Transcription:
Penny Crosman (00:03):
Welcome to the American Banker Podcast. I'm Penny Crosman. Ashley Bell launched a fintech startup a year ago called Ready Life with the aim of reducing the racial wealth and homeownership gaps in this country by helping its customers show lenders that even if they didn't have the credit score to secure a mortgage, they have the cashflow. Bernice King, the youngest child of civil rights leaders Martin Luther King Jr. and Coretta Scott King, is chair of the fintech's advisory council. Bell and King are leading a group of investors that plan to buy a Utah Bank called Holladay Bank and Trust. Today we are here with Ashley Bell, who's going to tell us about this work he's been doing, his mission, why he's buying a bank and how it's going so far. Welcome, Ashley.
Ashley Bell (00:48):
Thank you for having me. Pleasure to be with you.
Penny Crosman (00:51):
Can you tell us a little bit about your formative years, your journey, what kind of brought you into all of this kind of work?
Ashley Bell (01:01):
I'm from Gainesville, Georgia, which is a small town about 55 miles from Atlanta, north by Northeast. It actually sits in the foothills of the Blue Ridge and my mother was a school teacher and music director, and my father was an engineer, and my parents were able to buy a home very early in life, probably in their mid twenties. And my parents were intentional about telling me about that journey. I think it's important to understand how, especially for them buying a home in the seventies coming out of the civil rights movement, my father fought in Vietnam, took advantage of the GI Bill, which was helpful for him, but he also was able to say that he got a down payment from family and his mother and his aunts were black women entrepreneurs that just had a very rare streak of success for the deep South in a space where it was really hard for women to own property and have businesses on their own, let alone women of color, but they were successful at it and were able to give him the money necessary along with help from a GI Bill to own a home.
(02:13)
And so that really instilled in me that to be in a rare space in the seventies of being able to do that, that being an entrepreneur was important, being able to have that self-determination and starting a business was important. And it really put my parents on the right footing. And on my mother's side, her side of the family actually owned a Black bank from 1934 to 1976 in a small town in South Georgia called Byron, which is just a really small town that actually is really close to where my family comes from. When I say come from, that means that we were in that general area of Georgia, southwest Georgia since before we were free, our family goes back to pre-Civil War. We were slaves in that area and stayed and actually started a bank called the Bank of Byron. That ultimately became a bank to finance sharecroppers, freed men and women who were looking to purchase the land of their former masters and be able to be a part of the American journey of being a capitalist. And that bank ran until the late seventies when many black banks in our country took a dive. Everybody knows the story of what Jimmy Carter inherited in the American economy in the late seventies, and unfortunately they took a hit. A third of the Black banks at the time went out of business and were auctioned off. And coincidentally, those assets ended up holding into what is now PC Bank.
Penny Crosman (03:47):
That's fascinating. I did not realize your mother's family owned and ran a Black owned bank. That is really an interesting way to be inspired in your life. So did you always have the goal of trying to follow in her footsteps?
Ashley Bell (04:09):
No more so it was her side of the family, it was her father, her grandfather, and the bank closed before I was born. So I had to hear this as stories as a kid. But like many people in the South, ironically, my family didn't talk about it that much because that Black bank, just like my father's family's businesses, they were an era where Black businesses were created out of necessity, meaning that before integration, African-Americans to receive goods and services and to receive the dignity in receiving those goods and services had to patronize Black businesses. They had to have their own in order to just be able to live. And so Black banks were incredibly important because that was some of the only places that a Black person could get credit at all, no differently than the Black dry cleaner or the restaurant or the goods store.
(05:05)
And so post-integration across all sectors, you saw drastic decline in those businesses because African Americans had more choices and it became a part of integrating was to spread your dollar around to create that influence. And that became very apparent in the civil rights movement because the withholding of the Black dollar for white businesses, no matter where they were, was an economic tool for justice. And so that narrative became a big part of what the struggles were for Black businesses. And so that bank going out of business was something I knew about and something that when this opportunity came around for Dr. King, and I definitely wanted to lean into that legacy. And she and I shared that because her grandfather, Danny King, Martin Luther King Sr., actually was one of the founders of Citizens Trust Bank, which is one of the oldest banks in Atlanta. And so we shared that family history and definitely saw this as an opportunity to pick up a legacy that both of our families were affiliated with.
Penny Crosman (06:05):
So tell me a little bit about Ready Life, where the idea for that came from and what you're doing there.
Ashley Bell (06:15):
Well, I was happy being a partner at the world's largest law firm. I was a partner at Denton's. And like many Americans and especially people that are sensitive to the ties that were happening in our country in 2020 post George Floyd, I think a lot of us looked at ourselves differently and thought, what could we do to be a part of America not missing this moment and hopefully try to create some change that could last beyond the upheaval? It was a special time in America being in the middle of the first pandemic in a hundred years and the greatest civil unrest in our nation since the summer of '68. And I think that for me it was, do you step away from practicing law to take this risk, to do something that you truly believe in, which is, this is a moment for us to take advantage of this heightened awareness of the plight of people of color in our country.
(07:12)
Corporate America and banks were really leaning in that moment to figure out how they could be helpful and be a part of what's next. And I felt like they couldn't do it on their own. You can't ask corporate America to fix a problem that they really don't understand and that the people from the communities that are disadvantaged and are hurt the most should gather the resources and gather the best ideas and the best people and band together and partner and figure out how we can do this together. So Ready Life was originally contemplated by Dr. King and I with the founders of Figure, June Ou, who was the original CTO of SoFi, and her husband, Mike Cagney, the original founder of SoFi, and some of the banks through Jam FinTop, which is a consortium of, at the time, 60 banks that are mid-tier.
(08:03)
We're not talking big banks, we're talking banks between $25 billion and $100 billion at the time. And we put our heads together and tried to figure out what this could look like. And ultimately Ready Life becomes to our customers a banking app where people in marginalized communities can bank with us so we can help them underwrite mortgages using cashflow. But our customers are also banks. Banks see us as CRA-as-a-service. And I think that's important because what we do for the banks is we help them meet their CRA needs. So what Dr. King and I try to highlight is how important a Community Reinvestment Act can be and how underutilized a tool it really has been. And so the banks that we partner with, and now as we're rolling into our first year of having set the company up, having got the technology, having have people on our platform building histories with us, we've had just an amazing run of a myriad of people supporting our efforts, from the banks to Alice Johnson who is on our advisory board, who's just a great story of someone who was spending a life in prison but wanted to get out and try to do something to help people get a second chance.
(09:20)
And I think that's what really we're focused on, is giving people a second chance at home ownership. All the way to people like Kim Kardashian that tweeted out our TV commercial the first day it came out, which got us hundreds of thousands of views all across the board. All that's been important, but before the key to this, the only way it works is that the banks need a partner, a community trusted partner to help them think through their CRA needs. And what we do is banks come to us and they say, look, here are the assessment areas where we're having problems doing loans and these areas where they're having a hard time are usually Black and Brown people and women in these assessment areas that they can't figure out how to generate the activity necessary to meet their CRA needs.
(10:04)
And that's right up our wheelhouse. Having a company with the credibility that we have with the leadership that we have to be able to say, we can help you go into this area. And we have customers that have been banking with us and we've been building all year long, help us help you. And what that looks like is the banks are able to say, here are the programs I have for the mortgages. And some of our people in this area are just a little bit off from being able to meet these buckets. And we say, look, we have data on these companies that says, look, if they're paying $3,000 a month in rent, then why can't we figure out a way for them to pay $2,500 in a mortgage? And let's use the fact that they can show that they're paying their rent on time, that they can show that they're paying their utility bills, that they're paying their transportation to work, that they're direct depositing so we know that they have verified income.
(10:57)
Let's meet somewhere else in the middle and maybe take this information to get them over a hump. If that fits them into a bucket of mortgages that you have already, great. But if we got to create something new and you know that by originating this mortgage, you'll get CRA credit for it, maybe it's worth your bank doing and taking a chance on people that we believe because they pay rent on time. And if you get them a mortgage equal to or less than that rent amount that they should be successful when you wrap them with the right financial literacy, you give them them attention. They need to make sure they're successful. And I think we're starting to see the banks really see this as an opportunity, especially those mid-tier banks, the banks that are in that space of the banks that originally invested and ready from.
Penny Crosman (11:41):
So I know because I read it in the Wall Street Journal that you are in the process of buying a Utah bank called Holladay Bank and Trust in the Salt Lake City area. How did you choose that particular bank?
Ashley Bell (11:58):
Well, I think it was more about choosing the set of circumstances and Holladay was a great example of those circumstances. I think for us, when I say us, we are excited about the fact this particular acquisition has had intergenerational support amongst African-American business leaders across the country who fundamentally believe that there needs to be a next generation of Black-owned banks, all of our traditional banks. And as you know, and you guys reported on this, Dr. King and I created a foundation that supports all of the Black banks and has really leaned into sports and entertainment. You guys covered the Atlanta Hawks deal that we did right after George Floyd, and since then we've done over $900 million of deal flow through Black banks by creating a Black syndication that we know intimately the challenges that Black banks face every day. And we felt that some of those challenges are just part of the narrative of being a Black bank.
(12:57)
You're going to be in a community where the rules that they are tell you that the folks that you lend to, you should charge higher interest rates for. But Black banks have to walk a tight rope line of not overcharging, being predatory on their own people, but still try and still be profitable. That's a very hard line to walk, and that's why we only have 20 Black banks today when we had over 130 the day that my co-founder, Dr. King's father was assassinated. That decline is drastic. And it's really because those banks are so fragile. Every time America has a downturn, African-Americans are the first to get fired. And when the economy bounces back, the last to get hired back. And that economic fluctuation is what hits these banks the hardest. And that's why every time we have a downturn, we lose almost a third of them.
(13:49)
And I know that personally because my own family's bank was lost in that third, that got wiped out in the late seventies. So we've seen it. We felt it. And so this particular bank was our attempt to change the face of ownership in this country to try to do something that hasn't happened before, which is Black investors and business leaders coming together to buy a bank that's not Black owned, that is in a different community that has a different economic base. And the experiment was, how would that be received by people who don't look like us, who maybe have never gone to church with us, gone to school with us, prayed with us, or seen us in any close proximity. And it was a risk. And I think that we did everything we could and we're still doing everything we can to continue to earn the trust and support of the local community.
(14:37)
And we've seen tremendous pockets of support that have helped us get to this point. So when we talk about the circumstances, it's not really about Holladay, it's about one, the state of Utah being the number one state for banking, Utah is to banking what Delaware is to corporations. It's the place you want to be if you're going to do banking, especially if you know that technology is going to be a critical piece of your structure. Two, it's Salt Lake City. It's just a phenomenal place for tech and it's just a great place to do business as well. And so when we found Holladay, we said, well, this gives us a chance to buy a bank. That is what cost us the same amount of money to purchase is if we chose to go de novo. But we thought we had an advantage by getting a bank that has 40 years of track record with the regulators of being a solid and sound bank.
(15:32)
It's not distressed in any way, but it's in a great location and has a solid footing. So once we were able to work with the family that owns it, to secure the local staff to stay on with us, I think that's key because if you're banking at a community bank and people who in the community bank space know this, if you're not at a big bank like a Wells Fargo or JP Morgan and you choose to bank at the local bank, it's usually because somebody there on a first name basis, the tellers, the lending officers, the people who, and once we were able to secure the employment contracts that everybody there who's key could stay on, I think that really helped bridge the divide. That could have been interesting. Obviously when people read about our acquisition in your paper and others, people will call the bank and say, well, what does this mean?
(16:28)
It's a little different to be in Salt Lake City and one day wake up and find out your bank is becoming a Black owned bank or an MDI. I could imagine that could be a little head scratching for some people to say the least. But I think when people realize that, oh, well, they came in and the first question they asked our staff was, well, are you guys going to have a job? And they said, yeah, Ashley and Dr. King came and sat down with us, told us their vision for the bank, gave us all extended contracts. So we're not going anywhere. You're going to still have the same community bank partners that you've had, but they're also bringing additional capital to the table and they're bringing additional services so it's only upside for our customers. And you got the same friendly faces, you just get more faces on top of that.
(17:11)
And so that's really what community banking is about, and that's why we've been able to draw tremendous African-American business support from the likes of Robert Smith. I mean, Robert Smith is the richest African American in the country, and he's one of our key investors all the way to the guys from Earn Your Leisure, which are the new trendy financial literacy tandem that's pulling together the rap in the hip hop industry and leaning in and educating a whole new generation of people on all the ins and outs of finance and banking. And so when you have all these folks from different industries, Black doctors, Black lawyers, from all of these different sectors, everybody wants the same thing. They want a Black-owned bank that they know supports Black entrepreneurs, that they know is going to give them the level of concierge service that they would expect at any other bank. And we think we can deliver that. We are in a unique position right now, and Utah is where we really want to focus. Holladay was the target because it was a solid bank in the right location. And we recognize that this is unique, but we've been welcomed with open arms in Utah and are leaning all the way in.
Penny Crosman (18:23):
And does this fit with that mission of closing the wealth gap or is it sort of a diversification, if you will, of that?
Ashley Bell (18:34):
It's both. It's both. That's a great question. It's being able to show that the right team with the right vision, no matter what color you are, should be able to go anywhere in this country and do what you do best no matter what the industry. And it's a great testament to the state of Utah and the people there that they're welcoming and they see that we're bringing a good idea and they've embraced it. And so how do we reach, I mean, because the bank has to meet the criteria of being an MDI. And that's the two criteria. And the first one is you have a majority Black board. And obviously we're able to do that with some really fantastic names that have joined us. And I had mentioned earlier all the work to be doing in sports, but we're really thrilled to have people on our board like the CFO of Major League Soccer, Sean Prendergast, who is someone that's helped Black banks do unique historic deals.
(19:39)
And we were able to get permission from the MLS to have him sit on our board. And that's huge for us being a small bank with the CFO of a growing league, like Major League Soccer. And when you look at even the NFL, we were able to get permission from the leadership at the NFL to get their Chief Technology Officer, Gary Brantley, to sit on our board. So to be a small bank with two senior executives of the two big leagues of sports in our country, to sit on a small community bank board in Salt Lake City is huge. And then you add to that longtime Black bankers like Lenny Springs, who was one of the senior execs at Wells Fargo for years, and people like Yolanda Daniel, who was a regulator at the Federal Reserve of Chicago, a Black woman who has been in this business for a long time, and these Black business owners who all want the same thing, who wanted to create a bank that they think is home for them.
(20:37)
But Utah helps us reach every African-American wherever they lay their head, and that's what's critical, being able to have a regulatory environment and a place where we can capitalize a bank with the right technology to deliver high level of service, whether you live in Oakland or the suburbs of Detroit or Atlanta or Houston, we think this is a unique opportunity to reach every African American across the country where they are with the services they need, especially the Black entrepreneur. And ultimately, that is why we think this is unique. We aren't bound by the old rules. Most of our Black banks were birthed out of the church or they're across the railroad tracks, they're off MLK, and they do the hard work. But this is different. We have no choice but to go get those customers from other locations, and it forces us to deliver a level of service to say we have to be able to compete at a high level to get those entrepreneurs to lean in. And that's where our investors are who they are because they know that we can do that, and they're going to hold us accountable.
Penny Crosman (21:41):
So will Holladay have a nationwide mobile banking, online banking presence, or will Ready Life become the digital bank part of Holladay?
Ashley Bell (21:57):
Well, the first thing we have to do is get Holladay its own infrastructure. And I do think in the horizon that it is critical to have a conversation. I mean, absolutely critical to have a conversation about there being a Black-owned bank that has the ability for fintechs to sit on top of that. So for example, if you look at a Ready Life or you look at a Greenwood, any of these African-American owned fintechs, all of them are mission-driven and doing the hard work of reaching a community of underserved people. However, there is not one Black owned bank with the technology for them to partner with. So if you're banking with Ready Life or you're banking with Greenwood, you're banking with Mofi, any of these banks, your money is being held at a bank that's not an MDI, that's not Black owned.
(22:53)
And that's because it just doesn't exist in the marketplace. So should it? Absolutely. Really, with the advent of fintechs and Cash App and Venmo, it absolutely makes sense that if I'm on Martin Luther King Jr. Drive in Atlanta, and I'm one block away from a Black owned bank, and my barber tells me he wants me to pay him $40 for a haircut, I'm sending $40 on Cash app because that's what he uses every day because he's a gig economy entrepreneur. I just shipped that $40 out of my wallet from a Black owned bank to a non-Black owned bank, and that money has escaped the ecosystem of the Black community. It's gone. It's now in another bank that's not being held in the community. We should be collectively thinking about solving for that because the more time you can keep that money in the community, the more jobs you create, the more opportunity you can create. So there's absolutely a conversation that has to be had about there being a Black owned bank that can support financial technology tools, especially for the gig economy worker, because that is where things are trending, that is where the Black economy is going, the rest of the economy is going. And so having an institution that can support that economy is critical to going forward.
Penny Crosman (24:02):
Fascinating. It's a very interesting story and an interesting mission, and it does seem like you're doing something unique that I don't know that anybody else quite has this model, especially with having big sports figures involved. It's very, very interesting. And you're going to call the new bank Redemption Bank, is that right?
Ashley Bell (24:24):
Yes. Yes. The name of our holding company is Redemption Holding Company. It's something we feel really strongly about. It's something Dr. King and I feel all of our work from the work of helping the existing Black banks reach that last mile of entrepreneur. The work that Dr. King has been doing is the legacy of her parents and making sure she continues her legacy of being an advocate for the least the last and left behind in this country. All of this work is redemptive. All of this is trying to redeem a people that deserve it, that need a chance, that need some way of having opportunity despite their circumstances, despite where they live. And we felt like this is that chance for us to build an institution that may have been birthed out of the wake of George Floyd, but will outlive this moment and be something that we can look back on as an anchor of opportunity for years to come.
Penny Crosman (25:20):
Well, Ashley Bell, thank you so much for sharing your story with us today and to all of you, thank you for listening to the American Banker Podcast. I produced this episode with audio production by Kevin Parise. Special thanks this week to Ashley Bell, CEO of Ready Life. Rate us, review us and subscribe to our content at www.americanbanker.com/subscribe. For American Banker, I'm Penny Crosman and thanks for listening.