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Analysis

December 2, 2021

Better Markets Report Outlines Steps Federal Regulators and Banks Can Take to Address Racial Economic Inequality

Generations of discrimination and mistreatment informed by racist beliefs, narratives, laws, policies, and practices have contributed to deeply entrenched structural inequities within the financial services sector that continue to profoundly undermine the economic status of people of color.

This new Better Markets report highlights the racial economic inequality in the U.S. that has not only limited economic opportunities for many people of color and undermined their quality of life, but also put in place a structurally regressive financial system that perpetuates tremendous and growing economic inequality in the United States. Black Americans, Hispanic Americans, and other Americans of color are more likely to have lower-income jobs, more likely to be unemployed, less likely to have significant savings, more likely to be underbanked or unbanked overall, less likely to own a home, and more likely to use more expensive and predatory financial products.

In our report, we outline actions the U.S. banking regulatory agencies should take to begin addressing racial economic inequality and move toward a more just society including:

  • Propose and finalize meaningful reforms to the Community Reinvestment Act (CRA) rules and enforcement;
  • Improve efforts to promote minority depository institutions;
  • Require disclosure of noncompliance with consumer protection laws by banks and their branches;
  • Study the costs and fees associated with banking products and services and promote rules to make banking fairer; and
  • Increase diversity among leadership and staff.

We also review the insufficient commitments the largest U.S. banks have made in addressing this issue. Read the full report here or click the button below.

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