The ‘one transaction’ that could solve the racial wealth gap

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As I prepare to moderate Fortune’s virtual Brainstorm Finance conversation on “banking while black” later today, I’ve been turning my sights to tangible strategies the finance industry can take to address the systemic inequality that remains prevalent in just about every aspect of our monetary lives.

The wealth gap between black and white America is stark: An average white family’s net worth ($171,000) is about ten times that of an average black family ($17,150), based on the latest Federal Reserve data.

But even though that chasm may be vast, it’s not insurmountable, according to Kevin Cohee, the CEO of OneUnited Bank, the largest black-owned bank in the U.S. “That difference is largely rooted in one thing, homeownership and where you own the home,” Cohee, who will speak at our virtual event later, tells me.

And Cohee, whose OneUnited Bank has been wooing more black customers in part through a hashtag campaign to “#BankBlack,” aims to tackle that problem.

“It’s literally one transaction— it’s one, well executed real estate purchase,” Cohee says. “If you just got the home purchase right, you could solve the economic disparity gap in the United States. It’s the root of so many of the problems that we have.”

While historically, black Americans have been denied loans and mortgages through racist practices such as redlining, Cohee believes the “most important thing” banks can provide today is not just money. “It’s not about access to capital—we have access to capital,” he says. “It’s about access to knowledge.”

Many fintech companies today talk about their commitment to financial inclusion—that is to say, providing banking services, often with the help of digital technology, to previously underserved or “underbanked” communities, including the black community. But Cohee’s points underscore a need for more than just supposedly colorblind banking apps and Internet-based financial services. Even with new technology, black executives stress the need for human interaction and community outreach to bring more black Americans into the world of mainstream banking, accelerating their moneymaking potential to finally close that wealth gap.

“What we’re doing is we’re trying to teach black Americans how to get that one transaction done, so that you can change it, Cohee says.

If you’ve been to our Brainstorm Finance events before, you should have received an invitation already (if not, you may need to adjust your spam settings), and we hope you’ll join us at 12pm ET today. If you’re an executive who’d like to attend, you can request one by emailing ledger@fortune.com.

Jen Wieczner

@jenwieczner

jen.wieczner@fortune.com

DECENTRALIZED NEWS

Credits

TikTok owner angling to move into financial services ... Google to turn Google Pay into commerce portal ... U.S. retail sales jump 17.7% from a very low base ... Payments through Whatsapp go live in Brazil ... Square has issued $820M in PPP loans ... A.I. money manager Pagaya raises $102M ... JPMorgan says Bitcoin passed its first real stress test during coronavirus turmoil ... iBanFirst raises $23.8 million for borderless financial services ... U.S. city launches local currency printed on wood.

Debits

Robinhood made $100 million in Q1 by selling its customers' order information ... South Africa's Postbank to replace 12m cards after employees steal master encryption key ... Cop accused of murdering George Floyd could still get $1 million pension ... HSBC resumes job cuts after taking a break for coronavirus ... Fintech funding in Asia suffers under coronavirus ... Bitcoin hardware manufacturer Bitmain reportedly halts shipments amid CEO power struggle ... Robert Farkas pleads guilty to $25 million Centra Tech ICO scam ... Craig Wright, Bitcoin's answer to Anna Delvey, claims to own stolen Mt. Gox coins.

BUBBLE-O-METER

-$730,000

The dollar amount allegedly displayed to a young Robinhood user just before he committed suicide, believing it to show losses he owed the trading platform. The amount, which was included with the young man's suicide note, is now instead believed to have been his "cash and buying power" level. Sources familiar with Robinhood's procedures told Fortune this number can dip temporarily between phases of some options trades, but is separate from a user's overall portfolio value, and doesn't indicate liabilities per se.

The victim's story was recently shared by Bill Brewster, a family office fund manager (Fortune has not independently verified Brewster's claims). In a statement, Robinhood said: “All of us at Robinhood are deeply saddened to hear this terrible news and we reached out to share our condolences with the family over the weekend. We will not share any details regarding the account to respect privacy and confidentiality. We are committed to continuously improving our platform and are reviewing our options offering to determine if any changes may be appropriate.”

FOMO NO MO'

"Calendar stalking," or the practice of looking at others' calendars to get a sense of when big announcements or layoffs might occur, became common practice, according to multiple sources. One source said they unintentionally came across people's offer letters and employment agreements.

From a granular Business Insider chronicle of recent events at Brex. The startup, recently valued at $3 billion, aims to provide financial services specifically for startups. But with business spending pulling way back thanks to coronavirus, the company's position has degraded fast, leading to the layoff of 17% of its staff, including its COO, on May 29. Along with the apparently flawed decision to make all of the company's documents public by default (including employee calendars), complaints about diversity at the startup were said to be widespread, and leadership by the company's financial team has reportedly left other functions, including compliance and legal, scrambling to catch up. Most significantly, former employees say Brex was beginning to miss internal growth targets in early 2020, before coronavirus cratered business spending, and was beginning to take riskier clients.

But the profile may be interesting less because it reveals any grave misdeeds or seriously mistakes, than because it shows young leaders getting some things right and others wrong, as humans tend to.