House passes ‘long overdue’ financial equity package

The House on Wednesday passed a package that addresses racial disparities in employment, income and access to affordable credit. 

The package intends to combat inequities by increasing access to federal credit unions in underserved communities and promote access to fair housing. It will also provide funding for minority-owned financial institutions and community development financial institutions “whose work is critical to serving low-income communities,” said co-sponsor Rep. Carolyn Maloney (D-N.Y.).

Rep. Alma Adams (D-N.C.) tweeted that the package “builds on ongoing work” and is “long overdue.”

One of the bills in the package, the Expanding Financial Access for Communities Act, was previously introduced by Rep. Gwen Moore (D-Wis.) during her time on the Financial Services Committee.

“Growing up during the Civil Rights movement, I saw Black Americans gain access to civil rights long denied to them and finally receive basic accommodations,” Moore said in a release. “But even after gaining these freedoms, Black people had to and continue to play catch up financially.”

In 2017, the Federal Reserve found that more than half of Black-owned firms that applied for loans were turned down. And during the pandemic, many Black-owned firms were denied Paycheck Protection Program loans from banks, forcing them instead to turn to financial tech loans. 

Similar trends follow applicants of color when it comes to applying for personal loans, like mortgages. The Associated Press reported last August that lenders were 80 percent more likely to reject Black applicants than white applicants. 

The issue leads not only to a potential lack of homeownership, but an inability to build generational wealth. 

“The people who have been sidelined are disproportionately Black and brown people,” said co-sponsor Nikema Williams (D-Ga.) in a statement to The Hill. “Nearly 14 percent of all Black households are unbanked. … We are taking a step to end these financial injustices and ensure that everyone can share in the promise of America — no matter their bank account, no matter their ZIP Code.”

In addition to providing funding, the package will also track data on banks’ diversity and inclusion, assess how they serve LGBTQ+ communities and ensure mortgage lenders are working with non-English speaking borrowers in their native languages.

Other parts of the package, like the amendments introduced by Rep. Ayanna Pressley (D-Mass.), address inclusivity for Americans with disabilities.  

Speaking before the House on Wednesday, Pressley said policies and financial systems have forced Americans with disabilities into a “second class standard of living.”

Pressley’s amendments to the act prohibit financial creditors from discriminating against consumers who are disabled, increase access to interpretation services including American Sign Language and require corporations to disclose the self-identification disability statuses of their board of directors and executive officers.

“Numerous studies have shown that simply disclosing this information can have a positive outcome on corporate board diversity, which in turn positively impacts corporate financial performance,” Maloney said in a statement. 

Sponsored by Rep. Maxine Waters (D-Calif.) and also co-sponsored by Democratic Reps. Jesús García (Ill.), Joyce Beatty (Ohio) and Brad Sherman (Calif.), the act passed 215-207 along party lines.