Changing the Story America Tells Itself About Race

By Wayne Hare

In 2015, in Vail, Colorado, one of the whitest, least diverse places in the West, the Vail Daily published an opinion piece about race by a local resident named Butch Mazzuca. It was entitled “How to help,” but frankly, it didn’t help at all.  Mr. Mazzuca had decided that Black Americans would be much better off if we just had better leadership and better personal decision-making skills. In other words, “If only Blacks would be more like us white folks and use our good decision-making and leadership skills as examples, they’d be just fine.” 

But there’s a problem here. Black Americans are not like Mr. Mazzuca. We’re not allowed to be like Mr. Mazzuca. It’s hard to address what one television talking head refers to as “This thing that won’t go away” if we think that African Americans’ problems are caused solely by poor decision-making and poor leadership. There’s another factor involved: this thing called racism.

Way back in 1984, Eddie Murphy did a memorable skit on Saturday Night Live. You can still find it on YouTube: He gets himself made up to look like a white man, practicing his new “white person walk” by “keeping my butt really tight.” As he roams around his SNL-created town, he finds that life as a white man is even easier than he’d imagined. When he goes into a bank for a mortgage, for example, he gets the kind of terms that, as a Black man, he’d never dreamed possible. When that skit was made, 36 years ago, banks had long been notorious for racially predatory, discriminatory and exclusionary banking practices. Thirty-six years later, you might think that’s all behind us. But you’d be wrong. 

Recently, The New York Times uncovered the racist practices of the JPMorgan Chase bank in Phoenix, Arizona. 

Jimmy Kennedy, who is Black, had earned over $13 million in his nine-year career as a defensive tackle in the NFL. That makes him the type of wealthy customer banks generally want to court. But when Mr. Kennedy, who had deposited almost $1 million into his JPMorgan account, sought elite “private client” status, which normally only requires an account of $250,000, he got a confusing run-around. Finally, a bank employee, who was also Black, spelled it out for him. “You’re a big African American,” he said. “We’re in Arizona. They don’t see a lot of people like you.” Evidently, Mr. Kennedy, despite his success and his money, scared them.

Mr. Kennedy’s JPMorgan financial advisor, Ricardo Peters, who is also Black, was a victim of racial discrimination as well. After eight successful years and numerous performance awards, Mr. Peters was promoted to a financial advisor position in Sun City West, an affluent area of Phoenix. But when he tried to become a private client advisor, he was not only denied the promotion, but moved from a privileged spot in the heart of his branch to a windowless cubicle in the back. To make matters worse, he was also advised that he needed to pay more attention to how his (white) colleagues viewed him. Evidently, he needed to know his place. 

When Mr. Peters then sought advice from his manager on working with a would-be customer — a woman who’d been awarded almost $400,000 in her son’s wrongful death settlement — he was told that she wouldn’t be a worthy client. “You’ve got somebody coming in from Section 8. This is not money she respects. She didn’t earn it and will just burn through it. You’re not to invest a dime for this lady.” 

Section 8, which refers subsidized housing, is often used as code language for African Americans. Mr. Peters began to suspect that his managers discriminated against Black clients as well as Black employees like him. Almost a year later, he was transferred from Sun City to a less wealthy branch. 

A few months later, in April 2018, Mr. Peters and Mr. Kennedy met. There was good chemistry between the two: Peters became Kennedy’s advisor, and Kennedy began moving $800,000 to JPMorgan. He had been assured that he would get private client status. But Peters still felt that he was not being treated fairly because of his race. So, in August, he filed a formal complaint with the bank. 

In October, Peters was fired, allegedly because of a mundane internal dispute. At least that’s what the bank told him, Peters said. But less than two weeks after Peters filed his complaint, JPMorgan agreed to pay $24 million to end a class action law suit bought by other Black employees, who claimed the bank had discriminated against them as well. 

As for Mr. Kennedy: He never did receive private client status. Instead, he was assigned an inexperienced financial advisor, who was also Black. Kennedy eventually withdrew his money from JPMorgan and filed a grievance with an industry watchdog. In June of 2019, the bank sent him a letter stating that it had found no evidence of discrimination. 

But racial exclusionary practices have long been woven into the fabric of American banking. Banks’ notorious “redlining” policies — refusing to grant mortgages or home improvement loans within black communities — helped devastate those communities. And banks are still practicing discrimination. 

Last year, JPMorgan Chase settled a different lawsuit for $55 million for discriminating against minority mortgage borrowers.

In November 2014, the National Fair Housing Alliance teamed up with the Denver Metro Fair Housing Center to expose racially biased practices by U.S. Bank. In a public statement, the National Fair Housing Alliance said, “U.S. Bank fails to perform basic maintenance and marketing tasks for its bank-owned foreclosures in African American and Latino neighborhoods to the same standard as in White neighborhoods. …”

In the last few years, Wells Fargo and Merrill Lynch paid racial-discrimination settlements for $35.5 million and $160 million, respectively. In 2013, Wells Fargo was again fined $175 million.

Bank of America has been accused by the feds of failing to offer Black and Hispanic homeowners the kind of conventional mortgages that white homeowners with similar profiles are offered. Instead, it has pushed them towards predatory, non-standard mortgages. As a result, many Black homeowners were pushed into foreclosure. The bank was eventually fined more than $335 million for such discriminatory practices. 

Much like Wells Fargo and Bank of America, Citigroup faced serious lawsuits after it was revealed that it charged Black homeowners higher rates and fees for loans, a practice that eventually forced them into foreclosure and resulted in massive defaults. 

Back in 2013, the Consumer Financial Protection Bureau and the Department of Justice filed a joint complaint against National City Bank for charging Black and Hispanic homebuyers higher prices on mortgage loans. PNC Bank was required to pay at least $35 million in restitution to borrowers who were impacted by six years of discriminatory practices. 

Another lawsuit, funded by the U.S. Department of Housing and Urban Development, was filed in February 2020. It accused one of the nation’s largest banks, M&T, of racial discrimination. 

For most Americans, homeownership is not only a primary signal of middle-class status; it is also the primary means of acquiring wealth. There’s a straight line between the challenges Black homeowners face and the persistent gap between the races when it comes to achievement and wealth. Most Americans use homeownership and the equity it eventual brings to fund college for their children, attend to health issues, care for their aging parents and ultimately provide a leg-up for their descendants through inheritance. 

But because of racial discrimination, both past and present, owning a home is much harder for people of color. More than 70 percent of white families own their homes, compared to less than half of Black (and Hispanic) families. That goes a long way in explaining why the median net worth of whites remains nearly 10 times that of blacks. Nearly one in five Black families have zero or negative net worth — twice the rate of white families. Homeownership helps explain why, in 2016, white families had a median net worth of $171,000, compared with $17,600 for African Americans. 

“There is a tendency for people (like Mr. Mazzuca) to think that people who have lower wealth can be cured by individual behavioral changes such as spending more wisely, but that’s not what is driving this wealth gap,” said Kilolo Kijakazi, an Urban Institute fellow whose research focuses on the racial wealth gap. “It really requires getting at the underlying problems that contributed to the huge gap in the first place. And that’s about structural barriers, policies, institutional practices and programs that created this huge divide.”

Mr. Mazzuca isn’t the only person who thinks simplistically that African Americans merely have to follow white examples of personal responsibility. But the problem goes deeper than an inability to make brilliant decisions like white folks do. We don’t love living in blighted neighborhoods. It’s just that, over the years, banks have forced us to endure them. 

Sometimes, however, the struggle for justice pays off: Eventually, Ricardo Peters opened his own successful financial advising firm. 

One hundred and fifty-four years after the war that ended slavery, 150 years or so after the 13th, 14th and 15th amendments to the Constitution guaranteed equal rights and equal citizenship, 63 years after Brown v Board of Education assured equal educational opportunities and 53 years after the 1964 Civil Rights Act once again promised equal rights and treatment, why do we still see so much discrimination when it comes to education, jobs, housing, medical care … and lending institutions? A person might be forgiven for asking, “How serious is America about living up to the ideals of the Founding Fathers?” I think it’s time the country answered that question.