End of the Road for Monzo Charter Isn’t End of the Road for U.S. Unit

The Financial Brand, October 5, 2021, End of the Road for Monzo Charter Isn’t End of the Road for U.S. Unit

While the U.K. neobank’s plans to charter an American bank appear to be stymied for now, avenues like banking as a service arrangements remain on the table. Monzo’s U.S. waitlist is still accepting new applicants and job postings for the San Francisco-based operation remain open.

The National Community Reinvestment Coalition opposed the Monzo application because it felt the neobank was not demonstrating a significant enough commitment to serving community needs. “Monzo is seeking a designation as a limited purpose bank, which would only need to engage in community development financing, not retail lending,” the group stated. The letter sketched out what the group believes any online lender should do to meet Community Reinvestment Act requirements.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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