1
00:00:00,948 --> 00:00:03,417
As last recorded by
the US Federal Government,

2
00:00:03,417 --> 00:00:08,789
the median wealth for a white family
in the United States was 171,000 dollars

3
00:00:09,530 --> 00:00:14,033
and the median wealth for a Black family
was just 17,000 dollars,

4
00:00:14,033 --> 00:00:19,115
a 10x different over 150 years
after the end of slavery.

5
00:00:19,295 --> 00:00:21,582
I think first we have to ask ourselves,
what is wealth really?

6
00:00:21,582 --> 00:00:24,454
Well, wealth is all of your assets,
all of the things that you own,

7
00:00:24,454 --> 00:00:26,503
minus all of your liabilities.

8
00:00:26,503 --> 00:00:30,179
Assets are things like your car,
your house, your savings account,

9
00:00:30,382 --> 00:00:34,382
your checking account, your investments,
if you own other properties,

10
00:00:34,382 --> 00:00:35,968
your business.

11
00:00:36,685 --> 00:00:43,500
Well, that gap, that 10x gap,
is partially because for many years,

12
00:00:43,500 --> 00:00:44,732
decades in fact,

13
00:00:44,732 --> 00:00:47,105
Black Americans were left
off of that ladder

14
00:00:47,105 --> 00:00:48,857
and didn't really have access to it.

15
00:00:48,857 --> 00:00:51,457
Well, why are we talking about this now?

16
00:00:51,624 --> 00:00:56,419
Well, in 2020, in the midst of
a global pandemic and a looming recession,

17
00:00:56,419 --> 00:00:59,072
inequities are really laid bare

18
00:00:59,072 --> 00:01:01,556
across nearly every system
in the United States:

19
00:01:01,556 --> 00:01:05,314
health care, education,
criminal justice, and finance,

20
00:01:05,530 --> 00:01:08,825
and people were moved
to take action online, in streets,

21
00:01:08,825 --> 00:01:12,026
in meetings at work,
in corporate boardrooms.

22
00:01:12,210 --> 00:01:16,481
And I, as a consultant, started
having conversations with clients

23
00:01:16,481 --> 00:01:18,493
that I thought I would never have.

24
00:01:18,493 --> 00:01:21,009
I guess the question
that I'd been asking myself is,

25
00:01:21,009 --> 00:01:24,712
how do we make sure that in this moment,
this results in action and progress

26
00:01:24,712 --> 00:01:28,673
that starts to close that wealth gap
for Black versus white Americans?

27
00:01:28,673 --> 00:01:29,794
So who am I?

28
00:01:29,794 --> 00:01:31,695
My name is Kedra Newsom Reeves.

29
00:01:31,695 --> 00:01:34,039
I am a consultant for banking institutions,

30
00:01:34,039 --> 00:01:36,458
hedge funds, asset managers.

31
00:01:36,458 --> 00:01:38,412
But before any of that,

32
00:01:38,412 --> 00:01:40,730
I am a Black American
who is the descendant of slaves.

33
00:01:40,730 --> 00:01:42,985
And when we talk about the wealth gap,

34
00:01:42,985 --> 00:01:44,654
it's really important
to understand the history,

35
00:01:44,654 --> 00:01:47,256
so I thought I'd tell
a little story about a family,

36
00:01:47,256 --> 00:01:48,157
my family,

37
00:01:48,157 --> 00:01:50,717
and how policy intersects with wealth.

38
00:01:51,073 --> 00:01:53,406
So we'll start with
my great-great-grandfather.

39
00:01:53,406 --> 00:01:55,441
He was a man named Silas Newsom,

40
00:01:55,441 --> 00:01:58,228
and Silas was born a slave
outside Nashville, Tennessee,

41
00:01:58,228 --> 00:02:00,062
on Newsom Station,

42
00:02:00,062 --> 00:02:02,389
where he and his family
worked on a quarry.

43
00:02:02,389 --> 00:02:04,081
He didn't own anything.

44
00:02:04,081 --> 00:02:06,824
He didn't own his home.
He didn't own property.

45
00:02:06,824 --> 00:02:08,975
He didn't really own his own body,

46
00:02:08,975 --> 00:02:10,780
his labor, his children.

47
00:02:10,780 --> 00:02:13,012
Any of those things,
all of those things,

48
00:02:13,012 --> 00:02:16,139
were here to create wealth
for someone else.

49
00:02:16,356 --> 00:02:19,076
So we believe that he was a servant

50
00:02:19,076 --> 00:02:21,894
during the Civil War
for a Confederate general

51
00:02:21,894 --> 00:02:24,346
who was actually fighting
to keep him enslaved,

52
00:02:24,346 --> 00:02:28,183
so he really had no wealth,
he had no control over his life.

53
00:02:28,183 --> 00:02:31,009
Well, at the end of slavery,
there was a policy opportunity.

54
00:02:31,411 --> 00:02:32,928
There was a question:

55
00:02:32,928 --> 00:02:36,188
what do we do for
the hundreds of years of slavery

56
00:02:36,188 --> 00:02:39,724
now that we are ending slavery
and the country is coming together?

57
00:02:39,958 --> 00:02:41,176
And there was a choice.

58
00:02:41,176 --> 00:02:43,112
We could make a settlement
with the slaves,

59
00:02:43,112 --> 00:02:46,945
or we could make a settlement
with the slaveowners.

60
00:02:46,945 --> 00:02:50,525
Well, the slaves had no power
to advocate for themselves in that moment,

61
00:02:50,525 --> 00:02:52,277
and the country had to be united,

62
00:02:52,277 --> 00:02:56,720
so the federal government decided
to give that settlement to slave owners,

63
00:02:56,720 --> 00:03:01,194
essentially giving them money
for the property that they had lost

64
00:03:01,194 --> 00:03:02,744
at the end of the war.

65
00:03:02,893 --> 00:03:06,675
And not their physical property,
not their homes, but people,

66
00:03:06,675 --> 00:03:10,685
the slaves that had provided
free labor for years and decades.

67
00:03:11,182 --> 00:03:13,877
So Silas, at the end of the Civil War,

68
00:03:13,877 --> 00:03:15,028
had no wealth.

69
00:03:15,125 --> 00:03:17,694
He was free, but had no wealth.

70
00:03:17,694 --> 00:03:19,229
He became a sharecropper.

71
00:03:19,229 --> 00:03:21,214
My great-grandfather Silas was born

72
00:03:21,214 --> 00:03:23,133
a number of years
after the end of slavery,

73
00:03:23,133 --> 00:03:25,160
and he was drafted to serve in World War I

74
00:03:25,160 --> 00:03:28,528
along with 350,000 other
Black American soldiers

75
00:03:28,528 --> 00:03:30,012
in segregated units.

76
00:03:30,012 --> 00:03:31,314
He served in the war.

77
00:03:31,314 --> 00:03:33,416
When he came back to the United States,

78
00:03:33,416 --> 00:03:37,066
at the end of the war,
there was very anti-Black sentiment.

79
00:03:37,066 --> 00:03:40,158
The economy was compressing,
there were a lot of stressors,

80
00:03:40,158 --> 00:03:45,471
and Black people could not get land,
they could not get loans for homes,

81
00:03:45,471 --> 00:03:49,593
they really could not acquire any credit
to build wealth over time,

82
00:03:49,758 --> 00:03:52,101
so he also became a farmer.

83
00:03:52,284 --> 00:03:55,169
And he had a son, also named Silas --

84
00:03:55,169 --> 00:03:57,488
there are a lot of Silases in my family --

85
00:03:57,488 --> 00:03:58,489
my grandfather.

86
00:03:58,489 --> 00:04:02,032
My grandfather Silas was also a soldier
and fought in World War II.

87
00:04:02,616 --> 00:04:04,618
After World War II,

88
00:04:04,618 --> 00:04:07,254
the US Federal Government
passed the GI Bill,

89
00:04:07,254 --> 00:04:09,139
which provided support for veterans.

90
00:04:09,139 --> 00:04:11,764
And the bill provided
for building of hospitals,

91
00:04:11,764 --> 00:04:12,900
student loans,

92
00:04:12,900 --> 00:04:18,388
and, most importantly for wealth-building,
low-interest home mortgages for veterans.

93
00:04:18,921 --> 00:04:21,290
In the years following the war,

94
00:04:21,290 --> 00:04:25,467
the GI Bill accounted for
four billion dollars of funding

95
00:04:25,467 --> 00:04:27,475
to nine million veterans.

96
00:04:27,475 --> 00:04:29,755
But Black veterans
largely did not benefit.

97
00:04:30,055 --> 00:04:34,818
So Silas, my grandfather,
came back to Nashville, Tennessee,

98
00:04:34,818 --> 00:04:38,134
and he married my grandmother,
whose name is Cinderella.

99
00:04:38,134 --> 00:04:40,923
Yes, my grandmother's name was Cinderella.

100
00:04:40,923 --> 00:04:43,399
And they had eight children.

101
00:04:43,399 --> 00:04:44,918
They never bought a home.

102
00:04:44,918 --> 00:04:46,601
And the highlight of their housing journey

103
00:04:46,601 --> 00:04:48,578
was moving into
a new public housing project

104
00:04:48,578 --> 00:04:52,615
with their children and paying rent
for that housing project,

105
00:04:52,615 --> 00:04:57,618
which in terms of the quality of housing
was fantastic for them and a step up,

106
00:04:57,618 --> 00:04:59,994
but did not allow them to build wealth.

107
00:05:00,261 --> 00:05:02,596
My father, another soldier,

108
00:05:02,596 --> 00:05:04,765
a 20-year veteran
of the United States Marines,

109
00:05:04,765 --> 00:05:07,251
bought his first home in his early 50s,

110
00:05:07,251 --> 00:05:12,362
but it took four generations
for our family to move into homeownership

111
00:05:12,362 --> 00:05:15,932
and begin to build ownership
and equity in a home.

112
00:05:17,534 --> 00:05:20,610
That's one family's story,
and I skipped a lot of things

113
00:05:20,610 --> 00:05:23,996
that happened between
the end of slavery and today:

114
00:05:23,996 --> 00:05:29,152
redlining, housing discrimination
before the Fair Housing Act in the 1970s,

115
00:05:29,152 --> 00:05:32,128
the really important role
that Black-owned banks played

116
00:05:32,128 --> 00:05:34,062
in building Black communities,

117
00:05:34,062 --> 00:05:36,781
the Savings and Loan Crisis of the 1980s,

118
00:05:36,781 --> 00:05:38,890
which crushed a lot of Black banks,

119
00:05:38,890 --> 00:05:41,209
and the subprime crisis in 2008,

120
00:05:41,209 --> 00:05:45,246
which strIpped a lot of Black
and brown homeowners of their homes.

121
00:05:45,463 --> 00:05:47,081
There's a lot of history there,

122
00:05:47,081 --> 00:05:50,842
but that story tells you a bit
about how we get to this 10x gap

123
00:05:50,842 --> 00:05:52,461
where we are today.

124
00:05:52,693 --> 00:05:56,713
Now, certainly, as we think about
the size of that gap,

125
00:05:56,713 --> 00:06:01,291
it is critical for the Federal Government
to take a number of actions.

126
00:06:02,491 --> 00:06:05,762
That said, financial institutions
play a really important role

127
00:06:05,762 --> 00:06:09,159
in providing access to credit,
access to capital,

128
00:06:09,473 --> 00:06:11,576
to build communities

129
00:06:11,576 --> 00:06:14,478
and allow Black communities to thrive.

130
00:06:14,478 --> 00:06:15,929
We have to be clear;

131
00:06:15,929 --> 00:06:21,107
managing 17,000 dollars better
does not get us there.

132
00:06:21,107 --> 00:06:23,943
Better education does not get us there.

133
00:06:23,943 --> 00:06:26,829
Access to credit and capital are critical.

134
00:06:27,279 --> 00:06:30,289
So I want to talk about
four solutions today

135
00:06:30,289 --> 00:06:34,125
that financial institutions can contribute
to start to close the wealth gap.

136
00:06:34,592 --> 00:06:38,263
Number one is getting
more people on the ladder,

137
00:06:38,263 --> 00:06:40,972
getting more people banked.

138
00:06:40,972 --> 00:06:43,525
We know today that
about half of Black Americans

139
00:06:43,525 --> 00:06:45,627
are un- or underbanked.

140
00:06:45,627 --> 00:06:48,312
Unbanked means that
you don't have a banking account.

141
00:06:48,312 --> 00:06:50,973
Underbanked means that you
have a bank account,

142
00:06:50,973 --> 00:06:56,026
but you use alternative services
for check-cashing or payday lending

143
00:06:56,026 --> 00:06:57,627
or paying bills.

144
00:06:57,627 --> 00:07:00,486
And that's not just expensive
from a transaction perspective

145
00:07:00,486 --> 00:07:02,438
in terms of the fees that you pay,

146
00:07:02,438 --> 00:07:06,150
it's also expensive in terms of the time
that you commit to paying a bill.

147
00:07:06,150 --> 00:07:09,069
Think about how you pay
your utility bill today.

148
00:07:09,069 --> 00:07:10,870
It probably comes
out of your checking account.

149
00:07:10,870 --> 00:07:11,737
You don't even think about it.

150
00:07:11,737 --> 00:07:14,126
You set it up in advance,
and it's automatic.

151
00:07:14,126 --> 00:07:15,858
Well, if you're unbanked,

152
00:07:15,858 --> 00:07:18,744
you are probably going
to get a money order somewhere,

153
00:07:18,744 --> 00:07:20,568
physically, a piece of paper.

154
00:07:20,568 --> 00:07:23,139
You then travel to City Hall or your DMV

155
00:07:23,139 --> 00:07:24,640
to pay that bill.

156
00:07:24,640 --> 00:07:27,758
About 40 percent of people
who are unbanked

157
00:07:27,758 --> 00:07:31,685
say they are unbanked because they think
they don't have the minimum amount

158
00:07:31,685 --> 00:07:34,439
to really maintain a checking account.

159
00:07:34,439 --> 00:07:35,873
Well, that's just not true.

160
00:07:35,873 --> 00:07:38,309
In the last several years,

161
00:07:38,309 --> 00:07:40,734
credit unions, community banks,
and major banking institutions

162
00:07:40,734 --> 00:07:45,296
have created low-cost, no-minimum
checking and savings account products

163
00:07:45,296 --> 00:07:47,955
specifically made for this population.

164
00:07:48,482 --> 00:07:51,350
So we have an issue with awareness.

165
00:07:51,350 --> 00:07:53,820
Banks, community partners, and others

166
00:07:53,820 --> 00:07:57,346
have to work together to increase
the awareness of these products

167
00:07:57,346 --> 00:07:59,164
in communities that need them,

168
00:07:59,164 --> 00:08:01,550
so that we can start to reduce
the number of people

169
00:08:01,550 --> 00:08:02,884
who are un- and underbanked

170
00:08:02,884 --> 00:08:05,861
and get them on the ladder
that we talked about earlier.

171
00:08:05,861 --> 00:08:09,102
The challenge is about 28 percent
of Black and Latinx families

172
00:08:09,102 --> 00:08:10,388
are credit-invisible,

173
00:08:10,388 --> 00:08:14,481
which means that you have
a thin credit file or no credit file.

174
00:08:14,481 --> 00:08:17,403
And the way that credit works
and creditworthiness assessments work

175
00:08:17,403 --> 00:08:19,569
is to say, if you can prove

176
00:08:19,735 --> 00:08:22,989
that you have paid credit back
consistently previously,

177
00:08:22,989 --> 00:08:24,565
then I can lend you more credit.

178
00:08:24,565 --> 00:08:27,249
It's kind of a chicken
or an egg situation.

179
00:08:27,249 --> 00:08:30,652
The interesting thing is is that banks
and financial technology companies

180
00:08:30,873 --> 00:08:34,200
have really innovated in recent years
to use alternative data --

181
00:08:34,200 --> 00:08:35,884
cable bills,

182
00:08:35,884 --> 00:08:37,686
utility bills,

183
00:08:37,686 --> 00:08:39,585
rent payments, etc --

184
00:08:39,585 --> 00:08:43,065
to show that you're able
to consistently make payments.

185
00:08:43,700 --> 00:08:47,338
The additional challenge on this one,
unlike the last one,

186
00:08:47,338 --> 00:08:49,257
which was more about awareness,

187
00:08:49,257 --> 00:08:53,998
is that you need to have
regulatory support to do these things.

188
00:08:53,998 --> 00:08:57,251
You need to prove to regulators
that you are able to fairly use

189
00:08:57,251 --> 00:09:01,022
alternative data to lend credit
to marginalized groups.

190
00:09:01,388 --> 00:09:04,065
What we need to see is,
from the Federal Government

191
00:09:04,065 --> 00:09:05,549
and the banking industry,

192
00:09:05,549 --> 00:09:08,089
to come together to create
innovation sandboxes

193
00:09:08,089 --> 00:09:12,146
to start to use alternative data
to expand to marginalized groups.

194
00:09:12,397 --> 00:09:14,280
Well, what about communities?

195
00:09:14,280 --> 00:09:16,867
Without community wealth,

196
00:09:16,867 --> 00:09:19,636
individual wealth, in a way,
is on an island.

197
00:09:19,636 --> 00:09:22,228
And if you go into most
major cities in the United States

198
00:09:22,228 --> 00:09:24,485
to most communities of color,

199
00:09:24,485 --> 00:09:27,199
what you'll find
is underinvested communities.

200
00:09:27,199 --> 00:09:30,736
For every economic crisis,
these communities have suffered severely.

201
00:09:30,736 --> 00:09:33,428
For every economic boom,
they have not benefited.

202
00:09:33,428 --> 00:09:37,133
And so what we're seeing
in a number of cities across the country,

203
00:09:37,133 --> 00:09:39,117
and I'll use Chicago as an example,

204
00:09:39,117 --> 00:09:41,870
is the partnerships occurring

205
00:09:41,870 --> 00:09:44,895
between banking institutions,

206
00:09:44,895 --> 00:09:46,436
philanthropists,

207
00:09:46,436 --> 00:09:48,573
the city and community leaders

208
00:09:48,573 --> 00:09:51,018
to invest hundreds of millions of dollars

209
00:09:51,018 --> 00:09:53,110
to build community resources

210
00:09:53,110 --> 00:09:56,513
and communities that have
historically been disinvested.

211
00:09:56,513 --> 00:09:58,798
Lastly, we've got to talk about business,

212
00:09:58,798 --> 00:10:00,583
and not just small businesses.

213
00:10:00,583 --> 00:10:05,595
Now, when you have individual stability
and a banking institution,

214
00:10:05,595 --> 00:10:08,332
and you have access to credit,
and when you have community wealth,

215
00:10:08,332 --> 00:10:10,017
those are all fantastic things,

216
00:10:10,017 --> 00:10:12,191
but we need also job creation.

217
00:10:12,191 --> 00:10:14,594
Take all of the new tech companies,

218
00:10:14,594 --> 00:10:18,046
and I say "new" because now
they're not so new,

219
00:10:18,314 --> 00:10:20,649
but take Facebook, Google, Amazon.

220
00:10:20,649 --> 00:10:24,025
At some point, all of those companies
were sole proprietorships

221
00:10:24,025 --> 00:10:25,761
with one employee

222
00:10:25,761 --> 00:10:27,245
or a few employees

223
00:10:27,245 --> 00:10:30,448
that were building a technology
that was not yet proven.

224
00:10:30,749 --> 00:10:33,691
What those companies received early on

225
00:10:33,691 --> 00:10:36,544
was venture capital money.

226
00:10:36,778 --> 00:10:39,079
And when you look
at venture capital today,

227
00:10:39,079 --> 00:10:42,523
only one percent of venture capital funds
go to Black founders.

228
00:10:42,790 --> 00:10:46,009
So if Black entrepreneurs
are largely shut out of those networks

229
00:10:46,009 --> 00:10:47,450
they're not able to grow,

230
00:10:47,450 --> 00:10:49,512
and the only way for that to change

231
00:10:49,512 --> 00:10:52,474
is from within the industry itself.

232
00:10:52,673 --> 00:10:56,527
In this generation, we must not only
be talking about thriving businesses

233
00:10:56,527 --> 00:10:58,078
in Black communities.

234
00:10:58,078 --> 00:11:01,279
We must also be talking about
seeing more Black-owned

235
00:11:01,582 --> 00:11:04,425
and founded businesses going public.

236
00:11:05,640 --> 00:11:07,159
Those are just four solutions.

237
00:11:07,159 --> 00:11:10,012
There's many other things
that can and should be done

238
00:11:10,012 --> 00:11:11,512
to close the wealth gap.

239
00:11:11,512 --> 00:11:13,270
This gap is not new.

240
00:11:13,270 --> 00:11:19,226
It was born and perpetuated
by federal policy, social constructs

241
00:11:19,226 --> 00:11:21,210
and business practice over time,

242
00:11:21,210 --> 00:11:23,553
and all of those things need to change

243
00:11:23,553 --> 00:11:25,271
to start to close the gap.

244
00:11:25,271 --> 00:11:28,541
Financial institutions play
a really critical role

245
00:11:28,541 --> 00:11:30,709
at the individual level,
at the community level,

246
00:11:30,709 --> 00:11:31,827
and at the business level.

247
00:11:31,827 --> 00:11:34,887
It's important to our families,
it's important to communities,

248
00:11:34,887 --> 00:11:37,074
and it's important to our economy.

249
00:11:37,306 --> 00:11:40,491
Instead of talking about
how the gap continues to grow,

250
00:11:40,491 --> 00:11:42,302
let's begin to close the gap now.

251
00:11:42,501 --> 00:11:43,768
Thank you.