Bank CEOs must make good on their pledges to advance racial equity

Stefani Reynolds/Bloomberg

Banks back in 2020 pledged billions of dollars toward racial equity and closing the wealth gap, while their CEOs expressed solidarity with the Black Lives movement following the tragic murders of George Floyd and Breonna Taylor. As of today, more than three years later, as these banks work to dismantle policy that would advance economic and racial equity, Black, Indigenous and other people of color are left to wonder if their policy stances will match their pledges. 

During this period, three major banks made significant financial commitments toward either closing the racial wealth gap or advancing racial equity. JPMorgan Chase pledged $30 billion toward the cause, Bank of America pledged $1.25 billion over five years, and Citibank pledged $1 billion to fund racial equity. The CEOs of banks made broad statements of solidarity with the movement including Brian Moynihan, CEO of Bank of America, who on June 2, 2020, said: "The events of the past week have created a sense of true urgency that has arisen across our nation, particularly in view of the racial injustices we have seen in the communities where we work and live. We all need to do more."

Although the banks' financial commitments are commendable and the statements from their CEOs admirable, the actions from their lobbying arms over the past year have undermined the authenticity of these efforts and have run contrary to advancing racial equity and closing the racial wealth gap in tangible ways.

Take for instance the 2022 lawsuit filed by the banking industry lobbyists the American Bankers Association, the Consumer Bankers Association and the U.S. Chamber of Commerce against the Consumer Financial Protection Bureau, where they not only argued to stop the CFPB from examining banks for noncredit discrimination as unfair and deceptive but went so far as to argue the CFPB's funding structure is unconstitutional. The ABA and the Independent Community Bankers of America also supported the Texas Bankers Association's challenge to the Section 1071 small-business lending data-collection rule. And a potential lawsuit to dismantle the banking regulators' soon-to-be-finalized Community Reinvestment Act rule exists.

It's unacceptable to profess a commitment to racial equity while actively working to dismantle the most significant public policies aimed at narrowing the racial wealth gap. The hypocrisy of these actions cannot be understated.

The words and pledges from the banks need to be heavily scrutinized against their actions. That's why our organization decided to ask bank CEOs to live up to their racial equity commitments and denounce the policy stances taken by their lobbyists in a letter endorsed by more than 100 community organizations.

The letter, which was sent to 45 bank CEOs ranging from the "Big Four" banks to the $22.5 billion-asset Washington Federal Bank, consisted of four yes or no questions including: "Is the bank's position that (noncredit) discrimination is unfair and deceptive?", and "Does the bank support the Section 1071 Rule?"

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So far, only 11 of the 45 recipients have responded to the letter, which was sent to them in August. We find this response rate unacceptable, and even more so, indicative of the hollowness of their statements. More concerning, only seven of the 10 respondents — Beneficial State Bank, East West Bank, HomeStreet Bank, PNC, Amalgamated Bank, Pacific Premier Bank and Capital One — directly addressed the questions we posed.

The fact is: Banks have failed to address racial equity in the financial industry since making those statements and pledges. A 2022 report by the Roosevelt Institute, which used secret shoppers to conduct more than 100 on-the-ground visits to banks across California, exposed the disturbing failures to adequately serve Black and Latinx customers as well as Spanish-speaking customers. In many cases, these customers were either turned away by bank tellers or neglected altogether. This is the very kind of discrimination that the CFPB is seeking to root out, and that the banking trade groups are fighting to prevent the CFPB from searching for. We ask: How is this a commitment to advancing racial equity?

We've been waiting for three years for banks to make good on promises to advance racial equity and close the racial wealth gap. Yet we've seen little action in this regard. The fact that they have not responded to our letter and our concerns shows that they have no regard for the people who have been most harmed and excluded by the banking industry. We're looking at Bank of America, Wells Fargo, JPMorgan Chase, Goldman Sachs, Citibank and U.S. Bank, all of which made racial equity commitments and have representatives on the Consumer Bankers Association board of directors. It's high time for bank CEOs to back their words with actions.