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“If we had the data prior to this moment … we might have understood the vulnerable position many small businesses are in,” said Jesse Van Tol, chief executive of the National Community Reinvestment Coalition advocacy group.
More than 50 years after the Fair Housing Act of 1968 outlawed housing discrimination on the basis of race, sex, national origin and religion, segregation persists. According to the advocacy group National Community Reinvestment Coalition of Washington, D.C., nearly three quarters of the neighborhoods designated as high risk are inhabited by the poor. And 64% are minority neighborhoods.
“I don’t think the true pain of this has been discovered yet,” said Dedrick Asante-Muhammad, who serves as chief of race, wealth and community for the National Community Reinvestment Coalition in Washington, D.C.
NCRC also looked at the correlation between gentrification and so-called Opportunity Zones, areas designated by city and state leaders for development and tax breaks.
“It’s a combination of economic activity, land use and geography,” said NCRC director of research Jason Richardson. The nonprofit coalition advocates for private reinvestment in underserved communities.
“This agreement is a product of all of our efforts. This commitment provides First Merchants Bank an opportunity to increase its Community Reinvestment Act activity, and to direct it where it is needed most,” said Jesse Van Tol, NCRC CEO. “This is how the Community Reinvestment Act should work for banks and communities alike.”
“This agreement with First Merchants Bank is a significant step forward and reflects practices that all banks can adopt in order to address the racial wealth divide,” said Dedrick Asante-Muhammad, NCRC chief of race, wealth and community.
Kathryn Orr, director of entrepreneurship at the National Community Reinvestment Coalition, describes this current push to support Black businesses as a “reawakening.” “People are recognizing how economics are at the center of racial inequality,” she said.
There are still many aftereffects from history. For example, even though redlining was banned in 1968, a 2018 study by the National Community Reinvestment Coalition found practices decades ago still had economic and racial segregation implications for many cities today.
“I don’t think the true pain of this has been discovered yet,” said Dedrick Asante-Muhammad, who serves as chief of race, wealth and community for the National Community Reinvestment Coalition in Washington, D.C.
A new study from the National Community Reinvestment Coalition finds that D.C. ranked 13th on the list of “most intensely gentrified” cities across the country from 2013 to 2017, trailing behind San Francisco, Denver, Boston, Miami, New Orleans, and other cities.
A 2019 study from the National Community Reinvestment Coalition found that from 2000 to 2013, at least 135,000 Black and Hispanic residents were affected by gentrification negatively, including displacement, in big cities and small communities across the country.
Black-owned businesses get turned down for loans at a rate more than twice as high as White-owned businesses, according to data from the Federal Reserve. Even with similar credit scores and pedigrees, the National Community Reinvestment Coalition found that Black borrowers were 8% less likely to receive loan approval.
“I think he will chart his own path but certainly what we’ve seen from him so far is continuing to push this administration’s agenda,” Van Tol said.
“It is really time to evaluate the infrastructure of American finance, and identify why, not just lending, but sustainable, affordable lending is so hard for all lower- and moderate-income people, as well as very small businesses to come by,” Petrou said. “The United States financial system has become incredibly unequal in many ways.”
