Wells Fargo to Invest in African American Owned Banks, Savings & Loans

SAN FRANCISCO--(BUSINESS WIRE)--Wells Fargo announced that it is seeking to invest up to $50 million in African American Minority Depository Institutions (MDIs). These investments are part of Wells Fargo’s commitment to supporting economic growth in African American communities where MDIs, often community based banks, provide mortgage credit, small business lending, and other banking services. Wells Fargo commends Congresswoman Joyce Beatty and Congressman Gregory Meeks for recently sponsoring legislation to enhance MDIs and these investments in African American MDIs will support the spirit of that legislation.

“Our industry is stronger when we work together, shepherding resources for underserved individuals and small businesses to create economic opportunities that will strengthen the long-term success of communities,” commented Jonathan Weiss, CEO of Corporate & Investment Banking and Interim CEO of Wealth & Investment Management at Wells Fargo. “MDIs are a key part of the lending ecosystem for underserved communities, playing an important role in neighborhood revitalization, and we look forward to helping African American MDIs grow, serve their communities, and expand their sphere of influence by providing capital, connections and expertise.”

MDIs play an important role in providing banking services to minority and low and moderate income (LMI) communities. Compared with other financial institutions, MDIs tend to serve communities in which a higher share of the population lives in LMI census tracts and in which higher shares of residents are minorities.

This investment complements Wells Fargo's Diverse Community Capital (DCC) program, a five-year, $175 million program to empower diverse small business owners with greater access to capital and technical assistance so they can grow and sustain local jobs. The DCC program is a collaboration with Opportunity Finance Network and CDFIs (Community Development Financial Institutions) across the country. To date, the CDFIs in the program have made 124,000 loans, delivered 322,000 hours of technical assistance, and benefited 49,000 small business owners who collectively sustain more than 183,000 jobs in rural and urban markets nationwide.

About Wells Fargo Wells Fargo & Company (NYSE: WFC) is a diversified, community-based financial services company with $1.9 trillion in assets. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, investment and mortgage products and services, as well as consumer and commercial finance, through 7,400 locations, more than 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 32 countries and territories to support customers who conduct business in the global economy. With approximately 260,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 29 on Fortune’s 2019 rankings of America’s largest corporations. News, insights and perspectives from Wells Fargo are also available at Wells Fargo Stories.

USDA Gave Almost 100 Percent Of Farm Bailout To White Farmers

Last July, the Trump administration announced a major new subsidy program designed to help farmers weather America’s ongoing trade war with China. That initiative—dubbed the Market Facilitation Program (MFP)—has become the single largest source of subsidies for farmers.

While many writers have documented the struggles of farmers affected by the trade war, few have scrutinized the distributional effects of the MFP. The Environmental Working Group (EWG) has documented that the program has disproportionately helped wealthy landowners and a recent analysis by Donald Carr, a senior advisor for EWG, argues that the MFP has deepened the disadvantages of black and minority farmers.

Data obtained from a Freedom of Information Act (FOIA) request showed that the MFP has almost exclusively benefitted white men and their families, who appear to be disproportionately upper middle-class or wealthy. These payments further entrench already drastic inequalities in agriculture, along racial, ethnic, gender, and class lines.

Similar to other USDA subsidies, the MFP has overwhelmingly favored white and male producers. We recently received data from a FOIA request that show the department has funneled more than 99 percent of bailout funds to white operators.

As of today, USDA has distributed more than $8.5 billion to farm operations through the MFP. Of the approximately $8 billion distributed to operations whose owners’ race could be identified, 99.5 percent went to white business owners. Of the more than $6.8 billion distributed to operations in which the owners’ gender could be identified, more than 91 percent went to male business owners. “White farm operators” here includes white Hispanics, but they only account for about 0.1 percent of the total. In other words, non-Hispanic white operators received 99.4 percent of all MFP payments.

The racial disparities are just as stark in states with sizable non-white farmer populations. In Mississippi, for example, where 38 percent of the population is black and 14 percent of farms have a black principal operator, according to the 2017 Census of Agriculture, only 1.4 percent of the $200 million distributed to farmers through the MFP went to black operators.

Not only did almost all of the funds go to white operators, but an overwhelming share of the funds appear to have gone to upper-middle class and wealthy families. The average family that produces soybeans has a much higher income—and a lot more wealth—than the average family in the U.S. But a disproportionate share of MFP money has been paid out to families operating large-scale farms, who have even more wealth.

These disparities are the result of historical and recent discrimination. The federal government played a role in withholding farmland from, and dispossessing, farmers of color, especially black and Native American ones. And as we documented in a recent article, USDA has done little to address its atrocious civil rights record. The MFP continues to exacerbate these racial inequalities today.

[SOURCE: FARMBILLLAW.ORG]

Black Unemployment Rate Hits Seven Year Low

The unemployment rate for black Americans fell below 10 percent in April, for the first time since the economic downfall in 2008.

During the recession, black unemployment had peaked at 16.8 percent in March 2010, while unemployment for whites was almost half that rate. This past April, the unemployment rate for African Americans dipped into the single digits category at 9.6 percent. While the latest data shows signs of improvement, it’s clear that an employment gap still exist between races. Despite the national unemployment rate falling to 5.4 percent, blacks in states like Illinois, Michigan, California and Pennsylvania face unemployment rates above 12 percent.

Read more: Black Unemployment Rate Hits Seven Year Low

Country's black-owned banks are in a fight for their survival

Black-run banks are in a fight for survival, even though many advocates argue that many African-Americans remain starved for banking services.

The Federal Deposit Insurance Corp. counted 25 black-owned banks remaining in the country last year, down from 48 in 2001. That decrease came as the overall number of minority-owned banks increased slightly, going from 164 to 174. In addition, the majority of black-owned banks that remain open are on shaky ground and struggling to hold on in the face of the economic devastation that has ravaged many of their customers.

Black-run banks have been struggling for years, as mainstream institutions increasingly picked off their best-heeled customers. The increased competition came amid what some call a string of strategic blunders.

The banks, historically headquartered in the heart of traditional black communities such as Chicago’s South Side, New York’s Harlem and Washington’s Shaw, failed to modernize their services. Few offered the branch networks, computerized banking and other automated services that have come to dominate the business.

Taken together, black banks control $5 billion in assets, a tiny fraction of the size of the nation’s banking behemoths, such as Wells Fargo, which by itself has some $1.7 trillion in assets. Black banks tend to be small even by the standard of minority-owned banks, which as a group had some $181 billion in assets at the end of 2013, according a FDIC report.

Read more: Country's black-owned banks are in a fight for their survival