There's a lot of history there,

123
00:05:46,833 --> 00:05:50,726
but that story tells you a bit
about how we get to this 10x gap

124
00:05:50,750 --> 00:05:52,333
where we are today.

125
00:05:53,333 --> 00:05:56,643
Now, certainly, as we think
about the size of that gap,

126
00:05:56,667 --> 00:06:01,500
it is critical for the Federal Government
to take a number of actions.

127
00:06:02,250 --> 00:06:05,434
That said, financial institutions
play a really important role

128
00:06:05,458 --> 00:06:09,226
in providing access to credit,
access to capital,

129
00:06:09,250 --> 00:06:10,934
to build communities

130
00:06:10,958 --> 00:06:13,083
and allow Black communities to thrive.

131
00:06:14,208 --> 00:06:16,351
We have to be clear;

132
00:06:16,375 --> 00:06:20,726
managing 17,000 dollars better
does not get us there.

133
00:06:20,750 --> 00:06:23,768
Better education does not get us there.

134
00:06:23,792 --> 00:06:27,268
Access to credit and capital are critical.

135
00:06:27,292 --> 00:06:29,518
So I want to talk
about four solutions today

136
00:06:29,542 --> 00:06:33,625
that financial institutions can contribute
to start to close the wealth gap.

137
00:06:34,667 --> 00:06:37,934
Number one is getting
more people on the ladder,

138
00:06:37,958 --> 00:06:39,333
getting more people banked.

139
00:06:40,792 --> 00:06:43,268
We know today that
about half of Black Americans

140
00:06:43,292 --> 00:06:45,351
are un- or underbanked.

141
00:06:45,375 --> 00:06:47,976
Unbanked means that
you don't have a banking account.

142
00:06:47,999 --> 00:06:50,767
Underbanked means
that you have a bank account

143
00:06:50,792 --> 00:06:55,726
but you use alternative services
for check-cashing or payday lending

144
00:06:55,750 --> 00:06:57,393
or paying bills.

145
00:06:57,417 --> 00:07:00,309
And that's not just expensive
from a transaction perspective

146
00:07:00,333 --> 00:07:02,018
in terms of the fees that you pay,

147
00:07:02,042 --> 00:07:05,851
it's also expensive in terms of the time
that you commit to paying a bill.

148
00:07:05,875 --> 00:07:08,809
Think about how you pay
your utility bill today.

149
00:07:08,833 --> 00:07:11,059
It probably comes
out of your checking account.

150
00:07:11,083 --> 00:07:12,559
You don't even think about it.

151
00:07:12,583 --> 00:07:14,726
You set it up in advance,
and it's automatic.

152
00:07:14,750 --> 00:07:16,018
Well, if you're unbanked,

153
00:07:16,042 --> 00:07:18,601
you are probably going
to get a money order somewhere,

154
00:07:18,625 --> 00:07:20,351
physically, a piece of paper.

155
00:07:20,375 --> 00:07:23,434
You then travel to City Hall or your DMV

156
00:07:23,458 --> 00:07:24,726
to pay that bill.

157
00:07:24,750 --> 00:07:27,518
About 40 percent of people
who are unbanked

158
00:07:27,542 --> 00:07:31,601
say they are unbanked because they think
they don't have the minimum amount

159
00:07:31,625 --> 00:07:34,143
to really maintain a checking account.

160
00:07:34,167 --> 00:07:35,726
Well, that's just not true.

161
00:07:35,750 --> 00:07:37,226
In the last several years,

162
00:07:37,250 --> 00:07:40,393
credit unions, community banks
and major banking institutions

163
00:07:40,417 --> 00:07:45,351
have created low-cost, no-minimum
checking and savings account products

164
00:07:45,375 --> 00:07:48,559
specifically made for this population.

165
00:07:48,583 --> 00:07:51,184
So we have an issue with awareness.

166
00:07:51,208 --> 00:07:53,893
Banks, community partners and others

167
00:07:53,917 --> 00:07:57,059
have to work together to increase
the awareness of these products

168
00:07:57,083 --> 00:07:58,934
in communities that need them,

169
00:07:58,958 --> 00:08:01,434
so that we can start to reduce
the number of people

170
00:08:01,458 --> 00:08:02,809
who are un- and underbanked

171
00:08:02,833 --> 00:08:05,643
and get them on the ladder
that we talked about earlier.

172
00:08:05,667 --> 00:08:08,726
The challenge is about 28 percent
of Black and Latinx families

173
00:08:08,750 --> 00:08:10,143
are credit-invisible,

174
00:08:10,167 --> 00:08:14,143
which means that you have
a thin credit file or no credit file.

175
00:08:14,167 --> 00:08:17,351
And the way that credit works
and creditworthiness assessments work

176
00:08:17,375 --> 00:08:19,601
is to say, if you can prove

177
00:08:19,625 --> 00:08:22,684
that you have paid credit back
consistently previously,

178
00:08:22,708 --> 00:08:24,309
then I can lend you more credit.

179
00:08:24,333 --> 00:08:27,018
It's kind of a chicken
or an egg situation.

180
00:08:27,042 --> 00:08:30,559
The interesting thing is that banks
and financial technology companies

181
00:08:30,583 --> 00:08:33,851
have really innovated in recent years
to use alternative data --

182
00:08:33,875 --> 00:08:35,851
cable bills,

183
00:08:35,875 --> 00:08:37,434
utility bills,

184
00:08:37,458 --> 00:08:39,309
rent payments, etc. --

185
00:08:39,333 --> 00:08:42,458
to show that you're able
to consistently make payments.

186
00:08:44,417 --> 00:08:47,226
The additional challenge on this one,
unlike the last one,

187
00:08:47,250 --> 00:08:48,976
which was more about awareness,

188
00:08:49,000 --> 00:08:53,726
is that you need to have
regulatory support to do these things.

189
00:08:53,750 --> 00:08:55,309
You need to prove to regulators

190
00:08:55,333 --> 00:08:57,976
that you are able
to fairly use alternative data

191
00:08:58,000 --> 00:09:01,184
to lend credit to marginalized groups.

192
00:09:01,208 --> 00:09:03,768
What we need to see is,
from the Federal Government

193
00:09:03,792 --> 00:09:05,101
and the banking industry,

194
00:09:05,125 --> 00:09:07,726
to come together
to create innovation sandboxes

195
00:09:07,750 --> 00:09:10,917
to start to use alternative data
to expand to marginalized groups.

196
00:09:12,042 --> 00:09:14,018
Well, what about communities?

197
00:09:14,042 --> 00:09:16,601
Without community wealth,

198
00:09:16,625 --> 00:09:18,976
individual wealth, in a way,
is on an island.

199
00:09:19,000 --> 00:09:21,893
And if you go into most
major cities in the United States

200
00:09:21,917 --> 00:09:24,059
to most communities of color,

201
00:09:24,083 --> 00:09:27,184
what you'll find
is underinvested communities.

202
00:09:27,208 --> 00:09:30,476
For every economic crisis,
these communities have suffered severely.

203
00:09:30,500 --> 00:09:33,518
For every economic boom,
they have not benefited.

204
00:09:33,542 --> 00:09:36,893
And so what we're seeing
in a number of cities across the country,

205
00:09:36,917 --> 00:09:38,976
and I'll use Chicago as an example,

206
00:09:39,000 --> 00:09:41,726
is the partnerships occurring

207
00:09:41,750 --> 00:09:44,684
between banking institutions,

208
00:09:44,708 --> 00:09:46,393
philanthropists,

209
00:09:46,417 --> 00:09:48,059
the city and community leaders

210
00:09:48,083 --> 00:09:50,893
to invest hundreds of millions of dollars

211
00:09:50,917 --> 00:09:52,934
to build community resources

212
00:09:52,958 --> 00:09:56,226
and communities that have
historically been disinvested.

213
00:09:56,250 --> 00:09:58,518
Lastly, we've got to talk about business,

214
00:09:58,542 --> 00:10:01,309
and not just small businesses.

215
00:10:01,333 --> 00:10:05,351
Now, when you have individual stability
and a banking institution,

216
00:10:05,375 --> 00:10:08,559
and you have access to credit,
and when you have community wealth,

217
00:10:08,583 --> 00:10:11,833
those are all fantastic things,
but we need also job creation.

218
00:10:12,542 --> 00:10:14,851
Take all of the new tech companies,

219
00:10:14,875 --> 00:10:18,309
and I say "new" because now
they're not so new,

220
00:10:18,333 --> 00:10:20,351
but take Facebook, Google, Amazon.

221
00:10:20,375 --> 00:10:23,768
At some point, all of those companies
were sole proprietorships

222
00:10:23,792 --> 00:10:25,601
with one employee

223
00:10:25,625 --> 00:10:26,934
or a few employees

224
00:10:26,958 --> 00:10:29,833
that were building a technology
that was not yet proven.

225
00:10:30,667 --> 00:10:34,018
What those companies received early on

226
00:10:34,042 --> 00:10:36,768
was venture capital money.

227
00:10:36,792 --> 00:10:38,851
And when you look
at venture capital today,

228
00:10:38,875 --> 00:10:42,684
only one percent of venture capital funds
go to Black founders.

229
00:10:42,708 --> 00:10:45,768
So if Black entrepreneurs
are largely shut out of those networks

230
00:10:45,792 --> 00:10:47,101
they're not able to grow,

231
00:10:47,125 --> 00:10:49,393
and the only way for that to change

232
00:10:49,417 --> 00:10:52,268
is from within the industry itself.

233
00:10:52,292 --> 00:10:56,309
In this generation, we must not only
be talking about thriving businesses

234
00:10:56,333 --> 00:10:57,934
in Black communities.

235
00:10:57,958 --> 00:11:01,601
We must also be talking
about seeing more Black-owned

236
00:11:01,625 --> 00:11:04,000
and founded businesses going public.

237
00:11:05,417 --> 00:11:06,934
Those are just four solutions.

238
00:11:06,958 --> 00:11:09,476
There's many other things
that can and should be done

239
00:11:09,500 --> 00:11:11,226
to close the wealth gap.

240
00:11:11,250 --> 00:11:12,893
This gap is not new.

241
00:11:12,917 --> 00:11:19,101
It was born and perpetuated
by federal policy, social constructs

242
00:11:19,125 --> 00:11:20,768
and business practice over time,

243
00:11:20,792 --> 00:11:23,393
and all of those things need to change

244
00:11:23,417 --> 00:11:25,268
to start to close the gap.

245
00:11:25,292 --> 00:11:27,809
Financial institutions
play a really critical role

246
00:11:27,833 --> 00:11:30,101
at the individual level,
at the community level

247
00:11:30,125 --> 00:11:31,476
and at the business level.

248
00:11:31,500 --> 00:11:34,684
It's important to our families,
it's important to our communities

249
00:11:34,708 --> 00:11:37,268
and it's important to our economy.

250
00:11:37,292 --> 00:11:40,184
Instead of talking about
how the gap continues to grow,

251
00:11:40,208 --> 00:11:42,476
let's begin to close the gap now.

252
00:11:42,500 --> 00:11:44,000
Thank you.