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tv   Hearing on Financial Industry Racial Equity  CSPAN  July 15, 2021 5:41pm-7:20pm EDT

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the subcommittee will come to order without objections. the chair is authorizes to declare a recess of the subcommittee at any time. without objections members of the full committee not on this subcommittee are authorized to participate in today's hearing. with the hybrid format of this hearing, we have some members and witnesses participating in person and others on the web-x platform. i would like to remind all members participating remotely to keep themselves muted when not being recognize. the staff have been instructed not to mute members except when a member is not being recognized and there is an inadvertent background noise. members are also reminded that they may participate in one remote proceeding at a time. if you are participating remotely today, please keep your camera on.
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if you choose to attend a different remote proceeding, please turn your camera off. the hearing is entitled the legacy of george floyd and an examination of financial services industries commitment to economic and racial justice. i now recognize myself for four minutes to give an opening statement. good afternoon. americans of all races, white, black, young and old from the mail room to the c suites were united and took to the streets to demand justice in an end to systemic racism that permeates many of our institutions and corporations. the voices of the many resonated in board rooms and "c" sweets as corporate leaders used the moment to empathize with the frustrations of protesters, their employees and even
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stakeholders. george floyd's murder was an indisputable example of systemic racism that shocked the conscious of the american public. thus today's hearing entitled the legacy of george floyd, an examination of financial services, industries commitments to economic and racial justice. the ceo of jpmorgan chase, jamie dimon, said in weeks following george floyd's death we are watching, listening and want every single one of you to know that we are fighting against racism and discrimination wherever and however it exists. the ceo of bankone of american brian linehan said in his testimony to the senate banking committee may of 2021, his company hosted thousands of
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courageous conversations with their employees and social justice leaders to foster understanding and a common approach to addressing injustice. leading banks and other financial institutions pledged to serve of as allies and apply their power and influence and resources to support the fight for social justice and to invest in an economic opportunity for black communities that have been red lined and shut out. this hearing comes 13 months following the death of george floyd and the recent analysis by christ investment research shows that united states corporations pledged $15 billion including $33 billion from financial service companies. while pledges and platitudes that affirm values are important. we stand at a cross-road that demands tangible and transparent action.
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today i stand and urge my colleagues to join me in calling upon corporations to live up to your commitment, be intentional and implement sustainable practices that will permanently address the economic inequities that divide our nations. transparency and accountability. you're going to hear that a lot. transparency and accountability must be at the heart of your commitments, and i call upon financial companies to fully embrace the spirit of moy legislation hr-2123, the inclusion and data transparency and accountability act. i call upon business leaders to join in the fight for social justice that impacts your workforce to champion diversity inclusion practices and to develop and leverage financial products and eliminate racial
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and gender wealth gaps. the financial services industry is a cornerstone of the american economy and workforce so we want to hear today that you are going to be a part of the trajectory of future investment in the black and rural community so let's bend the arc of justice by examining and committing to fully inclusive economic future. i look forward to hearing more from all of you. the chair now recognizes the ranking member for five minutes. congresswoman ann wagner, my colleague and someone who has been with us from the very beginning of the diversity and inclusion committee. i now recognize you for an opening statement. >> i thank you, madam chairwoman, and thank you to our witnesses for joining us today. today we'll be discussing how america's banks are taking positive steps toward a more
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inclusive banking system. the areas where banks can do more to support underserved communities and unbanked individuals and how innovation and fin techs such as mr. mya's firm can be a part of the solution. members on this committee believe that all americans should have access to financial institutions, financial firms and the financial systems to support and build economic prosperity. they should have the opportunity to save and invest for their family, for college and for retirement. the subcommittee has examined and will continue to examine the strides that the financial services industry has made towards promoting diversity and inclusion and expanding banking services to historically underserved community. america's banks and other organizations in the financial services industry promised to
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devote resources to advancing racial equity. banks pledged billions of dollars to programs designed to close the wealth gap, drive homeownership and bolster community development financial institutions, our cdfis and our depository institutions, mdis. banks have also been partnering with community organizations focused on racial equity such as the neighborhood assistance corporation of america and the national community reinvestment coalition. i only listed just a few of the noteworthy commitments from the financial services industry to increase bank services and better assist america's underserved communities. now bank of america committed $1.25 billion over five years to advance racial owe quality and economic opportunity. as part of that effort the bank announced in may 2021 that it
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would expand its national affordable homeownership program. the bank has made more than 350 million in investment including equity investments in 40 minority-focused funds and 14 minority deposit in financially developed goldman sachs announced 1 million blackin women attend billion dollar investment initiative, focused on investing in black women to drive investment in housing, health care, access to capital, or education, job creation, and work forcece advancement, digit connectivity, and financial health. in 2020, jpmorgan announced a $30 billion over five-year commitment to racial the commitment includes it initiatives for affordable housing, small business ve expansion and neighborhood development. in addition to these private
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sector commitments congress has provided $12 billion to minority depository institutions in the t december consolidated in appropriations act for fiscal th year 2021. i look forward to continuing to work with america's banks on rd these initiatives and am encouraged by the progress we e have seen these past few years. i thank the chairwoman and i yield back. >> thank you so much. today first let me welcome all of our witnesses who are here to today in person or remotely. first, we have remotely mr. fabrice coles, vice president of government affairs at the bank policy institute. welcome. next we have mr. donald cravins,
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the executive vice president and chief operating officer at the national urban league. thank lyyou. remotely, we have mr. darrick f hamilton, a professor of economics in urban policy with the new school, and i must certainly say this, informally from my great state of ohio at the ohio state university. welcome. then we have ms. jonay holkins, senior director of the policy at the business round table, greetings. and finally, we have mr. hassan miah, the chief executive officer at paybaby. welcome. witnesses are reminded that their oral testimony will be re limited to five minutes. you should be able to see a timer on your screen or on the desk in front of you that will k indicate how much time you have left.
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when you have one minute remaining, a yellow light will appear. would i ask that you be mindful of the timer and when the red light appears to quickly wrap up your testimony so we can be respectful of both the other witnesses and the committee members' time. without objection your written statement will be made part of the record. mr. coles. you are now recognized for five minutes to now give your oral testimony.og mr. coles is on the screen. >> thank you, madam chair. chairman by a beatty, ranking member, wagner, and members of the subcommittee. thank you for having me today. i'm honored to be before you. b i'm the vp at the bank policy institute, a non-public partisan policy research and advocacy group. i appreciate the invitation to discuss the banking industry's effortsat to help reduce racial inequality. banks must be a part of the solution if there's to be real e improvements and outcomes for
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all communities, especially communities of color many of whom have been left behind today, however, our focus is on banks' efforts to reduce inequality in black communities and how they are leveraging business models, networks and resources to better serve them. i work directly with a group of executives responsible for thisr agenda at the banks and can n share that this has been a time of purposeful action. banks have decided strategies, agreed upon budgets, allocated resources and built teams to execute on this investments have been made. partnerships have been cemented and product innovation is av ongoing, philanthropy is continuing. has been $50 billion committed. more than $1 billion of support and investment has already gone out the progress has been made, but given the nature and residue of centuries of financial exclusion, much remains to be done. racial equity gaps and income, e health, education, housing and p wealth have proven intractable,e
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but events of 2020, the disproportionate impact of the pandemic on black communities and the global response to the murder of george floyd have spurred fresh thinking and action. banks' actions to combat equity gaps include investments, partnerships, product innovation and philanthropy. bpi member banks know that in n order to address centuries of financial exclusion, they have d to invest in people and f organizations that are driving positive economic outcomes. a they are making investments in community development and financial institutions and mdis, supporting the next generation a of black entrepreneurs and bolstering neighborhood revitalization efforts alongsidk black-owned investment firms. they're investigationing debt and equity capital, but working with partners to ensure that these investments bring shared prosperity. lastly banks are investing in the future of their own ts b b organizations, redoubling their efforts to recruit, retain and r empower and promote black talenr and work elrging harder to ensu
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that the senior levels of their firmss reflect america's diversity. banks know that change involves investing time and resources with others. that's why banks are scaling impact by partnering with diverse organizations to hasten the deliberate support to black they partnered with federal regulators and state and local governments to promote new thinking and providing better access to banking services, credits and jobs and they y provide home counseling outfits they've joined nonprofits to support policyav research, prove technical assistance, and supply needed resources to minority owned t institutions. they've partnered with hbcus to invest in the futures of t tale and executed billion dollar deals with black owned broker dealers and mdis. these partnerships are complemented by a growing product banks have expanded their offers of services and increasing access to credit products for underserved or unbanked borrowers. the pandemic made clear for the
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need forle traction to access accounts. andn banks are offering more lo fee, low minimum balance accounts toal attract customers into the system. system and then banks are stem deepening the new relationships by offering small business and special purpose credit loan options. lastly,s. they are providing various forms of buying support and explaining howow ai can be used to increase the power of the borrowers that are underserved p in the past. such as those with low or no o credit thanks to the efforts of business and product units and related philanthropic results to be able to reduce results in speeds. this has all taken place across an expanded list of grantees and partners in areas such as small business, education, public health, social justice,er and civil rights. in conclusion, when the world watched as george floydon was murdered, wehe all stopped to consider whatt could be done to improve equity int our society.
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banks were a part of that introspection, and e in the yea since that horrible tragedy that rededicated their efforts to be drivers of brighter days ahead for all american communities, accompanying my written testimony is my document that gives a view into the seriousness of the tactical a considerations under way at banks to support broad-based economic opportunity and an honest assessment of the foundation that's been laid leaves me d with a final though. muchbu has been done. sadly, much more is left to do, but i can say that i'm hopeful. thank eyou, madame chair for having me here today. i look forward to takinghank yo questions. >>e thank you very much. mr. cravins you are now
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recognized foror five minutes to give an oral testimony on your presentation. >> good afternoon, chair beatty, ranking member wagner and members of the committee. o i'm don cravens jr. and serve as executive vice president and chief executive officer of the national urban league. on behalf of the entire urban league movement which consists of 91 affiliates in 36 states and the district of columbia, i thank you for convening this chair beatty, i would be remiss if i did not offer my condolences to you and your family for your recent i want you to know you've been in the prayers and the thoughts of the urban league the entire time.l >> thank you. >> the national urban league is an historic civil rights orgts dedicated to economic empowerment, equity, and socia justice. founded in 1910 as a result of great migration of african-americans to the north, the urban league collaborates at the national and the local u levels with community leaders, policy-makers and corporate partners to elevate the standards of living for ra african-americans as well as other historically underserved groups.. w we do that by focusing really in four primary areas, education,
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health, jobs and housing. pertinent to this committee and the work that you t do, the national urban league has specific programs designed to foster financial literacy, homeownership, small business financing, and home foreclosure prevention. these programs and services touch nearly 2 million americans each year. it is correct that after the killing of george floyd and other incidents of racism, many financial institutions turned to the nationall urban league and others and our network of affiliates to address issues related to systemic discrimination and inequities. for some of these financial institutions, this was a continuation of the support for theor work we've been doing. and based upon previous long standing relationships. for others,-s this was the beginning off new partnerships. and although we are thanking -- thankful, madame chair for the commitments and are hopeful real impact will be made and felt in thee communities we serve, what
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we are most hopeful about is that theseos commitments will symbolize the ending of corporate philanthropic red lining. the fact remains there is still real work to be done, and the resources that have been pledged alonee cannot remedy centuriesf inequities and disparities. research shows that despite significant economicic progress over the past decades, african-americans experience far worse economic conditions than white americans or the american population as a whole. african-americans experiencen- recession-like conditions even when the economy is thriving for other americans. the unemployment rate for african-americans has been and continues to bebe approximately twice the rate of white americans. the typical african-american householdan owns just $0.59 for every dollarr a white household earns. theea median wealth of african-american families is
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$17,000, and for white families, it's $171,000. only 42% of african-americans own t their homes compared to 7 of white families. african-americans struggle to obtains mortgages, consumer loans, andoa even credit cards.t more than one in four african-americans do not have a credit score, do not have a credit score. and 17% do not have traditional bank accounts, ranking member wagner mentioned some of these issues. so how did americaed get here? how did americaho get here? we got here because african-americans were excluded fromlu the agricultural revolutn due toe enslavement and exclude from thelu prosperity of the la century due to disenfranchisement and jim crow legall discrimination. when you add those discriminatory practicesra to t mass incarceration of african-americans that followed, it is t very clear how america s gotten here and why we have this persistent wealth gap. so what does a real commitment to equity look like? equitytm cannot be fully achiev
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byby financial institutions simy donating money to external partners and relying on us to change thehe world, the minds a the hearts of america. financial institutions must also look inward and ensure their own systems create inclusive places and places with which to do business. this is t not only the morally right thing to do, but it's also good for business. some institutions havest retain theti national urban league for internal unconscious bias training or to provide supplier diversity training. our message to our corporate clients is simple. if you want real change, if yo commitment to equity, then you must be transparent and be willing to an example. otherwise you're only partially committed to equity, you're window tydressing. so when it comes to economics and the work of financial institutions there is much work to be done. the organizations best suited to assist financial institutions with addressing these issues, we've traditionally been underfunded, but the commitments
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are a start. however, none of our organizations can make these changes alone. itan will require government an our financialil institutions an our nonprofit organizations working together, so again, thank you for your allowing me to be here thtoday, madame chai members, and allowing me to testify on this very important subject. thank you your testimony, mr. cravins. mr. hamilton you are nowmo recognized for five minutes to give an oral presentation on your testimony. h o and he is on the screen. >> thank you, chairwoman beatty, and good afternoon. thank you ranking member wagner, other r esteemed members of the subcommittee, and ier too want offere my heartfelt condolences as well as gratitude for everything that you do, madame chair. i am darrick hamilton, professor of economics policy and the director of the institute on race r and political economy.
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the fact that george floyd coud be killedld in broad daylight b law enforcement for over an ight-minute period with a knee on his neck while screaming for mercy, that he couldn't breathe, it has to be the result of a devaluation of hisis life becau he's vablack. after repeated examples ofd similar killings, this is vivid and should at least i by now be undisputed. the eimmoral devaluation of blak lives has been engrained in s america's political economy, and it's long overdue for a reckoning. so as a nation, are we finally ready to reverse our enduring and immoral blight of racism and redefine economic good to embrace the principles of morality, humanity, sustainability, and provide a patriotic s pathway to promote r shared prosperity and achieve racial economic justice. government has a fiduciary responsibility to facilitate inclusion, civic engagement,
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social equity for all its people. all policies and government actions are rooted in norms, especially those related to production, transaction, and governments should promote diversity and inclusion and belonging in all aspects of civic and political economy simplyro because it is just and the right thing to do. to achieve this, we need a deeperhi understanding of how devaluing individuals based on identities like orace, gender d sexual orientation, how they relate to political notions of who's deserving and who's undeserving. this is essential to expand ou knowledge beyond conceptions of individual transactionsdu into workings of larger political economy structures that affect us trall. our current economic system is founded upon the values of self-interested accumulation without bounds. but our economy should be grounded in different values. values off economic inclusion, civiclu engagement, social equi,
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human dignity, sustainability and sharedd prosperity. our enormous racial wealth dpap is a measure of our racist past, a past rooted in a history in which white americans have been privileged by government interventions that afforded them access to resources in an ettertive intergenerational accumulation associated with thoseve resources. this is in contrast to a history for blacks and indigenous americans where their person hood and whatever capital they may have established has always been vulnerable to exploitation and extrapolation by state complicit confiscation, destruction, fraud, terror, theft and other acts of violence. much of the framing around the racial wealth gap focuses on poor financial choices and decisions operate of largely black, latinx and poor borrowers. that framing is wrong. the directional emphasis is
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wrong. it is more likely that meager economic circumstance, not poor decision-making or deficient knowledge leaves poor borrowers withde little to no financial options but to attain and use predatory andnd abusive financi services. households with few assets and low f incomes are compelled to turn to high cost, unconventional alternative financial products. theyia generally are aware that these products are predatory, but they have no alternatives. these last resort debt traps render recipients indentured borrowers having to pay higher and higher interest rates and fees until ultimately they default on the original pa a principal. racial inequality and despair arey not inevitable, rather th are the result of political choices. like wise, we can make different political choices. congress needs to provide public options, options that directly compete with and crowd out inferior private options,
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private options that do not assure universal qualityty acce to health care, housing, schooling, financial services, capital, and the free mobility throughout society without the psychological and physical threat of detention or bodily harm at the hands of a state sanctioned terror because someone's identity isti linked a vulnerable or stigmatized group. inequality is not rooted in deficient people but rather deficient resources and power allocations. let's change thathe paradigm. let's be bold. let's advocate for programs and initiatives that truly empower people with economic security,c dignity, and authentic agency to define andnd achieve their goal. thank you for your time. >> thank you, mr. hamilton. mrs. holkins, you are now recognized for five minutes to give an oral presentation on youre testimony. >> good afternoon, chairwoman waters,st chairwoman beatty,
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chairwoman wagner, and members of the house financial services committee on diversity and e inclusion. thank you for the opportunity to testify today and for holding this hearing. business roundtable is an association of over 230 ceos of america's o leading companies working to promote a thriving u.s. economy andg to expand opportunity for all americans. in my role, i am responsible for overseeing the raciall equity ad justicey agenda. just a few months ago during one of the greatest tests on our democracy, i was serving as judiciary counsel for congressman david cicilline. prior to that, i wasdi a senior litigation associatess at a d.c law firm representing community health centers and other federl grantees andm safety net providerste across the country. i joined business roundtable in april because i believe that the ceosve commitments to ensure th
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business community is doing their part to d solve the racia wealth gap is necessary and important. 2020s after year of reckoning for america. in response to the murder of george floyd, business roundtable ceos released a set ofof policing reform principles and has continued to press publicly for bipartisan policing reform legislation. our members then turned to an issue central to equity in our economy, the racial wealth gap. that gapou is a product of hundreds of years of policies and practices that have denied economic opportunity to black americans, tydespite our many contributions. with humility, business roundtable engaged in hundreds of conversations with social justice experts including fellow panelist darrick hamilton as well as mark mriel and cy richardson at the national urban league. that process was focused on gathering information with the
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goal of driving support toward areas where the research and thw data showed it mattered most. on october 15, 2020, this process culminated in the special committee's o release ia sett of corporate actions and public policy recommendations focused on six key areas, employment, finance, education, housing, health, and justice. as a ceo organization that represents almost all sectors of the economy, business roundtable is uniquely positioned to bring about real change for communities of color and really work toward advancing racial equity. companies are doing just that. for example, over the past year paypal has invested $510 million toward equity and inclusion and social justice causes. this includes $15 million in paypalpa empowerment grants tha were distributed directly to
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approximatelyy 1,400 black-owne businesses, many of which were also operated by black women. prudential made $10 million contribution to remove m barrie to financial wellness in underserved markets. couple mines deployed $3 million to cdfis, the naacp and score to support black-owned enterprises in indiana, minnesota, and tennessee. duke energy deposited $5 million into optus bank, a black-owned bank in south carolina. bank of america made more than $350 million in various investments across its primary focus areas ofme health, jobs, affordablea housing, and small businesses. our member companies are also committed to increasing diversity and inclusion in their workplaces from the top down. business roundtable announced a multiyear effort to a reform thr hiring andg talent management practices and address inequiies
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in employment practices. we know that there's a long way to go on this. these are just a few of the many examples of our member companies that have made good on their promises. one year of work cannot undo the centuries of harm done to black americans and other peopleur of color. there isnd o so much more that s to be done to address the racial wealth gap and other inequities faced by communities of color. we are committed, i am committed to making real progress and k with the partnership of this committee to advance our shared goal of securing equity and opportunities for all americans. thank you for the opportunity to serve as a witness before the subcommittee. i look forward to your questions. >> thank you very much, mrs. holkins and now, mr. miah, you are recognized for five minutes to give an oral presentation on your testimony.
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>> it's red? is it? okay. >> thank you for the invitation. my name is hassan miah. i'm the ceo and founder of paybaby corp. we are a financial technology company or fintech focused on al empowerment of the black and brown community. fck i started the company and was founded in august of 2020 in the wake of the death of george ny floyd.un that deeply affected me, so paybaby, we are the only black-owned company that offers an fdic-insured mobile bank k- account where it's possible to n get a free bank account in less than five minutes. over the past few months, we've met with several of the largest banks including the largest black-owned banks in the country. our observations include the following. major banks have announced large financial commitments to the black community, and black banks have announced investments fromn the big banks.
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this is to be applauded. however, in a scale of the announced commitments appears to be larger than the actual the evidence is still a little sparse on the announced commitments and have resulted in the incremental support needed for the black community.on the biggest concern is the lack of what we call in the private sector kpi, our key performance indicators that show accountability of announcement to also, the approach and types of commitments taken by the banking industry may not make the material difference unless expanded. the financial services industry includes the private equity and venture capital industries thatt account for large share of the capital used to finance businesses and support financiae inclusion and economic empowerment in the black community. according to recent reports,
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black entrepreneurs only receive about 1% of all private equity i and venture capital. this has not changed much. the vc industry, however, has made several investments in the last year supporting new black a founder funds which is great.ea however, the scale still appears to be miniscule relative to the industry and not of any major material significance. private equity and venture capital-backed fintech is the fastest growing category of ck alternative banking and lending in this country. many of these non-minority banks or fintechs target the banking community but the business models are not designed to in support racial equity, and often resultsu in more income and weah extraction from the community. for example, just one small example.we tax advantage private equity e, firms are now making investmentx
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residential houses to be made available to rent. this could potentially crowd oud thert supply of housing and rede opportunity for the black community to achieve r homeownership, the biggest contributor to wealth creation. black equity receives -- private equity receives its largest share of capital from government and private pension funds of which the black community is a capital supplier. therefore, the lack of investment in black businesses and black entrepreneurs actually results in the transfer of wealth from the black community to other communities. this -- the approach taken by banks and corporations support black banks and mdis can only have limited impact. black mdi's total aggregated assets as approximately $10 billion, compared to total
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u.s. banking assets of 20 trillion dollars. given the limited size and smaller geographic focus they al are simply incapable of he addressing the racial equity gaps. fintechs, however, are creating a transformation of banking and financial services and similar to the other industries tech-driven companies are designed to scale and s efficiently build new models to support the market.. traditional companies and banks generally do not have those c skills to make those kind of t changes to a tech-driven economy. and therefore, also many small community banks are adding fin techs on top, but none of them are black-owned banks. therefore, they're not part of it. for the banking industry, the keys to closing the racial wealth gap and supporting racial equity is great er equity is a recirculation of capital and reduction of it excessive banking costs. the spending power of the black
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community is over $1.3 trillion and approximately $4 trillion a from the black and brown community and yet only 2% of that capital is recirculated. yet, outside the u.s. we're large formerly poor nations are gaining access to banking. new alternative and credit score systems are being developed that are as reliable as anything in t the u.s., but this does not exist here and the black and brown communities continue to stagnate.. actually the racial wealth gap is still increasing. thank you for inviting me here, and i appreciate your time. >> thank you so much for your r testimony. i'm pleased to share with us i' that we have been joined by the chairwoman of the financialth services committee. in addition to that, she isas t leader, and actually the founde of the diversity and inclusion subcommittee under financialsi i services. it gives me great honor to yield the floor to congresswoman maxine waters. > wow, thank you very much, congresswoman beatty for holding hearing, and thank you for
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inviting the witnesses who have testified. here today. the information that they are sharing with us will be very helpful in pursuing the kind of justice and equity that your k subcommittee is responsible fory making happen and, of course, our overall financial services committee is pursuing. i will start with mr. cravins and mr. hamilton. after the deaths of george floyd, ahmed arberry and breonna taylor last year, our country a entered another period of raciaa reckoning and a national focus on the systems of injustice than have deprived black americans of basic human rights and equal opportunities, including lu opportunities to build wealth for hundreds of years as the american public turned their eye to corporate america in search
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for commitments to address racial injustice. several financial institutions made promisesen to lend or prove billions o of dollars towards capital for minority depository institutions and community development financial institutions, direct grants to blackk businesses and charitabl donations to organizations serving communities of color. mr. cravins and mr. hamilton, many of thesen. institutions ha been slow to follow through on their f commitments. how can we increase the disclosuree that is necessary t help hold public companies accountable to the promises that they make, and what are the other ways that congress can ensure that these priorities are not simply empty platitudes that an institution's policies are not perpetuaing racism and
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inequality through its operations, products andpr services, and how can we prevent companies from easily pulling backn on their commitments base on changes in their organizations. i've heard a lot today that basically deals with some of these questions that i'm askinge let me just say i know the work of the urban league and, of w course, i haven't been in, you know, government for so many years. of course, i have worked closely with the urban league and i understand what your prioritiesh are, what your mandates are and what you do, but we've had a lot of discussion here today, pa particularly about the major companies in this country that after these deaths that i alluded to made commitments. how do we hold them to their promises? >> madam chair, i think today's hearing is a very good start or a very good continuation. you and chairwoman beatty and the ranking members, because c this is not a race thing. this is an american issue.e. i think by bringing attention to
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this issue, but bringing the companies here, by talking to the ceos, and you raise a great point, madame chair. it's notot just the fortune 100. these commitments were made by companies of all size. ll we at the urban league are very committed when companies have called us and say we want to be committed, how can we have? we've absolutely given them a w road plan. we've tried to help them design programs that would help them make changes in their communities. we feel we've been underfunded and ignored for decades. and so we will continue to work with them but we're asking for this committee and the members of the congress from both sides of the aisle to hold people accountable, to continue talking about thisot issue, continue having these hearings. madam chair beatty, can we havei this hearing a year from now, another hearing two years from now? a can we make sure to your point, chairwoman waters, that this is not justla a flash in the pan, that this is n not just a windo dressing, but this is indeed an my testimony, n
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to philanthropic red lining. >> thank you very much. i'm going to turn to miss holkins. how is the business s roundtable -- let me go to something that i think is a little bit uncomfortable, but we need to talk about it.t. miss holkins and mr. coles, my staff analysis indicates that a business roundtable just 3 out of 25 board members are black, and there are zero black peopled at the executive vice presidente level and above. bank policy institute has zero e black people either on its board over executive vice president levels and above. holkins and mr. coles, ho can you lead your members in racial equity initiatives when you do not have many diverse perspectives within your own organizations to help drive this work? and what efforts areet beingn m toat ensure diversity and part of your recruitment and retention
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strategies? this is very difficult, you know, being an african-american in a situation where you have a responsibility to educate and lead others who are not, who have significant roles in decision-making. how do you do that? r >> that's a very great question. so, yes, you're right. we only have three members of the t board that are black. but you know, i think really the business roundtable and our member companies do take diversity and inclusion seriously. just in my short time at business roundtable i feel heart and seen and listened to, and i do feel like my perspective is valued.ti i don't know that we would be here today but for me fighting t for this opportunity.. i think it's important that we i are held accountable and that there's true transparency.y. >> you're way past your time and i want to thank miss beatty very much but now she's got something to take back and tell them what we ask and let's get their response.
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thank you very much. >> absolutely. thank you, madam chairwoman. i now recognize the distinguished ranking member for five minutes of questions. congresswoman ann wagner. >> i thank you, madam chairwoman. according to survey results from the fdic's how america banks which was conducted in june of 2020 there are an estimated 5.4% of u.s. households that are unbanked meaning that no one in the household had a checking or savings account at aav bank or credit union. this percentage represents approximately 7.1 million s. households. mr. miah, we know that minority communities are unbanked at a higher rate than their white data shows there are several correlating factors such as education status and geography but a major factor is also
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household wealth. unfortunately, being unbanked is also very expensive because pre-paid cards and check-cashing services also come with high fees. how are you, sir, expanding access to affordable financial g services so that expensive services don't further inhibit n the ability to build wealth? >> thank you for the question. yes. now these new fintechs have the ability to offer totally free banking accounts such as ourselves, mobile banking accounts where you don't have to have the minimum deposit requirements of a regular bank. in fact, we're working with two of the largest black banks in america to replace their existing service with our banking service.he so now that is possible. i think one thing that has to n happen is there has to be more support for pushing that message out to the communities so they realize that the market now
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provides solutions that didn't exist before. m that's part of it. t the other big part if i may for a second is in order to get a a bank account you need to pass s something calledd kyc or know your customer. we have found that the black and brown and particularly poorer people, they pass kyc at about one-third less the rate simply because they don't have any typ of credit file. they don't have the history and, therefore, they don't qualify. yet, as i mentioned during my testimony, there is now alternative ways to qualify those people, and that's what we're focused on is bringing new technologies andnd data scienceo be able to bring people into the banking system on the free basis and get them out of these high cost services. >> thank you, mr. miah. >> mr. coles in your testimony you mentioned how banks are offering more services and expanding credit products for underserved borrowers. can you go into a little further detail on these products and how
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they could benefit the 7.1 million unbanked u.s. households? >> thank you, ranking member, . for the opportunity., banks are expanding their offerings of low fee and no-fee transaction accounts that are attractive to unbanked and underbanked consumers. some may know these accounts as bank on accounts. they also don't have overdraft fees as well so they are definitely a powerful tool to help promotion inclusion. s this bank-on designation which is provided by the centers for financial empowerment helps bring those folks into the banking system and then at that point banks will deepen their ba relationship with them offering them more products so this is something that a lot of banks are offering today.. i think it's close to 100 right now with significant footprint across the country, but certainly there's more -- there's a long way to go ayhere but thesese investments being made, congresswoman, and we expect to see even more penetration in this regard because,io frankly, during the
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pandemic we've seen the need. we've seen the need. this is something that banks are really focused on, ask you're going to see a lot more of theseback-on accounts being rolledte out in the near-term. you have a lot of ones in the pipeline and a lot being offered today in the marketplace. we think that's an attractive option, congresswoman. >> thank you..ho one of the key reasons that many of these households are unbanked is not having enough money required to open a bank account. however, the fdic cited other reasons including not trusting mr. coles, how can banks create community partnerships that i think build trust with unbank households and foster those relationships? >> this is -- this is an important question, ranking member, so thank you for bringing this up. communicating with the customer is key, as in any other business relationship. a more communication is required to ensure that, you know, borrowers are feeling comfortable with the financial institutions that they are engaging with, so more marketinl
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investments. more partnerships as you m indicated with community groups that can help get the word out . about the safety and the low cost attractiveness of these options. we think it's going to help -- really help make a penetration here. but you know, again, he this is another t aspect that needs mor investment and attention, and it's receiving that. and i expect more here, congresswoman. >> thank you. appreciate it. i've got more questions but i d> not have more time, so, lady chairwoman, i yield back at this point. thank you. >> thank you, madam, ranking t member for your questions.yo i now recognize myself for five minutes of questions. i'm going to ask some yes and no questions so i can hopefully get through a lot of questions. first ms. holkins. 181 ceos signed on to the business roundtable's purpose of a corporation thata pledges to foster diversity and inclusion, dignity and rmt. doesn't transparency and accountability around dni buildc confidence that the ceos and
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their companies are living up to that pledge, yes or no?nd >> yes. >> mr. follow-up, mr. coles, does the bank policy institute believe that transparency and account ability, diversity and inclusion performance should be mandatory? >> no.>> >> many of your members have endorsed mandatory disclosure on diversity data, but can you give us some insight on why bpi opposes it? >> i'm always saying that we oppose it, congresswoman. bpi generally doesn't support it. i thinkk increased i would say regulatory reportingor requirements, but there is a lot of transparency taking place. ee01s with the eeoc and also engaged with office of women and minority inclusion are underway. and we have recommended and this is a report that i've submitteda congresswoman, that more ss
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transparency be a priority, and i think that this is a journey. i think you'll see a lot more of this. you have more institutions, fors example, that since 2019 when n the committee began its diversity and inclusion data collection have really promoted more transparency, releasing eeo1s and providing that it's absolutely important and d that's why we put in our best ha practices report that we submitted to the committee, es congresswoman, and o i believe that we're going on this journey. >> thank you for being transparent. >> mr. hamilton, investors and stakeholders have increased demands for companies to conducn independent racial equity audits to ensure that they do not contribute t to systemic racism and are committed to dni. the nation's largest financial institutions, many of them are fighting these efforts. do you support racial equity audits, and what do you think they tell us about the culture u and commitment of corporations?? >> absolutely i support them, and if we value something, then
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we should measure wit, and we should holdou entiies accountabe like wern do any aspect of government that we value. >> thank you.>> mr. cravins the national urban league has issued a state of black americaak report for some4 years beyondd making financial donations. what must corporate america do to eliminate systemic barriers that drive racial and gender wealth gaps?mina bth >> madam chair, i think brother hamilton talked about i think you have to be transparent. i think you have to be held ke accountable. i think you have to look internally at the men and women who are brought into the companu to work on these issues. i've had a stint in corporate c america as well and i have been that african-american who has been a part of those discussions.av the african-american in the root cannot be the only person calling for diversity, equity and inclusion. as i would tell my white brothers and sisters, hey, i need you to chime in as well. t the company needs to hear it from you as well. h the only other advice i would give as well is the men and
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women who are charged as that chief diversity officer, madame chair, they haveve to have a direct line of communication to the ceo of the company. they have to have a direct line in order for it to work. >> thank you. mr. miah, your testimony, you highlighted private equity and . venture capital, fintechs as the fastest growing category in alternative banking and lending in the country. yet, less than 1% of venture capital investments go to black entrepreneurs. should fin tech providers be regulated to increase transparency and accountability forcy their performance and practices? >> i'm not sure they need to be regulated, if that's the t solution, but i think there should be more transparency of what they are doing, and i think the regulators could do more toe push banking regulations that support fintechs as a way to increase the participation of s the black community. >> for you, mr. hamilton, mr. miah or his
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fin tech is an important tool, but what are the best strategies to address financial services needs of consumers in the more than 1,100 banking deserts acrosski the united states? >> we need public options and need public banks. we need to set a floor to ensure that there'sth quality access available to anyone. if the private sector wants to t exist, they can exist with a bottom floor provided by >> mr. miah, i have ten seconds. i'll yield them to you. >> i'm not sure you need public banks. n i think everyone in america has a phone, and all you really have to dot is get everybody using their phone for all the power that it has,s, and that's from e poorest to the richest in america. and you see that happening around the world,ng india, afri, and everywhere. >> thank you and thank you to t all themr witnesses. my time has expired. the gentleman from ohio,
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mr. gonzalez, is now recognized for five minutes. ogut >> thank you, madam chair. thank you to our panel for theit testimonies and contributions mr. miah, i want to focus my questions on you. so i was on your website. it's a pretty amazing product. fdic insured account within five minutes, no service fees, no might be mum requirements, no overdraft fees, sounds like no atm fees if in network. how by virtue of being a fintech and not having some of the cost structures of physical banks are you able to deliver on -- on that service, that level of service? d >> so a couple of things. being built from the ground up c as a software company we're going to have the legacy problems of a major bank so that's one thing.. the second thing something happened after the last financial collapse of 2009, it s was the durbin amendment and t small banks can offer fintechs the ability to collect the 1% merchant llfee, which is almost double what chase and the bigger
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banks over 10 billion offer. with someone having a debit account and spending $800 a month, it's a profitable customer. all they have to do is use the card. that's why it's possible. >> thank you. one of the biggest barriers that we know of in terms of getting folks into the banking sector is a lack of trust. i think ms. wagner mentioned that. how does paybaby solve that? how do you enable trust in the black and brown community? m m >> that's a great question. one area that we have underinvested in this country is we still use legacy credit services, and we -- even though we're fintech we sit on top of o amg s an fdic bank, that's the structure of our market, and so our accounts approved by the underlying bank. we are pushing now for them to look at alternative scoring and kyc methods, and we're working with some of the best data w scientists in the world which is a big issue and that's where we also need an african-american or
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a person of color perspective t change it and then people will gain trust because they will see that they can get an account usingt newer methods. >> what role do you see ai and machine learning playing in youl ability tos serve your customer? >> that's a huge part of what ne we're doing is ai and machine learning, because, again, we model and looking at it around the world, and many people who do not qualify for kyc, it's possible to find from their habits that they are very trustworthy even though they never hadnd an account because they goor to the same check cashing. they go to the same grocery store. you knowe who they are. it's just that their credentials don't match. but with ai, you canw figure ou who these people are and see thateo there's no fraud and oth of risk. >> so if i heard you correctly, with the power of ai and machine learning, you can look at alternative data sources and find ways to pass kyc? >> yes, correct. >> and i would say that is the
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biggest hurdle at the moment, the first hurdle and then that hurdle extends itself to credit scoring where there's alternative credit scoring methodologies that ai is now bringing to the fold and some of the fastest and some of the s companies that have actually gone public, that's what they an are doing, and some of the biggest ones actually, they are using alternative -- they are funding and using private equite and off the balance sheet and aa because the banking regulators l have been a little slow to adopt ing thesedo methodologies and approvals. >> yeah. i appreciate you sharing that. i i think in this committee, i te think frankly that that's a big moment that you just highlighted because we know that ai and machine learning have enormous potential. we spend a lot of time i think rightly talking about whether these algorithms are going to ia reinforce biasses but what you're suggesting is hey, look,e we can do this in a way that's actually going to be inclusive s and going to be additive for --
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for our communities. >> yes. actually ai machine learning is sort of like covid is nothing but biology, ai and machine learning is nothing but math and computers. it's the i people who program tm who decide. so ife we have the right people programming them, we can have a balancedm. perspective. >> with my final 30 seconds, i noticed you're going to be offering cryptocurrency access through the app. what role do you think cryptocurrencies canan play in achieving some ofry our diversi initiatives? >> so we already offer automatic savings and we've had a lot of demand for cryptocurrencies and most banks are looking into it which is an alternative savings method.nd our goal is to offer it, but lt we're looking at ways to do it in a way that gives the proper controls and guide railsls so tt people make it -- use it as a true investment product. >> thank you, sir. i wish you the best of luck and i think it's an awesome company
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and i'm excited that you're doing it. iyo yield back. >> thank you, mr. gonzalez. the gentlewoman from michigan miss tlaib is now recognized for five minutes. >> thank you so much, madam chair. appreciate it. thank you so much for all being part of this panel. i want you all to know when i a ask the ceos of the six biggest banks in america if they knew w what environmental racism was none of them were very familiarv with it at all. each one by one said they -- i think the most one said was they were vaguely familiar. environmental racism isn't an abstract concept. i've seen it firsthand growing up in southwest detroit. the marathon oil refinery and the zip code of 48217 a predominantly black neighborhood has directly contributed to one of the worst air qualities in he state of michigan with high rates of asthma and cancer.
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and when i i visit schools, made chair, and i read to the third grade class, and they ask me whatdo i do i always start off asking, well, how many in the class have asthma, and a third of the class will raise their hand. and i talk about t the fact thai work really hard to try to get us clean air. you know, congresswoman chisholm, the first african woman ever elected to the unitee states congress say children can't learn if they are hungry.r i also believe that children re can't learn if they can't a breathe, especially breathe ch clean air.he mr. hamilton, how has this kind of environmental racism contributed to the enormous racial wealth gap in our country? >> you know, i guess it would be part of a whole infrastructure i by which black people are structured in a way that they don't have access to the resources that can enrich theirh ability to it's not coincidental who has access to good air, good land, these are products of both
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political and economic capital by which black people have not been afforded in the united states history. >> thank you. you know, miss holkins, i don't know if you know my black neighbors make up less than 15% of michigan's total population, we saw higher rates of covid an related deaths because of pre-existing conditions in my c community, and so we know that six members of the business roundtable who testified before our committee in may aren't familiar with the term environmental racism. so i'm a little disappointed and a bit angry and outraged that the ceo cs of some. largestt corporations in the world aren't thinking about how their actions and the projects they finance c may directly lea to increased pollution in front line communities like mine. so miss holkins, do you think that the other 202 members of the business roundtable are familiar with the term li environmental racism? >> yes, they are and the members
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of the business roundtable really do take seriously the bes effects of climate change on underserved populations and in particular communities of colord and so, yes, that is something that many of our members are o aware of and most certainly important for our membership. >> miss holkins, does the business roundtable plan to incorporate environmental impacts and environmental racism in the actual term as part of its member commitments in terms of racial equity in our country? >> i believe that's a very important thing that must be currently that's not within oure racial equity and justice purview, but i'm happy to take that back to my team and j figu out how t we can take into accot environmental justice issues. >> i truly appreciate that because i truly believe it does directly impact economic opportunities like housing and health my colleagues discussed today the importance of building trust and asked how do we do it.ed
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i think it truly starts with actions rather than fancy pressw releases andof trinkets of whate call community o benefits in th lens of corporations. address racial equity truly means creating decades of environmental racism in the yruc countryy and halting the damage that is still ongoing today. and that's the challenge that i leave you, ms. holkins and the business roundtable and its members today.e and i'm here to help and be a nd partner in that effort. thank you, and i yield. >> thank you for your questions. the chair now recognizes the gentleman from south carolina, mr. timmons for five minutes.nim >> thank you, madam chair. before i served in congress i te started severalst successful sml businesses, so i know from experience justar how hard it c be too start a business. and as we all know, it has not gotten any easier over the last year. small businesses like mine have borne the brunt of the economic pain inflicted by the pandemic and even before that business formation was lower than it should have been.ct
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from 2007 too 2019, application to foreignns businesses that wod hirere workers dropped by 16% or that 12-year period, and that was during the time of economic prosperity t resulting from the regulatory and tax reforms that made america more competitive in the global economy. so itha is imperative that this congress pursues an economic agenda that does not just support small businesses already in existence, but creates an environmentma ideal for small business formation. throughout our country's history, small businesssm formation and entrepreneurship has been the key to unlocking the american dream for millions upon millions of americans. andli we all know there will no be business formation without capital formation. back in may the securities and exchange commission smallll businessap capital formation advisoryry committee made two specific recommendations to chain gensler not simply to stimulate capital formation for new small businesses but also to make it easier for women and minority founded enterprises to
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raise capital for their endeavors. the advisory committee noted that traditional institutional investors are known for pattern matching or i making investment decisions that replicate patterns of who a successful entrepreneur has looked like in the aspast. unfortunately this often locks out women and minorities who are often different from traditionally successful entrepreneurs. theit changes recommended by th advisoryhe committee were numbe one increasing the cap on the regat amount of capital contributions and uncalled capital from 10 million fro to $150 million and number two, increasing the allowable number of investors or a beneficial owners from 250 to 600 for qualifying venture capital funds. following their recommendations, i am today introducing the improving capital allocation for newcomers act of 2021 or the i can act, which would codify thesend recommendations. we know capital is the life blood of allll businesses but
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especially so for small businesses inbu their formative stages. i hope that myy colleagues on both sides of the aisle here in this committee willf join me i supporting these recommendationt which will no doubt going a long way towh supporting small businesses, especially those owned by women and minorities. along those lines mr. miah would you agree that access to capital for entrepreneurs is often the primary obstacle for business formation and do you think that increasing the cap on capital contributions and the allowable number of investors inbe vc fun will help assist our minority communities and women entrepreneurs whome admittedly have a a harder time accessing capital and finding investors? >> yes, i would say that access to capital maycc be the single biggest problem that they have. i think going back to your trust question, i think many of them do not trust the financial investors to give them capital so they often don't apply. we were involved in ppp loans and many of them don't even have the proper type of accounts or
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accounting so all these things combined together make it t difficult for them to get access to capital so it's given greater access to capital and supplying them with the tools to be able to qualify to onboard them to getting the capital so they can be on the road t to developing their business. >> well, having experienced firsthand the -- the incredible number of banks that turned me down for loans, i really think that anything we can do to help new entrepreneurs succeed is a worthwhile endeavor so i look forward to working with my colleagues on both sides of thea aisle, and with that i yield back. thank you. >> thank you for the questions. the gentle woman from pennsylvania miss dean is now recognized for five minutes. >> thank you, madam chair and thank you to all of our witnesses for being here today a and sharing your advice on thisn important set of topics. >> the death of george floyd ast we all know sparked a necessaryf
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conversation, the need for ec meaningful reform that ensures true equality, justice for all, but i know we're all frustrated that conversation is simply not enough, so thank you to all of you for what you are doing to fw push these issues of justice and equality forward. >> i want to take a look at thei injustices that exist and continue to affect the economic success of black americans. we all know and recognize by this subcommittee's works that g banks and financialol institutis have a role to play. we all have been a part of passing, for example, the geore floyd justice in policing act, and we c continue to push for tt in terms off justice in our policing. but on the financial institution side, mr. cravins, the national urbanat league's work is well-known and well renowned. at the end of your testimony, was interested in something that you said, s that organizations best suited to assist financial
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institutions havee traditionall been ununderfunded. could you elaborate on who these organizations are and how you are funded, how they are funded and how do they specifically help financial institutions reach thesest platforms and recognitions of equity? >> yes, thank you, congresswoman, for the question. i was speaking about organizations like the national urban league. ee we have been saying since 1910 we live in the communities that inequities, ese these disparities. there's been a lot of talk today about trust that people have to trust the banks in order to take advantage of all of these great services that banks may be offering.ll the national urban league, the naacp, many of the community n organizations, many local organizations that i couldn't name today, those are the l go-betweens, those are the t organizations that have been trying to do this work for decades, for centuries, and yet they have been doing it through government grants, when the government gives those types of grants. they have been doing it throughg individual donation and i like
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to say they do it through blood and sweat equity and when, unfortunately, something reallyd terrible and something very unfortunate happens either et nationally or in the community e sometimes they get it like we're seeing through the george floyd situation where we're getting an outpouring of support. what i'm hoping as i've said again that this is not the beginning or the flash in ahi p of this giving. i think what -- what the - unfortunate murder of george floyd has shown and we all know this as leaders is that we havel a long way to go in this countrs but if we're going to be serious about it, let's really be seriousbo about it. the urban league has been calling for ma main street marshall plan since the 1960s. we rebuilt europe after world war ii. we over invested in europe after world war ii. we've nevada over invested in ouras urban america. we've never over invested in our ownla schools and our own roads. and as you debate an
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infrastructure plan, ladies and gentlemen, i ask you to consider whatpl would be the harm of givg a group of people who never had boots and never had strapsea so boot straps. i know i've heard several times, african-americans, pull yourselves up by the bot strapsn still waiting for the boots and the straps in many of these communities and the disparities that you're pointing out, congresswoman, they are a result of that systemic slavery t reconstruction jim crow, i said this to a very dear white frien of mine then other day. african-americans have never o d the good old days. there's never been an age of innocence for african-americans. what were our good old days? our reconstruction? so we are still hoping to form this more perfect union that our forefathers talked about. we're still hoping that the good ole days are still to come so those are the types of organizations that i believe have been underfund and we're hoping that this is the un beginning and this committee will continue this transparency and accountability and we can tt make this country great for all americans with this new supporte >> also connected to your ls opening statement is the notion that we all have to be in this n together, whether you're sitting
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in the "c" suite or around any table or you're participating in a black lives matter march and o everything in between. that's what impressed me. i represent suburban philadelphia, so you can picture those areas where black, white, young, old, people of every y color and ethnicity came together.yo that's when we know we'll lo continue to make a difference but it is frustrated because george floyd,ca of course, was heinously murdered, but we know in the time since his murder hundredsim of other men and wom have been m murdered by police, guess not so open and videotaped. so it's very frustrating. can you maybe be specific maybe -- i know i have 11 seconds left. how the national urban league could help us make progress in e these areas. >> the national urban league.rbn we've got 91 affiliates congresswoman and they really do
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the heavy lifting. our affiliates are separate affiliate. they have their own board of directors and their own full-time paid staff and they really make the difference in the urban league movements. they are the ones who do the rb housing counseling. we've counseled over 850,000 people on how to start new businesses and so organizationse like the urban league, obviously i'm a little biased but there o are others as well in the latino community and all of our ethnic communities.s. they are doing -- they are doing the real work and how can we help?? we can support them and bring attention to them and we can ? encourage our financial nd institutions to support them. >> i thank you, and thank you, madam chair. i yield back. >> thank you. ranking member wagner, do you have any more members at this time? >> not at this time, please proceed. >> thank you.em the gentle woman from texas, miss garcia is now recognized for five minutes, but, first, let me say congratulations for being vice chair of this committee. >> well, thank you, madam chair,
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and it's an honor to serve with you, and thank you for putting together this very important hearing on such an important topic, particularly as was said earlier as we approach certain anniversaries that are important on this topic. my colleagues, you know, this racial wealth gap is really not a new thing. i it is longstanding and it's unacceptable and as the previous witness just said, you know, there's never been a good ole days. i mean, it's always been a struggle, so we must continue to fight hard to level the playing field, and we needyi to go from thed commitments that have been made to real action in closing that racial wealth gap. there are also inequities with access to credit, especially a small business credit.sp here in houston, my district, it's 77% latino. we are the fastest growing market in the united states.
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the department of labor found that spanish-speaking americans are expected to account for almost 65% of labor force growth through 2029 and adding 7 million new workers, and as consumers, hispanics are the single largest and highest spending minority in the united states today, yet many institutions from wealth managers to credit providers have not actively sought to reach this growing market. minority depository institutions and redevelopment financial os institutions have been engaging with these markets for a while though, but they need our support. b they have received financial support from the big banks we wished they would do more which is great, but we need to make real substantive changes to make sure that we have leveled that playing field. my question is both for mr. cravins and mr. coles. going beyond financial support, what must be done to increase the presence and strength of
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mdis and dfis? how can we help this industry grow and reach the markets that largere banks fail to reach amo the peoplenk of color? >> thank you, congresswoman, for that question. as a former employee of the cdfi fund, i thank you for your focus on this. this is terribly important. large banks have been supported cdfis and partnering with e them as well, not only support but partnering on business activities. these are critical institutions. they are able to leverage the cl capital, to better serve these e communities. by statute 60 is of their activity, cdfis have to be in capital, to better serve these communities. by statute 60 -- is one of their activity. cdfi have been in the underserved communities so that as a delivery channel for spot of financial inclusion there might be no better silver bullet. so i think to be so please to
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see congress back 12 billion for capital support in the recent appropriation. bill i think is a matter of policy and vpi -- members have supported these, and a billion dollar budget for the cdfi fund would be a great start including more resources for technical assistance and for electronic sources for technology. you know, better small business development supports all of these critical channels for relief and for economic growth. and i'm so happy to see the second receiving the attention that it deserves since last year. >> thank you, mr. cravens? >> congresswoman, i really don't have much to add. i think that mr. coles hit the nail right on the head. which is why we need those types of institutions -- we would like the government to make sure that it is easier, obviously, with the right regulations to ensure -- we have language barriers, we have racial barriers, and i
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think that those organizations doing those better jobs of actually getting to the heart of the people that persistent under bank that we're talking about. >> right. from both of you, again, how could we really change, move all of these commitments that so many are making in the industry, many have made pledges and make commitments, but distribution of the funds required grants, multi year commitments, you know. what can we do to change it from commitment to real action in accountability to ensure that the owners that are committed are actually spending those in the right places? >> yes ma'am. thank you for that question. i'd say that by our accounts, many dollars already out of the door. but we did 15 billion candidate already, i recognized the need for speed. that's critical. but i think like any other
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institution, when you resource something, you budgets, you allocate resources to achieve a tactical objective. that is underway. i think the next time we meet, you're gonna see a lot more here. all i can tell you is that i've spoken to a lot of the executives doing this work at the banks. the banks are hiring executives to do this work specifically. and they're engaging different community groups, they're engaging business partners to do this work. and so, i understand the need for speed. i can tell you that these things are happening, i've seen it, i've spoken to people, and we're going to see a lot more, much sooner than expected. congresswoman, i understand the urgency here. i think that you gonna be pleased with the results overtime. >> the lady's time has expired. >> thank you madam chair, i yield. >> thank you. the gentleman from georgia, miss williams is now recognized for five minutes. >> thank you, madam chair. >> we have a lot of work to do when it comes to closing the racial wealth gap in this country and in my district, which unfortunately is at the
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bottom of the list for all cities. if we want to make significant progress on this issue, it is going to take both the industry, and governments making ambitious commitments. but even more importantly it is going to take intentional implementation of steps to reach these commitments, and consistent measurement and assessment of progress. mr. coles, can you tell me a little bit about how your members are mentoring progress and the objectives that they device to address the racial wealth gap, and how this measurement will be used to inform their plans and actions going forward? >> thank you, congresswoman. i think the bpi members are tracking according to a different buckets as the numbers of cdfi dfis, mdis, that they've engaged are part of those commitments. philanthropic commitments, and disbursements that they have made -- i think that these are areas that they've also had as part of their journey. i think those standardized metrics across the industry are certainly something that people
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are looking at. and i think that certainly there's a lot more to do here in terms of tracking and reporting. which is again, a part of the reason why in our best practices report which we submitted to the committee, we highlighted that. so i think there are some ways to go here, congresswoman. ways to go to achieve what you're talking about, but it's important, the industry recognizes the need. and i think you gonna see a lot more here. >> so, just a follow-up on that and a couple of issues that i think are key to closing the racial wealth gap, and identify how progress is measured. mr. coles, over the next year, what's in america milestones do you believe with represents officials progress towards your members goals of helping more home buyers of color get their first home and how will evolving data inform your members approach to tackling this issue? >> thank you, congresswoman. i think as i said earlier, what's gets done, more mortgages creating for black homeowners, more intentionality towards. that you will see that data improve. so again, more investments into
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mdis and cdfi, and more direct grants for down payments assistance. these are things that are going to be helpful. and i think that when you look at the data, you're going to see a lot more people in homes a year from today. >> thank you. and so, as i've explored in previous hearings that there are many racial disparities in the unbaked population, and we need to do everything that we can to address the underlying factors that inhibit access to basic financial services so that people of color can save and invest for their future. according to a 2019 survey over than half of the bank account households did not have enough money to start a bank account. about one third of an banks household cited high bank fees and unpredictable bank fees as barriers to getting bank. mr. coles, you mentioned banks are expanding their offerings of no fee, low minimum balance accounts. what numeric impact do you anticipate that this change will have on reducing the on
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banks and under banked population? >> thank you congresswoman. i hesitate to make a prediction about the numeric impact but what i can say is that with the factors that you indicated and that have been articulated so well so far, i think that with the proper amount of marketing about the existence of these products to customers i think we can see a significant debt in the millions in those that are banked under bank. i think that's partnership that will see with local governments who are also joining the outreach and communication effort around these particular types of accounts. and also, frankly, -- using investment towards that effect, adding these accounts, thanks in partnership. so there's a lot more to be done here, congresswoman. again we're on the road. >> well, mr. coles, how will your efforts use collected
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banking dana to ensure the future work to bring down those barriers in banking? >> that data is very helpful to informing decision-making and hopefully to those institutions that may be on the fence and be able to use that data to see that these products drive customer engagement. and also, have meaningful impacts on the communities that they are part of. so in addition to community impact, there's also going to be a positive business association with those accounts as well. i think the data is going to demonstrate that to business decision-makers, and make more tracking products both to the customer but also on the supply side, congresswoman. >> thank you, and thank you mister coals and all of our other panelists today. i yield the balance of my time. >> thank you. my the chair now recognizes the gentleman from massachusetts,the mr. -- thank you chairwoman for home living a hearing --
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. this subcommittee is pushed financial also to students to look closer to their customer bases in their investments. in 2020 many financial institutions and substantial investments in black communities. city bank, one billion over three years, jpmorgan 30 billion over five years, and paypal 510 million for small businesses. these investments are a start to actively gauge with communities that historically were purse fully excluded from our economy. and in my home state of massachusetts, housing has been a principle means by which black americans have been redlined from opportunity. owning a home is the single greatest driver of well for most families across the country. yet, black homeownership is at its lowest level since the 19 sixties, effectively curving the ability to raise generational wealth. some of the banks have earmarked their investment specifically for increasing black homeownership and building on the comments of my colleague from georgia, mr. coles, i would like to ask you
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how should banks measure their success in this arena specifically for increasing black ownership? what should they be doing differently to achieve their home ownership goals if they're not giving the metrics that they established? >> thank you, congressman. i think what you are seeing is a lot of activity already to support homeownership. there are partnerships with non profit groups to help provide affordable housing counseling. but also direct financial support to help people get in homes. things like helping people differentiate the cost of clothing, help like providing general grants to provide down payments. and so, you know, that data is going to improve with more intentionality. and i really want to emphasize this point. banks deploy capital, banks land to borrowers who are looking to get into homes. you know, a lot of that activity has migrated to non bank sector. but what you're seeing is intentional support for this activity by banks, both on their own, and in partnership with their and their institutions. >> mr. coles, i appreciate that
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but we are describing our the means. and what i'm pushing for here is for an outcome as multi threaded as homeownership which is a lot of things that contribute to homeownership, are there specific things that these major banks can be looking at to know that they're moving the needle? >> well congressman, i'm happy to circle back to your office on metrics specific analysis. i don't have that with me today. but you know, i think the generally, and again, being intentional, especially with financial support to help these borrowers bridge that gap, to get themselves into homes, we will see more progress, sir. and i'm happy to follow up with you on your question. >> i would appreciate partnership on that front as this is a critical issue for our district in measuring is going to be a big part of the solution. mr. cravens, i would like to direct the second electing line of questioning with you. i was struck by an expression that you used in martial plan for mainstream. i love that expression, and may
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adopt it with your permission. i would posits that with the american rescue plan funds in massachusetts, five billion for states and cities, with the upcoming infrastructure bill that we have, that we will pass transit. we have a generational opportunity for a martial plan for main street. in fact, we're doing it with president biden and with the democratic congress. are there areas that you would encourage states and cities in particular who are going to have a lot of latitude in how to spend this money at the end of the day that they should be able to direct these investments into to accomplish this martial plan for mainstream? >> thank you for the question, congressman. i would say this about adopting the name, the congressional black caucus has actually included domestic martial plan as the title piece of their jobs and justice act they have introduced over the last two congresses. so, i would simply say that you should sign on as a cosponsor, and i will let you, and support the bill. but thank you for that. i would suggest, congressman, a few things. i think the congress and the
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president, the administration is absolutely considering some generational changes. i think, you know congressman, schools, access to broadband, access to technology, they would even those things. what i'm hearing here, and i'll answer with my limited time here, whatever we do, we need to ensure that african american and minority owned businesses, not only benefit from it is recipients, but they also benefit from it as deliveries. as business people. not spent a whole time on supply diversity here today. but one way to really even things up and catch people up is delayed african american businesses participate and sell things, and buy things, and hire people. and so, would i would suggest to do use that as we continue to build in its infrastructure plan, what it will be, are we also making sure the black businesses and minority owned businesses, and women on businesses will be able to participate? >> i appreciate that answer. and i yield back my time. >> thank you for those
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questions. ranking member wagner, we have no more questions, if you have no more questions. or -- >> no, i do not. but thank you for this hearing today. and i will also say to you personally our profound sadness for you in your family at your loss of your husband. and know that you are all in our thoughts and prayers. god bless you. >> thank you, thank you so much. and, and thank you to all of the witnesses and. i'd like to thank our witnesses for their testimony today. and without objection, all members will have five legislative days within which to submit additional written questions for the witnesses to the chair which will be forwarded to the witnesses for their response. i'll ask our witnesses to please respond as promptly as you are able. without objection, all members will have five legislative days with which to submit a
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extraneous materials to the chair for inclusion in the record. i remind members that written questions and materials for the record should be submitted to the email address or provided to your offices without objection, i would like to enter statements to the record from the american bankers association, color of a change, financial services, and securities, industries, and financial markets. without objection. the hearing is now insured. it
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the secretary of the army and the army's top uniform officer testified before congress about the army's proposed 2022 budget. they were asked about systemic racism in the military, suicide prevention, the handling of sexual hard-fought cases and other issues. >> -- >> i call the meeting to


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