Story at a glance
- Banks and financial institutions have historically discriminated against Black Americans, creating a racial wealth gap.
- As the nation confronts its racist past, companies and organizations are examining their own role in institutional racism.
- Citi is investing $1 billion in the Black community as part of its commitment to becoming an anti-racist institution.
When Citi was founded in 1812 as the City Bank of New York, slavery was still legal. More than a century later, the multinational investment bank and financial services corporation is committing to becoming an anti-racist institution.
“Addressing racism and closing the racial wealth gap is the most critical challenge we face in creating a fair and inclusive society and we know that more of the same won’t do,” said Citi CEO Michael Corbat in a statement. “We are bringing together all the capabilities of our institution – our people, our lines of business, our balance sheet, and our philanthropy – like never before to combat the impact of racism in our economy. This is a moment to stand up and be counted, and Citi is committed to leading the way and investing in communities of color to build wealth and strong financial futures.”
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Over the next three years, Citi’s foundation and several of its core businesses have committed $550 million towards homeownership and affordable housing, $350 million for Black-owned business suppliers, $50 million of investment in capital for Black entrepreneurs and $100 million in grants for “community change agents” addressing racial equity, among other initiatives.
“We are in the midst of a national reckoning on race, and words are not enough. We need awareness, education and action that drive results,” said Mark Mason, Citi’s CFO, in a statement. “The commitments we are announcing today are just the starting point. By harnessing the central role Citi plays in local economies and the financial lives of Americans, we are determined to help close the racial wealth gap and help build an anti-racist economy and society.”
The initiative hopes to expand banking and access to credit for communities of color, invest in Black entrepreneurship and affordable housing, promoting Black homeownership and becoming an anti-racist institution.
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This last commitment comes from the academic idea of anti-racism, which is an active process of identifying and eliminating racism within institutions, social systems and other parts of society. Banks and other financial institutions in the United States have long discriminated against Black Americans, limiting their access to credit and capital. And while the federal government has since instituted several non-discrimination policies, an analysis by Citigroup found that Black-owned businesses still get turned down at twice the rate as white business owners and Black entrepreneurs receive only 1 percent of venture capital funding.
As recently as 2012, Marketwatch found that Citi charged African Americans an interest rate 3.38 times more than other borrowers. Since the police killing of George Floyd inspired mass protests against racism earlier this year, however, many companies are seeking to make amends.
“Citi is taking a hard look at its own policies and practices to actively identify potential bias to help level the playing field for communities of color,” the company said in a release.
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