Top Quotes: “The White Wall: How Big Finance Bankrupts Black America” — Emily Flitter

Introduction

“White Americans hold, on average, almost $1 million in family wealth compared with an average of just $143,000 for Black American families — less than 15 percent of white families totals. The size of this gap was largely the same in 1968, just as some of the civil rights eras landmark antidiscrimination laws were going into effect.”

“The consequences of ignoring the racial wealth gap are widespread and dire. Economists estimate its presence will sap the U.S. economy of between $1 trillion and $1.5 trillion over the next ten years, thanks to lost consumption and investment.”

Banking

“There was another feature of the JPMorgan Chase “Please Use Caution…” emails that highlighted the difference between the way bank branch employees see Black customers and white customers: In the case of white customers, race did not seem to merit a mention. Often, the people described in the “Please Use Caution…” emails had had their driver’s licenses scanned by bank employees, and in those cases images of their identification documents were attached to the warning emails so that anyone reading them could see exactly what the potential fraudsters looked like. This made it even stranger that the Black customers among them were described as such. Why bother providing a description of someone whose photo was attached anyway? It was something that seemed to happen to Black customers more often than white customers, at least in the cache of emails I reviewed, which were secretly provided to me by a Chase employee who felt uncomfortable with the way other employees seemed to routinely profile Black customers.”

“He expected to be in and out of the bank ar the dealership in a matter of minutes. It was fortunate really, that he was going to the bank today, since he had been meaning to move some money from his own account into his mother’s anyway. He intended to take care of both things at once.

Jabari wasn’t dressed in a suit. Since car buying was his main activity for the day, he was dressed exactly the way he wanted to be, in baggy pants, with a cloth tied over his hair. Comfortable, relaxed, casual. But to the bank branch employees his look said something else.

Tall African American male in baggy white pants and a durag… Would that have been the “Please Use Caution…” version of Jabar’s figure? We’ll never know. But there is no doubt that the Wells Fargo employees were suspicious of him.

“I’d like to withdraw some money,” he said to a teller, explaining that he wanted to move $10,000 into his mother’s account and take out $6,400 in cash for himself. At first the teller — a white man — who took Jabari’s driver’s license from him in preparation for processing his request showed little enthusiasm for helping him. He walked away with Jabari’s license, was gone for a minute, returned to the window, and handed Jabari the license.

“We’re unable to complete this transaction at this time,” he said.

“What?” Tabari said in disbelief.

“There was an issue with your license.”

“What issue?”

“Your license is from another state, it doesn’t match up your information,” the Wells Fargo employee said.

“I can explain,” Jabari said. He knew it was a little complicated: He had gotten his driver’s license in souri while studying for a commercial trucker’s certification. He had not yet changed it to reflect his new ware address, since he’d only arrived in the state a couple of weeks earlier. But the banker didn’t want to hear it.

“I’m sorry,” he said. “We can’t verify your identity. This transaction cannot be completed.”

“But I can answer questions, take me in a back room, away from the other customers, ask me what my last transaction was. When did I get that amount of money put into my account. Ask me — ”

“Sir, I’m going to have to ask you to leave the bank.” the employee said.

Stunned, Jabari walked back out the front door empty-handed.”

“The Civil Rights Act of 1964 lists specific businesses that may not treat Black customers differently: movie theaters, hotels, restaurants, and performance and sports venues. Federal courts in some parts of the country have held that because the law identifies the kinds of businesses to which it applies, those not on the list, such as banks, cannot be held to it. That loophole makes it hard for victims of racial profiling to win in court.

There is an additional limitation. In 1866, just after the Civil War had ended and the Thirteenth Amendment abolishing slavery in the United States was passed, Congress created new laws to establish rights for Black Americans, including one giving them the right to enter into agreements to buy goods or services and have those contracts enforced. Some courts have since ruled that the law requires only that service be granted eventually, even if there is a delay or an extra difficulty. According to these rulings, the 1866 law does not guarantee equal treatment for everyone in the course of doing business.”

“…In Memphis, Tennessee, where two-thirds of the population was Black and where BancorpSouth got the most requests for mortgages compared with any other market in which it operated.

Memphis’ demographics might have suggested that the best way to do business would be to try to win over Black people who made up the majority of Bancorp-South’s potential customers. But the bank did the opposite. Its leaders had located its branches in parts of the city where Black borrowers were not likely to venture. It had also directed its advertising to white potential customers, studiously avoiding reaching out to Black customers. And, as federal authorities would claim in a 2016 lawsuit, it had given its loan officers broad discretion about how much to charge mortgage borrowers in annual interest. These officers routinely charged the few Black borrowers who did manage to get loans from the bank higher interest rates than white borrowers.”

“One loan officer attending BancorpSouth’s 2012 meeting joked that they —meaning Black borrowers — “need to get their credit up” and to “stop paying their damn bills late.” Another loan officer observed that everyone in the meeting was white, to which the manager leading the meeting replied: “I’m sure I’ll hear about that soon, too. I’m looking. I don’t know where I’ll put one, but I’m looking.”

“Don’t use the N-word!” someone called out.

“What’s up, n*ggas!” someone else shouted.

The room erupted in laughter.

This scene, secretly recorded by someone in the room that day, came back to haunt BancorpSouth when the Consumer Financial Protection Bureau took it to court in 2016 over its treatment of Black bank customers. The bank paid nearly $11 million to settle allegations that it had engaged in widespread discrimination against Black customers not only in Memphis but in other areas where it had branches as well.

It turns out the CFPB’s work to bolster its case against BancorpSouth did not stop there. Officials revealed that they had sent people posing as potential mortgage borrowers — “mystery shoppers” — to various branches of BancorpSouth to test whether the bank was discriminating against Black mortgage borrowers. The findings were grim. In one instance, two undercover investigators posing as customers visited the same loan officer at a branch in Madison, Alabama. One “customer” was white, the other Black. Both professed to be first-time home buyers, but the Black customer had a higher credit score and a higher salary than the white customer did. Nevertheless, the loan officer offered the Black customer a smaller loan with a higher interest rate.”

“The Federal Deposit Insurance Corporation has found a “substantial” difference between the number of white bank account holders and the number of minorities with bank accounts; as of 2019, less than 3 percent of white Americans lacked one, while the percentage of Black Americans with no bank account was closer to 14. The FDIC’s 2019 survey also found that, among the households that did have bank accounts, Black people were less likely to make in-person visits to bank branches than white people were, and they were less likely to rely on loans from banks to conduct the day-to-day business of their lives.

One reason for this discrepancy that is captured particularly well by the mystery shopper method of research is the striking difference between the way bank employees often treat Black and white customers.”

“Two years after my Wells Fargo story came out, I spoke with Susan Shin, legal director of the New Economy Project, a New York-based group that tries to help local residents navigate the financial system. The group had for years received a steady stream of calls from people describing the same sequence of events I had detailed in my story: Bank abruptly closes account, pursues customer for continually mounting overdraft fees, threatens customer with exile from the banking industry.

“When I read your story I felt like you’d been living in my head,” Shin told me. “We see that all the time here.” She added that all the people who had called New Economy for help had been non-white. Nothing they had tried could convince their banks to stop charging them more and more overdraft fees after closing their accounts. Shin said she had felt that race played a part in banks’ willingness to stick to their positions and show no mercy by reducing or waiving the fees. “It’s hard to quantify that, but that’s been our experience,” she said. A national survey of banks conducted in 2021 seemed to bear out her observations when it found that, across the industry, Black and Hispanic account holders paid more than twice as much in fees on their accounts as white account holders did.”

“Black women in the Washington, DC, area were much more likely to be asked by bankers about the names of their businesses and how the businesses were registered, as if they might not be legitimate or desirable. They were far less likely to be offered help applying for a small-business loan. Overall, the survey found that Black women did not get the same encouragement or information as the other groups. The difference was so large that the researchers concluded that the way they were being treated by the banks — which were never identified by name in the published research — could violate the Equal Credit Opportunity Act of 1974, one of the federal laws that was enacted to outlaw redlining.

A separate survey by the same organization sent mystery shoppers to 160 different branches of 32 banks in the Los Angeles area and found that in almost every area of interaction the testers measured — all the way down to the warmth of bank employees’ greetings, the information they asked for in order to help customers, and the advice they gave — white men got preferential treatment. The bankers did a poor job in any case explaining what small-business loans were available to potential borrowers, but Black and Hispanic customers got the most muddled, least complete information.

Most crucially, bankers shared with white would-be borrowers important details about the small-business loans they could get, including what the interest rates were likely to be and what kinds of fees went along with the loan.”

“Sierra’s experience is yet another recent indicator that mistreatment of Black customers does not stop at a particular income level. Even the wealthiest Black customers can struggle. And I don’t just mean wealthier customers. I mean the wealthiest.

In 2016, journalist Tanzina Vega chronicled the experiences of the “Black 1 percent,” the tiny subsegment of the absolute wealthiest Americans who also happened to be Black. At the time of publication, qualification required roughly $7.9 million in wealth, a figure that meant just 1.7 percent of the 1 percent was Black. Among those viewed was Sheila Johnson, a cofounder of the TV network Black Entertainment Television. In 2005, years after she had successfully launched BET, with a fortune worth hundreds of millions of dollars, Johnson sought to start a luxury resort business, and she found she could not get a bank loan.

“There were people out there that said ‘You don’t know what you’re doing. You’re an African-American woman. You don’t know about the hotel business. It isn’t going to work. I’ve never seen anybody Black do anything that has excellence,” Johnson said in an interview for Vega’s piece, which aired on CNN.”

“The federal government designed an operation, the Paycheck Protection Program, to deliver aid to struggling Americans and small businesses by entrusting nearly $1 trillion to the country’s banks and leaving it up to them to distribute it.

Congress designed the program so that the distribution process mimicked the steps of obtaining a bank loan. Business owners had to find a bank that would examine paperwork showing their employee head count, overhead costs, and other activities and make them a loan, knowing that the bank would then immediately submit the paperwork to the federal government’s Small Business Administration, which would afterward give the bank the equivalent sum of money so that the business owners would never have to actually make any repayments as long as they met certain conditions for how the money was spent.”

“In reality, the consequences of relying on the banks were dire for Black business owners across the country. Years of past encounters with banks suddenly took on new significance.

During the earliest days of the PPP’s existence, I met a young woman, Yasmine Young, who owned hei hair salon in Baltimore. No one had called the cops on her or thrown her out of any bank branches, but in 2016, soon after opening her salon, she had tried to get a business credit card from Bank of America and had been discouraged from even submitting an application. Even though she had her business checking account at Bank of America, she had to get a business credit card from one of the bank’s rivals, Capital One. That move had consequences she could never have foreseen. In April of 2020, when she asked Bank of America, where she still had her business checking account, to apply to the Small Business Administration for a PPP loan for her salon, the bank’s representatives told her that only credit card customers or customers who had other outstanding loans from the bank could get that help. Bank of America was technically her bank — it held her money — but it turned her away when she sought help.”

“A study published in 2016 by economists at the Stanford Institute for Economic Policy Research found that only 1 percent of Black business owners get a bank loan during their first year of business compared with 7 percent of white owners. Twice as many white business owners — 30 percent of the total — use business credit cards during their inaugural year, compared with Black owners among whom only 15 percent rely on a credit card. Black businesses also start out with far less capital — whether from investments or bank loans — than white businesses, the study found. “Black-owned businesses continue to rely on family loans to a greater degree than white-owned firms in the three years following the firm’s founding,” the researchers found. “This suggests that access to formal debt channels remains limited for minorities.””

“The federal government has, for decades, maintained policies that are designed to try to combat some of these inequalities. The institutions that frequently lend to minority-owned businesses, especially those in low-income neighborhoods, are nonprofit organizations called community development financial institutions. They rely on government funding and charitable donations to make loans and grew out of earlier efforts to help Black Americans build wealth in the wake of slavery and segregation.

But in 2020, at the beginning of the coronavirus pandemic, only 78 of 950 such organizations were participating in the government program to give emergency loans to small businesses, the one Carlos and Yasmine sought to access. The majority of the community development financial institutions in the United States had not previously been approved by the Small Business Administration to make loans backed by the agency, so they did not get authorization to participate in the Paycheck Protection Program until much later — too late for some businesses operating on razor-thin margins to stay afloat.”

The Workplace

“The Black financial advisors claimed they were being held back from becoming “Private Client” advisors and that they were being shunted to branches in poor neighborhoods with smaller staffs and fewer financial products on offer. Often, one Black financial advisor had to cover several different branches of this type, splitting his or her time between them in a way that minimized the chances of meeting new clients — let alone significantly wealthy new clients — right off the bat.”

“The slights he encountered were confusing but also blatant, like when Ricardo was assigned a three-letter identification code for use inside JPMorgan’s computer systems, and the code was APE. Seriously? he thought. This can’t be happening. Other financial advisors who saw the code started teasing Ricardo about it, so he went to Frank and asked to be assigned a different three-letter code. Any. Other. Letters. No can do, Frank told him.”

“Ricardo didn’t know it, but all across the country Black financial advisors were being told things like that. That they weren’t a “good fit,” that things weren’t going to “work out,” vague criticisms that did not leave much room for a response. But Ricardo wasn’t having it. He had a shelf full of awards from the very institution whose representative was now telling him he wasn’t good enough. He believed the trophies and the cards and the commendations. He didn’t believe Frank Venniro.

Ever a champion of logic, Ricardo began offering Frank examples of the accomplishments he thought should propel him into Private Client advisor status. He raised the subject of a woman he’d recently made a connection with at the bank, a new client who had brought a significant amount of money to the branch. Her circumstances were not happy. Her young son had died and shed received a $372,000 settlement because of his death. She had signed up for basic banking services, but she obviously had enough money to become a Private Client, and he wanted to sign her up for that program as well. This client happened to be Black.

Frank would have none of it. He told Ricardo that the woman did not qualify to be in the Chase Private Client program, regardless of the fact that she had over a hundred thousand dollars more than what was required.

“She doesn’t qualify for CPC,” Frank said. “The dollars don’t make you qualify.”

Ricardo protested, but Frank pressed on. “You’ve got somebody who’s coming from Section 8, never had a nickel to spend, and now she’s got $400,000,” he said.

“This is not money she respects. She didn’t earn it.”

It’s not clear whether the woman actually ever lived in subsidized housing. JPMorgan later said Frank didn’t know the woman’s race, but the “Section 8" comment was a giveaway. A reference to a federal housing voucher program heavily bound up in modern-day redlining — landlords had to be taken to court to accept the vouchers, and insurers are still reluctant to write policies on buildings where recipients of the subsidy live — it is closely associated with poor Black renters. It is indisputably a stand-in for a racial slur. What’s more, Ricardo believed Frank knew for certain that the woman was Black.

Frank pressed on with his assessment of what the woman would do with her money. He said he expected her to have spent it all “within twelve to twenty-four months — I see it all the time.”

“If there’s nobody to intervene and show her how to do it,” Ricardo countered. “I thought that’s why we get involved.”

“You’re not investing a dime for this lady,” Frank told him. He had no idea that Ricardo had recorded the entire exchange.

Early the next year, Ricardo was booted from Chase’s upscale Sun City West branch and assigned to cover two branches in poorer areas of Phoenix.”

“One day, a fed-up Jimmy drove to the Chase branch where Charles worked. Secretly recording again, he asked Charles point-blank why he had not been made a Private Client. The response shocked him.

“You’re bigger than the average person, period. And you’re also an African American,” Charles told Jimmy, who at six foot four had once clocked his weight in at 320 pounds.

“We’re in Arizona,” Charles said. “I don’t have to tell you about what the demographics are in Arizona. They don’t see people like you a lot.””

“It is more than casual corporate gaslighting. America’s courts have given legal weight to the claim that, because there are policies and procedures in place to prevent discrimination, no discrimination can possibly have occurred. More precisely, from the corporate perspective, that weight allows employers to argue that discrimination could not possibly have occurred in a way in which the company ought to be held liable for it. Since the late 1990s, companies all across America have used similar language to get federal judges to rule in their favor in discrimination cases.”

“The court ruled that employers were protected from liability as long as it could be proven they had taken “reasonable care” to prevent or stop harassment from occurring and that the employee claiming harassment had failed to sufficiently utilize the employer’s resources to stop it — a vague, nearly inarguable standard in the hands of a well-staffed and -funded legal defense. The mere presence of antidiscrimination policies and reporting procedures — written evidence of a “zero tolerance” policy on racism and the maintenance of a hotline for employees seeking to report instances of discrimination — was one way an employer could demonstrate that it had taken that “reasonable care.”

As Lauren B. Edelman, a law professor at the University of California, Berkeley, put it in a 2018 article for the Harvard Business Review: “Having a policy became a proxy for companies actually doing something to prevent sexual harassment… [It] has become almost impossible for an employee to win a hostile work environment case about sex or race harassment.””

“Essma arrived with evidence. Every time a coworker bullied her — ridiculing her Muslim faith, harassing her for failing to wear a Christmas sweater to a holiday function or for greeting her parents in Arabic on the phone — she would take out her personal phone and text a friend or relative a description of what had happened. The texts were time-stamped and offered her a way to back up some of her specific claims.

When she made her report about discrimination to BlackRock officials, Essma offered to supply the texts in support of her case, but she never explained in detail where she was keeping them. “I verified this through my text messages,” she said periodically in the report, as she described what had happened to her. She filed it and waited for a response.

Less than a week later, Essma’s work-issued cell phone stopped working. It didn’t appear broken; it was just locked. Something was happening to it. For several days — an eternity in the go-go environment of the finance industry — Essma could not use her phone at all — for anything. She showed it to one of her bosses. “Look,” she told her, “I can’t get into my phone.” Shrugging, her boss replied: “It’s probably just doing some kind of update.” After a few days, Essma’s phone came back online. But it had been wiped clean. All her texts, call log, apps — everything she had put on the phone since it had been given to her at the beginning of her job — had been erased.

A few weeks later, Essma took a short-term disability leave. The oppressive atmosphere in which her colleagues and bosses all insisted that she was the source of all her problems, not they, had become too much to handle. She was at home when a human resources representative called to tell her that the department had found “no evidence” to back up her claims. No one had ever asked to see her text messages.”

“The captains of industry never seem to shy away from confidently offering to justify their self-love to the public. Ask them who they are, and they will tell you they are wonderful people doing amazing things.

Thanks to them, businesses grow, deals are made, homes are purchased, family savings pile up, and the world advances. Lloyd Blankfein, the former CEO of Goldman Sachs, told a journalist after the 2008 financial crisis that he and his colleagues were “doing God’s work,” explaining that Goldman was at the heart of a “virtuous cycle” in which its activities helped companies grow, which created wealth for them, which allowed them to employ more people who could build up their own wealth.”

“There was not a single Black partner or managing director for fifty years, from the firm’s founding in 1971 until March 16, 2021, when two employees became the first Black men ever to be promoted to managing directors in the firm’s history. The promotions, which PIMCO said were based entirely on merit and had nothing to do with optics or politics, came after a group of women working in the fund’s legal department sued, claiming gender and race discrimination, and later became part of a group of twenty-one current and former PIMCO employees who signed a letter to top managers detailing its abuse of female and minority employees.”

“One Black woman who worked for a hedge fund and spoke to me on the condition that I not name her or the hedge fund told me that after she had formally complained that she had been passed over for more than one promotion while watching less qualified white men get the raises and titles they asked for, the hedge fund’s leaders asked her if she could explain to her boss and the rest of her team how to be less discriminatory.”

“Lauren had told the group she was especially glad to be working in the area of Dubai where Standard Chartered’s office was located, because, unlike other parts of the Emirates, it was full of Europeans. “I’m so glad to be around white people again — yay!” she’d exclaimed. Sobara had rolled her eyes and chalked it up to obtuseness, but things had gotten worse from there. Once, Lauren told Sobara she would never understand the feeling of conditioner in her hair because it was too wiry. Another time she made a comment about Sobara’s bottom. And their shared boss seemed to favor Lauren over Sobara, which made everything worse.

Sobara’s claims were investigated and the bank determined that Lauren had indeed made the lunchtime comment — another person who had attended the lunch remembered hearing it, too — but that there was “no evidence to corroborate” the other incidents, so the claims related to them were “not upheld.” Sobara’s boss told her that human resources officials had recommended that “no further action” be taken about the situation, emails filed in UK court showed.

Sobara’s career at Standard Chartered ended with her complaints. She took medical leave and was treated for depression, and after the bank asked her to return to work and she pointed out that her managers had not changed anything about her situation to alleviate the source of her stress and trauma, like moving her or Lauren to a different team, Standard Chartered fired her.”

“She discovered that Credit Suisse board members liked to party in blackface and that, near the end of Thiam’s tenure, they’d hired a Black performer to dress up like a janitor and dance around for a birthday celebration he attended.

That wasn’t all. The real conflict in “Spygate,” it turned out, traced back to a phenomenon that many Black Americans are familiar with: the nosy, disapproving neighbor.

Thiam had a nosy neighbor in Zurich, where Credit Suisse is headquartered. But this man wasn’t just any neighbor. He was a Credit Suisse executive himself, and Thiam had promoted him to run the bank’s private wealth management business. Soon after being promoted, the banker had bought the house adjacent to Thiam’s, shocking the CEO. To try to protect his privacy from his own subordinate, Thiam and his partner planted a few trees on their property to block their new neighbor’s view into their house. The banker began to complain about the new trees. The conflict escalated: In 2019, the neighbor showed up at a holiday party that Thiam (his boss!) was hosting and started badgering Thiam’s partner about the couple’s landscaping decisions. Eventually, the fight got so heated that the banker quit Credit Suisse. The spying scandal followed; it was this man whom the bank’s other leaders worried was poaching Credit Suisse employees.”

“He told his new bosses that Ballantyne would be his territory. But within a few weeks of his joining, Edward Jones’s regional director sat him down for a talk: Sure, it was up to Wayne to decide where he’d like to work, but it would really be better — and management would be much happier — if he were to choose a different neighborhood instead. Managers in the area were desperate for someone who could take on Steele Creek, a neighborhood that was a bit more out of the way and less secure than Ballantyne. It was tucked behind the airport, on the edge of a big reservoir. The homes were a little smaller there than in Ballantyne, and a little older. Something, Wayne thought, felt off.

His sense of discomfort rose again when he flew to St. Louis for a big training program the Edward Jones recruiters had gushed to him about. Instructors there told him the key to building up a successful business was knocking on strangers’ doors and introducing himself as a financial advisor. He was one of only two Black trainees in a class of around forty-five people. And he quickly began to catch snippets of conversation that made him think that not everyone in the class was being relegated to backwaters like Steele Creek. Other trainees boasted about having their own offices inside some of Edward Jones’s many storefront setups and being given lists of clients worth $15 million, $40 million, offering the chance for instant profitability. Wayne did not have an office — he had to work from his kitchen table or his car — and no one had given him any clients. He knew enough to realize that these gifts of business were the real secret sauce of the Edward Jones model, not the door knocking they were telling him to do.

Something’s not right here, he said to himself.”

“Wayne sensed that someone was staring at him. He looked up and saw two white women standing five or six feet away from his little group, transfixed. Not swimming, not splashing; they were just staring. Glaring, really.

Wayne moved in the pool so that his body was in between his wife and the two women. He did not want her to see the looks on their faces, so unmistakably full of hate. One of the women, still meeting his eyes, said: “Man, Edward Jones is hiring anybody these days.” Wayne later found out this stinging remark had come from the wife of one of Edward Jones’s senior regional leaders.

Breakfasts at the conference kept up the painfully awkward feel of the week. Wayne had learned long before joining Edward Jones the special rules of behavior that he had to follow as a Black man in finance. He had to be impeccably dressed in the best suit he could find, his shoes shiny and spotless, his hair perfect. His name tag had to be prominently displayed at all times, to confirm to everyone else that he belonged in the room. He took to bringing a newspaper to the 6:30 a.m. buffet each morning, a kind of outward-facing security blanket so people would not feel uncomfortable when they noticed him sitting alone. And he always sat alone. Not because he wanted to but because, in following his preestablished rules of conduct, he inevitably arrived so early that no one else would be seated when he entered the room. As other attendees filed in, rare was the EJ employee willing to take a seat next to him, the conference’s “sore thumb.” He would watch as the other tables in the lavish hotel ballroom filled to capacity with white advisors chattering away. He would bury his head in the newspaper and try not to think about it. Always, and always toward the end, someone would come up to him and take a seat at his empty table to break the ice, and he would feel a shot of relief mix in with his frustration.

These little slights piled up on Wayne like wet leaves throughout the conference, so that by the time, a couple of nights later, a regional manager named Jim Paolone ran up to his family and shouted about a dance contest, Wayne had been inured to the shock.

The Blands were one of only two Black families at the event, a party with almost four hundred people in attendance. Paolone’s eyes were alight as he pointed to Wayne’s sons.

“Are these your boys?” he shouted. “How great! We’re going to be doing a dance contest and we’re going to be doing the ‘stanky leg’!”

Wayne smiled politely. His wife had to stop herself from rolling her eyes. His sons just stared.”

“There was a team-building session at the Mellow Mushroom, a pizza restaurant in Rock Hill, South Carolina, just across the state line from Charlotte. Wayne had just won a $6 million client, and word was going around about his victory. He sat down with pride at a table alongside some members of the company’s leadership team. But instead of compliments for his work, one of the men — all of whom were white — gave him a glance and turned to a colleague.

“He got a six-million-dollar client?” the man said.

“How did he get a six-million-dollar client? He’s not even going to be here, anyway!”

Wayne was sitting a mere three feet away, well within earshot.

“You can’t pay attention to this person,” Wayne’s field trainer, who was sitting with him, said. But the field trainer himself told an Edward Jones regional leader about the incident, who called Wayne the next week to talk about it.

“That guy is not on the leadership team anymore,” the regional manager said.

Wayne later found out that that was a lie. Not only was that guy still a leader but his office, a prominent one in the Edward Jones network, was in Ballantyne — a locale Wayne had targeted to build his business.

“Not long after, Wayne was invited to give a presentation about diversity to the leadership team. When the meeting let out, Wayne found himself in a hallway behind three men, one of them Paolone, the man who had invited his sons to do the “stanky leg” at the dance competition. Paolone appeared to think the three men were alone. He didn’t see Wayne, who was heading in the same direction, trying to get to the men’s room.

“How’s this for diversity?” Paolone whooped, raising one hand above his head and jabbing a raised middle finger in the air. Seconds later, he turned and locked eyes with Wayne, who left, wordlessly shaking his head.”

“After the incident with Paolone, Wayne was moved to an EJ office in Lake Wylie, South Carolina, a little south of Steele Creek, sharing space with Jon Kingston, an established Edward Jones financial advisor. Wayne was under the impression that Kingston would be leaving soon, and the practice — and clients — could be his.

Although he now had a storefront where he could work, Wayne did not have an office per se. Kingston had a side business collecting and selling antiques, and he had commandeered the only extra space in the Edward Jones unit to use for storage. Whenever Wayne wanted to meet with clients, he would have to lead them carefully through the narrow space not taken up by a tea cart that looked like a movie theater popcorn machine and a large dining table that occupied almost all of the floor space in the room.

Wayne and Kingston did not exactly hit it off in the new space; they never had a single one-on-one meeting, and when Jon would arrive in the mornings he would pass by Wayne’s room without a word. Kingston had no business reason to bemoan Wayne’s presence. Under a system by which advisors with their own offices got production credits, Kingston got paid extra for housing another EJ employee.

After a month, Wayne tried to put his foot down about the antiques. He went on Edward Jones’s procurement system and ordered the standard office furniture that belonged in all advisors’ offices. It arrived, but Kingston refused to move his things, and so Wayne’s furniture stayed in the hallway for six weeks. The receptionist handling their calls eventually got so annoyed by the mess that she alerted the head office to Kingston’s refusal to accommodate Wayne, and he was forced to move the merchandise.

Shortly thereafter, Kingston was gone. But the office did not go to Wayne, nor did his clients. Another advisor, a white man named Ryan, showed up and took on Kingston’s $25 million book. Wayne got a call from another senior financial advisor in the region, Todd Tyrie: “I hope we can count on you to help him.”

It was March of 2016, and Wayne had had enough.

“I really began to accelerate my departure,” Wayne said. “I started looking around to see what to do next.” As soon as he could, he quit and opened up an independent practice as a registered investment advisor, which meant that he had to convince financial products companies to let him sell what they had to offer. Many refused, saying— or hinting — that they were worried that if they did business with him and Edward Jones found out, the company would cut them off.”

“Black trainees were told that it would take them longer to establish client rosters, but they were not told why. Even as the company acknowledged that there was an observable pattern of struggle for Black trainees, its insistence on door-to-door sales was unwavering. White trainees seemed to log successful door-knocking sessions left and right; Black trainees toiled for much longer before scoring any wins.

“What would normally take a white man or woman seven tries to convert a prospect they just met to a client, it would take an African American twice as long to get to that step,” Felicia said. “The recruitment process didn’t mention just how difficult this is going to be because of the color of my skin.”

Strangers would yell at Felicia throughout the course of her day:

“Get the fuck off my porch!”

“Why the hell are you here?”

“You people are always coming onto our porches looking to take things!””

“Edward Jones had assigned her a mentor, a guide to whom she was supposed to turn if she had a problem with door knocking. Hers was a white man who ran an Edward Jones office in a Chicago suburb lined with single-family homes. It was her responsibility to drive out to the suburbs to see him every week or so.

During one of these conversations, Felicia described her difficulties in Hyde Park. The high-rises didn’t lend themselves to the strategy, she explained. And some of the free-standing homes were gated, so it was impossible to get up to their front doors. Felicia wanted to expand the geographic reach of her solicitations. She wanted to use other channels to introduce herself to new people, collect their information, and try to convert them from prospects to clients.

His response did not instill confidence in her future at the firm.

“You people are always looking for the easy way out,” he said.

You people.

“I just kind of looked at him like ‘This is not the easy way out,” Felicia said. “I said: “You have no idea how this community works. This is not Orland Park, where it’s tree-lined single-family homes. This is a neighborhood of high-rises. If I want to get two hundred, three hundred people to know I exist, I have to figure out how to get into the high-rises.’”

And even without her mentor’s blessing, she did.

Felicia started reaching out to the organizations running the buildings. She wrangled invitations to speak to groups of residents at condo and co-op board meetings and other community gatherings. She volunteered on the weekends handing out water and granola bars at charity runs and slipping her business card into locals hands as well. But rather than reward her resourcefulness, Edward Jones’s managers insisted that she continue to focus on door knocking.

They also pooh-poohed her when she tried to talk to them about her mentors “you people” comment.

The first person she went to for help with her mentor was a white woman, a full-fledged financial advisor who worked in the nearby suburb of Evergreen Park.

“I don’t think he really meant anything by that,” the woman said. “I don’t think you should take it personally.””

“In early 2019, the company disclosed that it routinely lost half of the trainees it recruited into its program because those trainees had “difficulties developing or expanding their businesses.” The 50 percent failure rate was not something the company advertised in its recruiting drives or even warned new recruits about after they signed up.

Other Black Edward Jones employees suffered dramatic losses, too. They lost homes, spouses, stability, sanity. In 2018 a group of them sued the company in federal court in the Northern District of Illinois, claiming it was systemically mistreating them, keeping opportunities away from them based on racial stereotypes. A judge granted the case class-action certification, so the group’s complaint eventually represented eight hundred people. The lawsuit said that Edward Jones’s managers routinely steered Black trainees to knock on doors in low-income neighborhoods where the likelihood of finding someone with enough savings to warrant a financial advisor’s attention was low. It also claimed that Edward Jones kept business development opportunities – like the bestowal of established clients – away from Black trainees and that it routinely forced the costs associated with maintaining offices onto only Black trainees, who ended up supporting white colleagues even while they were being shut out of the same opportunities.

Edward Jones denied the allegations and spent three years fighting the claimants before reaching a $34 million settlement with them in 2021; ending the case before it reached the point at which the company would have to share documents that could have revealed whether and to what extent its treatment of Black employees was a series of conscious choices. The firm also moved to settle a separate suit over its attempts to claw back money from trainees who had departed before serving their mandatory three years.”

“The avalanche of chilling stories from Black EJ employees was not enough to freeze the firm or its leaders out of the industry – not even close. EJ itself is still embraced as legitimate and basically good by its competitors. There has been no “EJ tax” for having succeeded at and left Edward Jones, even if that success came at the destruction of others.”

“Unlike banks, whose most influential regulators were clustered in Washington in various federal agencies, insurers answered to state authorities and no one else.

It was a sweet setup, one the industry had carefully orchestrated over decades. Insurance lobbyists earning top dollars had argued that insurance products were so highly tailored to different people in different parts of the country that there was no way blanket regulatory policies could govern their behavior. Whenever members of Congress tried to interfere with this arrangement, the lobbyists would warn that any changes to the structure of the industry’s oversight were liable to cause unspeakable chaos in the U.S. economy. In the early 1990s, especially, everyone seemed to share a keen interest in not rocking the boat, since, in the previous decade, 105 property/casualty insurers had failed outright, while hundreds more had teetered on the brink of catastrophe.

Far from being a burden to insurers, having fifty regulators meant the industry could reduce the chances that any one of them would notice broad patterns of misbehavior or muster any impactful resistance against their chosen courses of action. On top of that, many regulators did not particularly care whether the industry was being fair to its customers. Since no single state had the kind of money, organization, or legal heft that the feds had, insurers enjoyed freedom from scrutiny, effectively giving them permission to treat their customers however they wished as long as things didn’t get too ugly in public.”

“Getting them to share details about whom they were lending to and at what rates was one way Congress thought it could ensure that Americans buying homes were getting equal treatment. The reporting requirement was in itself a way to keep banks in line. If the banks knew there was a possibility that someone at a regulatory agency or a consumer advocacy group could sit down and compare the interest rates they were charging various customers, they would be less likely to exploit certain kinds of customers, including racial minorities.

Birnbaum thought this trick might work with insurers, too. He had long suspected that companies were charging Black customers more for policies on their cars, and also that they were giving Black policyholders trying to make claims a harder time than white policyholders. But without the data to prove this, his office could not take any action.”

“One of the first things Waters did as the chairwoman of the House Financial Services Committee was to rearrange its subcommittees. She combined two longstanding subcommittees and created a new one: the Subcommittee on Diversity and Inclusion. This move turned out to be highly controversial within the financial industry. Bank lobbyists asked Waters’s aides on Capitol Hill: Why was this necessary? What would it accomplish? And why was the financial services committee the only one of the many congressional committees to set about creating such a subcommittee? Why would banks have to endure more scrutiny than any other industry? It did not seem fair to them. They did not want to be in that spotlight.

When the subcommittee met for its first hearing, the industry’s fears were realized: Waters gave an opening statement highlighting the industry’s poor track record on hiring and retaining non-white employees. She pointed out that a Government Accountability Office study had found that the financial industry actually had proportionally fewer Black employees in senior roles in 2015 than in 2007.

The complaints about Waters’s new committee led to more than just idle chatter. When Democrats took over the Senate in 2021, the committee in that chamber overseeing banks briefly explored its own diversity subcommittee. Staff members working for the Senate Banking Committee’s chairman, Ohio senator Sherrod Brown, started to plan for a diversity subcommittee. But they soon scrapped the plans. Republicans on the committee were not going to agree to it. It was a fight that would be too costly to wage, the staffers decided. They dropped the idea. A subcommittee looking squarely at minority representation in financial services clearly posed a threat – to someone.”

Conclusión

“In 2021, the city of Evanston, Illinois, near Chicago, began distributing payments to Black Evanston residents whose lives have been affected by Evanston’s earlier redlining policies. Any Black Evanston resident who has lived in the city since 1969 or who is directly descended from someone who lived there between 1919 and 1969 qualifies for a $25,000 payment that can be used for home repairs or to buy a new home.

Evanston is the first municipality to adopt such a program, and its decision to structure its reparations as a response to its own segregation policies is illuminating. Large companies could focus on their specific wrongs, too.”

“Rather than fear, a keen understanding of the reliability of check cashing services, which charge fixed fees, as opposed to banks — which often surprise their customers with unpredictable service and overdraft fees (Chase says customers have the option to open an account that never charges overdraft fees) — often drives low-income people away from traditional banks.”

“Darity’s view is that the amount of money required to pay reparations is too large for the private sector to handle. And in light of the previous failures to use the courts to hold companies accountable for their links to slavery, it is not worth trying to get them to contribute. Furthermore, much of what they did before the Civil War was perfectly legal, so the responsibility really lies with the government that presided over the atrocities.

But that does not mean banks can’t play an important role in the reparations movement, according to Darity.

In his view, the most effective way for them to help the cause would be to use their considerable lobbying power in Washington to get reparations legislation enacted into law.

“That would be a terrific boost for the effort,” he told me, adding that banks had a great deal more than their links to slavery for which they ought to make amends.”

“In early 2018, JPMorgan Chase CEO Jamie Dimon, Amazon CEO Jeff Bezos, and the billionaire investor and Berkshire Hathaway founder Warren Buffett declared that they were teaming up to fix the American, healthcare system. They would start by designing new healthcare delivery methods for their own employees, who together numbered more than a million people, and then scale up whichever new ideas proved successful so that all Americans could access them.

News coverage of the announcement suggested that lots of people really believed that these three men’s initiative, which had yet to be named and which had no full-time leader and no specific plan of action, could have been the start of a revolution in healthcare. “Tuesday’s announcement landed like a thunderclap,” my Times colleagues wrote, citing an anonymous source who claimed that Buffett, in particular, believed that “the condition of the country’s health care system is a root cause of economic inequality.”

In January of 2021, three years after launching the project, JPMorgan, Amazon, and Berkshire Hathaway pulled the plug on it. It turned out that disrupting healthcare was hard! There were pesky roadblocks, like patient privacy laws and data-sharing restrictions. And there were even more basic difficulties, like finding top executives to devote their full attention to the joint effort and coming up with ideas for what to do to start the process of real change.”

“Imagine a big bank like JPMorgan redesigning its internal messaging so that all its employees knew where it stood on reparations and how forcefully it was willing to back up that position. This could transform individual employees’ understanding of the historical and current barriers Black Americans confront every day. More than any set of gussied-up business goals packaged as a racial equality pledge, a company’s embrace of reparations would orient its internal culture toward a better understanding of the history of slavery and racism in America. If banks and other financial firms had to spell out their support for a federally funded reparations program and defend their positions on it to hostile politicians and customers, other changes would naturally follow. Individual employees would get the message that the dominant values of their institutions included a commitment to racial justice based on an acknowledgment of how bad things really were in the past and how bad they still are. No more easy-to-ignore lip service. This could help improve day-to-day conditions for Black employees and customers. And it would radiate outward into American society, potentially reducing hysterical reactions to various scholars’ and schoolteachers’ attempts to teach a more accurate history of the United States and its treatment of Black people.”

“Jaq wanted these older advisors to come over and retire with her so she could have a hand in deciding who would be given their books of business after they were gone.

It was genius. One of the biggest problems for Black financial advisors is still that, no matter how hard they work, they rarely get the benefit of being given established clients by older advisors. It’s another vicious cycle: The older white advisors, who came up during a time when racism in the wealth management business was not something anyone even thought about addressing and thus never had any Black peers or mentees, still generally want to pass their business on to people who look like them when they decide to leave the industry. Still. Right now. As you read this.

Jag wants to be the woman who breaks that vicious cycle, one end-of-career transfer at a time. Somewhere out there — in the Detroit area, actually — she is collecting older advisors. She calls them “sunsetters.” She’s also collecting young trainees, whom she calls “sunrisers.” In her system, the older advisors bequeath their clients to the sunrisers, who finally get what white financial advisory trainees have gotten for generations: reliable revenue sources that they can use for momentum while they meet new people and build up their practices. She is looking for them at historically Black colleges and universities and at other colleges’ and universities’ multicultural business student groups, where non-white business students gather.”