The Biden administration announced a series of new efforts to advance racial economic equality during the annual Freedman’s Bank Forum in Washington, DC Tuesday.
Recognizing the history of the former Freedman’s Savings Bank, which held accounts for formerly enslaved people before its eventual collapse in 1874, the forum served as an opportunity for government and business leaders to address a growing racial and wealth divide. And Treasury Secretary Janet Yellen, who said racial justice was high on the government’s agenda, said that “in the years since, our economy has failed to deliver on the nation’s promise of equal opportunities for all”.
Recent efforts to address this failure and invest in overlooked communities have included the implementation of America’s bailout plan, as well as passage of the CHIPS and Science Act, the bipartisan Infrastructure Act and the Inflation Reduction Act, Yellen said. For example, data released Tuesday by the Office of Evaluation Sciences on the federal government’s two rounds of pandemic rental assistance showed that black renters were “grossly overrepresented” among those who benefited from the program.
“We try to invest in communities that have often been ignored or overlooked,” Yellen said. “Our economic concept supports our strong belief that harnessing the potential of all communities is not only the moral right thing, but also a promising strategy for inclusive economic growth.”
Yellen — who also ended speculation that she could soon leave the Treasury Department — went on to highlight the expanded child tax credit under the American Rescue Plan, which gave families monthly checks worth $250 to $300 per child before he ended last December another example. Some experts credit the program with temporary reductions in child poverty, and public policy professors at the University of Michigan said in a recent report that the payments “reduced families’ overall material hardships and particularly their food insecurity.” (The letter examined very low-income families.)
“Dozens of millions of families received very substantial funding that is estimated to have reduced child poverty rates by almost 30% and the number of adults living with children in under-nourished households by a third,” Yellen said.
“Now that the child tax break has expired and some rent-aid programs have been exhausted, some communities of color may have a less optimistic view of the US economy. ”
But now that the child tax break has expired and some rent-aid programs have been exhausted, some communities of color may have a less optimistic view of the US economy. The rising cost of living has hit Black, Hispanic and Native American households particularly hard, and in addition to a worrying racial divide in homeownership, the number of Black families who can afford to buy a home has fallen over the past year thanks to rising mortgages Prices.
Still, government officials said on Tuesday they are moving forward with new programs that could also ensure a fairer future.
A newly formed 25-member Treasury Advisory Committee on Racial Equity, chaired by Michael Nutter, professor at Columbia University and former Mayor of Philadelphia, will provide expertise and make recommendations on issues such as financial inclusion, access to capital and more.
Vice President Kamala Harris also revealed that members of the Economic Opportunity Coalition, a joint effort by the federal government and private sector giants like Bank of America BAC,
and Google GOOGL,
have provided $1 billion for community banks serving rural communities and communities of color. (Bank of America announced Tuesday that it alone would double its existing low-cost deposits at minority-owned financial institutions and add $100 million in deposits.)
“Together we know here that we have the ability and the responsibility — and the duty, dare I say it — to achieve Freedman’s Bank’s vision,” Harris said. “And that’s why we’re gathered here.”
A White House briefing Tuesday said the government’s Office of Management and Budget will issue a memorandum to federal agencies to set targets for increasing government contracts for “small, disadvantaged businesses” while the Minority Business Development Agency grants will announce $100 million in technical assistance grants to help “underserved entrepreneurs.”
Marcia Fudge, Secretary of State for the Department of Housing and Urban Development, also speaking at the Freedman’s Bank Forum on Tuesday, also said HUD will also seek feedback on the barriers to the issuance of low-balance-sheet mortgages.
Many homes in black-majority cities like Detroit and Memphis could sell for under $100,000, but it’s difficult to get a mortgage for that low, according to Local Housing Solutions, a housing policy platform run by the Housing Solutions Lab managed by the NYU Furman Center.
“We know that people who live in less expensive or rural areas often find it difficult to get a mortgage on a less expensive house,” Fudge said.
