As the financial industry strategizes about how to inspire a diverse pool of millennials and Gen Zers to commit and add value to the industry, it first must realize that it has a public relations problem.
So says Derrius Quarles, the co-founder and CEO of Breaux Capital, the first fintech company advancing the financial health of Black millennials with social banking—a combination of software and community. “And unfortunately, I don’t believe it is a PR problem that can be fixed by purchasing more catchy commercials and issuing press releases about social responsibilities,” said Quarles, author of the book, "Million Dollar Scholar: Winning The Scholarship Race."
Quarles, 29, was one of several speakers at the annual Conference of African American Financial Professionals last week. The virtual conference, which focused on the wealth gap in African American communities, was hosted by the American College of Financial Services.
Quarles said if the financial services industry wants to advance diversity and motivate the emerging generation of financial services professional, it must decide now what the culture of the industry will be.
As team members, as individual investors, as institutional investors, as companies and as an entire industry, we have to ask ourselves who do we want to be,” Quarles said. “Will we be the industry that says out of our mouths 'Black Lives Matter,' while at the same time only being moderately discontent with the downright immoral track record many of our most prominent institutions have had with investing in Black neighborhoods?”
Quarles cited a joint report in June out of his hometown, Chicago, by WBEZ and the nonprofit civic media organization, City Bureau, which revealed that between 2012 to 2018, lenders in Chicago collectively invested 8.4 times more money in white neighborhoods than Black neighborhoods.
The difference was even starker for the largest institutions such as JP Morgan Chase, which doled out 41 times more loans to whites, which meant for every dollar the bank loaned in white neighborhoods, it invested just 2.4 cents in the city’s black communities. Bank of America invested 29 times more in white neighborhoods than it did in Black neighborhoods, while that number was 13 times more at Guaranteed Rate and 10 times more at Wells Fargo. The report also pointed out great lending disparities in Chicago’s Latino communities.
“I am personally enraged by this report, but does this enrage us as an industry? What does it say about the culture of our industry if it doesn’t enrage us?” Quarles asked, noting that such practices are not limited to Chicago.
The report, which led to protests and temporarily disrupted the banks’ business hours, led to the barring of the organizer from all Chase properties and as a customer. Quarles also noted that Chase also threatened legal action instead of trying to facilitate a conversation to promote equity.
Quarles excoriated the industry for being “comfortable with silencing those who place the spotlight on historical policies that should make us uncomfortable. It seems that we would rather fight the truth than face it,” he said.