♪♪ ♪♪ ♪♪ >> Nicole Elam, the national president and C.E.O.

of the National Bankers Association, next on "The Chavis Chronicles."

>> Major funding for "The Chavis Chronicles" is provided by the following.

At Wells Fargo, diverse representation and perspectives, equity, and inclusion is critical to meeting the needs of our colleagues, customers, and communities.

We are focused on our commitment to diversity, equity, and inclusion, both inside our company and in the communities where we live and work.

Together, we want to make a tangible difference in people's lives and in our communities.

Wells Fargo -- the bank of doing.

American Petroleum Institute.

Through API's Energy Excellence Program, our members are committed to accelerating safety, environmental, and sustainability progress throughout the natural-gas and oil industry around the world.

Learn more at api.org/apienergyexcellence.

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Reynolds stands against racism and discrimination in all forms and is committed to building a more diverse and inclusive workplace.

At AARP, we are committed to ensuring your money, health, and happiness live as long as you do.

♪♪ ♪♪ The National Bankers Association was created in 1927 in response to discriminatory practices of the American Bankers Association, which would not accept Blacks into membership.

The organization's main goals include creating programs to increase the number of Black-owned banks and expand their economic impact on communities of color.

Between the end of Reconstruction and the start of the Great Depression, more than 130 Black-owned banks opened for business, providing capital to Black entrepreneurs and prospective home owners at a time when it was nearly impossible to secure capital and mortgages from White-owned banks.

Today, there are only 22 Black-owned banks operating in the United States.

>> We're very honored to have the president and C.E.O.

of the National Bankers Association.

Nicole Elam, welcome to "The Chavis Chronicles."

>> Thank you for having me.

>> And I understand that you are the youngest C.E.O.

and president of the National Bankers Association.

That's since 1927?

>> 1927.

I hope I don't look 1927, like I'm that old.

>> No, you look very, very young.

You know, you'll make people go to the bank.

So tell us something about your social upbringing.

>> So, I was born and raised in Indianapolis, Indiana, as you said.

Faith and family were really the values that permeated throughout my household.

But you can't really be a Hoosier without sports being a part of the conversation, and so for us, that was racing.

The Indianapolis Motor Speedway.

My grandmother was an elevator operator.

My father worked on the elevators at the Speedway.

And I ended up working at a law firm and lobby shop that represented the Indianapolis Motor Speedway.

So faith, family, and racing.

Maybe that's why I've got a lead foot today.

I don't know.

But that's really what permeated my household.

>> Well, that's a very interesting background.

I know you are a distinguished graduate of Howard University Law School.

>> Yes.

>> Great HBCU.

But tell us, how did you get into financial services?

>> So, it was really a happy accident.

I was exposed to financial services while I was at Akin Gump, a law firm here in D.C., and I was there during the financial crisis of 2008.

And it was when everybody was being hauled in front of Congress, trying to figure out whose fault it was.

That was my first exposure to financial services.

And so it's interesting to fast-forward today while I'm thinking through, you know, Howard and the legacy of Howard and thinking through the NAACP, the oldest civil-rights organization, all of those things coming full circle as I'm working on issues around financial inclusion.

>> You mentioned NAACP.

I remember bringing Nelson Mandela to your hometown in Indianapolis in 1993 for the NAACP National Convention.

Tell us what you actually did for the NAACP.

>> So, at the NAACP, I was a legislative assistant there, so worked on the public-policy initiatives there.

I was a part of the Washington bureau, which is their, again, public-policy arm there.

And we focused on their 40 legislative priorities, everything from economic justice to criminal justice to who's in the Supreme Court, who's in the judicial system.

So that is really where I got my grounding on the importance of coalition building, the importance of partnerships, the importance -- the importance of having other people singing from the same hymnal to push issues around equity.

That really formed my lens around equity, my worldview.

>> There's a notion that good business is determined by good relationships.

So in the evolution of your career, from law school to NAACP and then to banking and financial services, how do you see today the future of Black-owned banks?

>> Yeah.

So one of the phenomenal things about Black-owned banks is the exceptional growth that they've experienced over the last three years.

When you think about the number of Black banks, there were 134 at its peak, and, today, there are 22.

And what's historically happened -- >> Wait, wait.

Say that again.

>> 22.

>> There are only 22 Black-owned banks?

>> Only 22 Black-owned banks.

At its peal, there were 134.

>> So what happened?

>> So, typically, what you find is when there's an economic downturn, like what we experienced with the pandemic, whenever you have a downturn, Black banks don't have the capital that they need to sustain themselves, so they close their doors.

But what's interesting about the last three years, with the pandemic and the murder of George Floyd, you had an unprecedented amount of capital that flowed into these institutions.

So what would historically happen is they would close.

What happened was they grew.

Their asset size grew by 38% since the start of the pandemic.

And Black banks in particular, they have grown the most -- by 62% in their asset size.

So phenomenal, explosive growth.

And so the good thing is, is that they are well-capitalized and stronger than they've ever been.

And that's a good story to tell.

>> Well, you chose an optimal time to be president and C.E.O.

of the National Bankers Association because I'm listening to you.

Banks are doing relatively well in Black- and minority-owned communities.

You know, the demographics of the United States is changing.

>> Yeah.

>> The browning of America is a real fact and not something of the distant future but the immediate present.

I'm going to ask you, has the financial services overall experienced the browning of America?

>> Oh, absolutely.

>> Um, well, in some ways, yes, and in some ways no.

Here's what I say has not experienced the browning.

And that's when we have conversations around financial inclusion.

Now, the difference between financial inclusion and financial exclusion is race.

Race, that's the biggest difference.

Race is what drives a lot of the exclusionary practices that you see within the financial services industry and within wealth building at large.

It was exclusionary practices built around race is what prevented Black people from being able to get federally backed mortgages.

It was race that led to exclusionary practices that prohibited Black people from buying homes in certain neighborhoods.

Hence, you've got redlining.

And so there's still a lot more work to be done when you think about a number of these exclusionary practices.

But I'm excited to say that you are starting to see more browning, if you will, within this sector.

>> That's great.

You know, you've emphasized that race has been a determinative factor, probably the most determinative factor in whether or not one is included or excluded from the opportunities of financial services.

As the president of the National Bankers Association, what are your top three priorities?

>> Technology, talent, and capital.

I'll start with technology.

When you think about technology, technology drives everything that we do.

We want to live, work, and play, and it's all driven by technology.

But technology is cost prohibitive for a number of Black banks.

When I think about big banks, they spend $12 billion a year on technology, $12 billion a year.

The average asset size -- >> Just on the technical infrastructure?

>> On tech, on tech alone.

But the average asset size of my bank is $400 million.

There's no way that they can compete.

But technology is driving everything, technology and AI.

It's what's going to allow financial services to be more accessible and more affordable.

But when you think about this next generation of customers, millennials, 87% of them are leveraging digital and mobile banking.

So they've got to be able to compete and keep up with technology.

So technology is something that we're really building a lot of partnerships around.

>> It seems to me that on the technology front, innovation.

>> Absolutely.

>> And, you know, even though you mentioned the price of innovation, the price of technology, high tech today.

>> Yeah.

>> It seems that one would say that also technology levels the playing field.

It allows more people of color to grasp the technology, get a hold of it.

I know, and that's why in some communities, not having broadband, not having access to basic Internet technology is a disincentive.

>> Absolutely.

What technology does is that it makes financial services more affordable and more accessible.

When you think about accessibility, it allows you to reach people who may not have a branch in their area, but they may have a phone in their hand.

And we know that Black and brown communities typically have phones in their hands.

It also makes it more affordable.

It is a high cost to provide banking services to underserved communities, which are historically Black and brown communities.

But technology allows you to reach more people at scale.

And so the phenomenal thing about technology, it allows you to do what Black banks do best, which is relationship banking.

But it allows you to scale that leveraging technology.

It allows them to be high tech and high touch.

>> Very good.

So that's technology.

The other two?

>> Capital.

Capital.

We all know banks need capital to grow and to scale, and capital is what prevented them from growing and scaling in the past.

And so the fact that they've grown by 38% in their asset size, Black banks by 62%, is phenomenal.

But not everybody benefited from the infusion of capital that came into the sector post pandemic and post George Floyd.

So they're still going to need capital.

The last thing that they're going to need is deposits.

Deposits is a huge thing that they need.

And this this really requires everybody.

As an individual, I can go make a deposit in my bank, but even as a company, we can make deposits in minority banks.

And so deposits is a huge thing that they're needing.

You need deposits to actually put that capital to work.

And so deposits is the number three thing that they're going to need.

>> So I've been studying the overall business sector.

And there are many new and growing African-American owned businesses, other businesses, people of color.

>> Mm-hmm.

>> AS that trend increases, do you see a trend in Black businesses and Black individuals of wealth making their deposits in Black banks?

>> I would certainly hope so.

I think what we learned from Black Wall Street is the power of the dollar staying within the Black community.

What made Black Wall Street so successful is that the dollar continued to circulate in that community.

When you think about the purchasing power of Black Americans, it's $1 trillion, $1 trillion.

>> Every 12 months?

>> Every 12 months, $1 trillion of purchasing power for Black Americans.

Now, the sad thing is that that dollar only circulates once and leaves the community.

With the Latinx communities, it circulates six times before it leaves.

But with white communities, that dollar circulates an unlimited amount of times.

So imagine if we kept the dollar within the community, how much more wealth and how much more support of businesses we would have.

>> So then the National Banking Association, you advocate recirculating that dollar in the community.

>> Keeping it within our community.

We want you to bank with Black banks.

We want you to shop with Black businesses.

That's what we want you to do.

>> Well, it sounds like that's what participatory economics is all about.

>> Absolutely.

>> I also wanted to ask you, in terms of public policy, you know, the Congress, the Biden-Harris administration, we were very pleased to hear that President Biden signed an executive order saying that government wide, there had to be diversity, equity, and inclusion.

From your perspective as the national president of the Bankers Association, are you seeing more interface public/private relationships?

Basically what I'm asking, what is the relationship between the federal government and the National Bankers Association?

>> We have a strong relationship with the Biden-Harris administration, and we've certainly had a strong relationship with all the prior administrations, as well.

What I can say is that this administration has been really intentional around the goals of equity, whether it was Justice40, where 40% of any procurement or programs needs to go to benefit disadvantaged communities.

So they have been hyper focused on that.

When I think about Treasury, Treasury has an advisory council, the first of its kind, around racial equity.

They have a racial equity counselor.

So they are being -- >> In the Treasury Department?

>> In the Treasury Department.

Janis Bowdler.

So they're very focused on issues of equity and very focused on how it impacts Black and brown communities.

Everything from the infrastructure bill to the Inflation Reduction Act to climate change.

All of those topics are being looked at through an equity lens.

And so I'm proud that this administration has been focused on that.

>> Can you define for the audience -- I think I know, but I want an audience to know the difference between equity and equality.

>> Mm, that's a great question.

I would say equity is about being at the same level playing field.

Equality is about what it is you're bringing to the table.

>> Great, and we need both.

>> We need both.

>> Because I've seen over the years the nomenclature of the civil rights movement has even evolved.

You know, freedom, justice, equality.

But now we say freedom, justice, equality, and equity.

>> And equity and equity.

>> Economic peace.

Just broadly speaking, Nicole, how do you see the value of economic development vis a vis political development?

Because some people land on one side, the other side.

Do you think we need both?

What would you put the priority on?

>> So I would say history shows that you need both, right?

When we go back to what created the wealth gap, a lot of it was driven by public policies.

A lot of it was driven by public policies.

So they're not mutually exclusive.

In fact, they work hand in hand.

In order to have fair economic policies, you need to have public policies that are driving those things, or else you would not have had redlining.

You wouldn't have had federally backed mortgages that weren't meant for Black and brown communities.

They were excluded from them.

So you certainly need both.

>> Great.

Now, what drives you?

I mean, it takes a lot of energy, a lot of responsibility to be on the National Bankers Association.

What keeps you going?

>> Impact.

Impact.

When I think about, one of my heroes is Thurgood Marshall.

We all know his story.

Civil rights lawyer, the role that he played in dismantling racial segregation in the school system, being the first African-American Supreme Court justice.

But what I learned from him as I reflect on his life was the power of your platform.

He leveraged his profession in order to make change.

And when I think about other folks that I've come in contact with throughout my career, Vernon Jordan, when I was at Akin Gump, he talked about, it doesn't matter where you are, corporate, government doesn't matter where you are, leverage that platform to do good.

When I think about Thasunda Duckett and what she's done, it's all about leveraging your platform.

And so when I think about the folks who have influenced me throughout my career, it always goes back to having a mission driven mind-set, and impact focus.

Because if I'm just motivated by me or by money, if that doesn't happen, what good am I, what am I doing?

So you have to have something that is higher than you that you're working towards.

>> So there are social justice consequences of leveraging your platform professionally.

>> There are.

At times, there can be.

But I think there's more good than bad that can be pulled from that.

The reality of it is, is that we live in a society that is exceptionally values driven.

People want to bank at, shop at, do business with organizations that are values driven.

They expect you, the people at the organizations as well as the organizations to be values driven.

And when you think about millennials, the largest share of the US population, 72 million people, they are exceptionally values driven.

So I think the norm now is around values.

The norm now is around social justice.

>> These values that you articulate, we're also living in a climate where there's some debate about the value of Black history, about the value of Black culture, even some revision of the history.

You mentioned Tulsa and the Black Wall Street earlier.

And now for the first time, we celebrate Juneteenth.

>> Yeah.

>> But the truth is, and what I wanted to ask you from your perspective, which is unique, the role of economic empowerment, the role of economic development as a progress measure, that we measure our progress not only by who gets elected to office, but what is the gross national product.

You mentioned that African-Americans spend $1 trillion.

How much do we produce?

>> So when I think about that question, I think about the racial wealth gap.

What we know is that Black families have a tenth of the wealth of white families.

But you can't just start the conversation with the wealth gap.

That is a symptom.

The root cause of the issue is lack of access to financial services.

It's through financial inclusion that people are able to buy a home, buy a car.

They're able to save for their future, save for retirement, save for college.

They're able to build their business.

But financial inclusion is more than just about your ability to get a loan or to open up a checking account.

Financial inclusion is the only pathway to building your wealth.

And so it all goes back to economic justice.

It all goes back to your ability to accumulate wealth.

And the great thing is that Black banks have been at the center of wealth creation and communities for over a century.

When you think about the big key drivers of wealth creation, it's all around access to financial services, owning a home, owning a profitable small business.

Those continue to be the biggest drivers of wealth creation.

And Black banks have been at the center of all of that, helping to create wealth in communities.

>> Can you speak about the importance of home ownership versus renting?

>> So home ownership is one of the biggest drivers of wealth creation.

Here's the challenge.

Because you've had practices that made it difficult for Black and brown people to get federally backed mortgages, they were behind the ball.

Because you've been in communities that where there's redlining, they can't buy in certain communities, they're behind the ball.

And so what that means is that they're playing catch up, right?

It's hard for them to get mortgages.

They're behind the ball.

And so oftentimes you see people renting.

They're renting more than they're owning.

That also has consequences to the credit scores, right?

Most people, when they're typically looking at credit scores, will look at your home ownership.

They're not taking into consideration the history of redlining in your community.

Well, what we do, and the reason why we're able to say yes when others are saying no when we're making lending decisions at Black banks, is that we look at your rental history.

We can see that you're a good borrower, that you pay back and that you're paying your rent on time.

But it's those distinctions that people miss.

Unfortunately, right now, home ownership is not affordable for many people.

And so that's something that we're working towards.

How do we make people get into homes?

How do we help them get into homes, and how do we help them with affordable mortgages?

>> How important is financial literacy?

Just basic financial literacy.

K through 12, college, post grad, every day.

How important is financial literacy?

>> It's hard to invest, save, or manage money if you have no idea about money.

And so financial literacy is important.

But I think where people miss the mark is that it's not just about you being educated about the basics of budgeting, it's about you getting that information at key decision points in your life.

When it's time for me to go to school, understanding the difference between a loan and a grant.

When it's time for me to buy a house, when it's time for me to get a credit card, when it's time for me to buy a car, understanding those things.

And so it's not just about making sure that people get the information, it's getting it to them at critical moments, and it's leveraging technology to get it to them in a way that makes sense and that's digestible.

That's one of the things I think is so great about technology and AI, is you're giving people financial information at the time that they're trying to maybe take out a loan.

You're incentivizing them to learn more.

>> I'm glad you mentioned artificial intelligence, AI.

Some people fear it.

Other people embrace it.

What's your take on the benefits of AI?

>> The dirty secret is that AI has been around for a long time, right?

People are now just talking about it because of ChatGPT, but AI has been around for a long time.

I think it's all about how you're leveraging AI for efficiencies, how you're leveraging AI and technology to get further, faster.

It's here to stay.

It's going to be here.

And how are you leveraging it to have more -- to expose access to financial services, making it more affordable and accessible.

>> Nicole Elam, what gives you your greatest hope for the future?

>> I think what gives me the greatest hope for the future is the role that Black banks continue to play in communities.

They are here to stay.

A common question that I often get is, are these banks still valuable today?

And unfortunately, data continues to suggest that Black banks are still valuable today.

Studies show that if you are a Black or brown American, if you have a minority bank in your community, it's more likely that you have a savings account.

It's more likely that you have a checking account.

It's more likely that you have a fair and reasonably priced mortgage and small business loan.

So what gives me hope is that these banks are here to stay and that they've got good work to do.

>> Madam President of the National Bankers Association, thank you for joining "The Chavis Chronicles."

>> Thank you for having me.

>> For more information about "The Chavis Chronicles" and our guests, please visit our website at TheChavisChronicles.com.

Also follow us on Facebook, X, formerly known as Twitter, LinkedIn, YouTube, Instagram, and TikTok.

Major funding for "The Chavis Chronicles" is provided by the following.

At Wells Fargo, diverse representation and perspectives, equity, and inclusion is critical to meeting the needs of our colleagues, customers, and communities.

We are focused on our commitment to diversity, equity, and inclusion, both inside our company and in the communities where we live and work.

Together, we want to make a tangible difference in people's lives and in our communities.

Wells Fargo, the bank of doing.

American Petroleum Institute through APIs Energy Excellence Program, our members are committed to accelerating safety, environmental, and sustainability progress throughout the natural gas and oil industry around the world.

Learn more at API.org/APIEnergyExcellence Reynolds American -- dedicated to building a better tomorrow for our employees and communities.

Reynolds stands against racism and discrimination in all forms and is committed to building a more diverse and inclusive workplace.

At AARP, we are committed to ensuring your money, health, and happiness live as long as you do.

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