Financial Institutions Could Play Role in Shrinking Wealth Gap
Monday, August 14, 2023
The United States' wealth gap is a persistent and complex issue. Financial institutions could help chip away at it.
The top 10% of income earners own 69% of the wealth, while the lowest 50% have less than 3%.
President and CEO of Verity Credit Union in Seattle Tonita Webb said the issue is even greater between Black and white Americans.
Black people have a long history of being denied loans from banks and other financial institutions. Webb said the first step is for these institutions to understand what communities need.
"Listening to communities to figure out where their roadblocks are, where they have run into challenges," said Webb, "and be able to work at changing the system based off the feedback and co-create solutions together."
Webb said financially underserved communities have lacked the ability to grow generational wealth, which increases the country's wealth gap over time.
She said institutions could also change the way credit scores are calculated.
Credit scores like FICO are used to determine someone's eligibility for a loan. But Webb said Verity Credit Union has been using an Artificial Intelligence program for the last year to calculate it in a different way.
"It takes into consideration reputation," said Webb, "how long you've been at a job, how you pay your rent on time, and other things that FICO doesn't necessarily capture."
Webb said using this new system, her credit union has seen an increase in lending to people who were previously denied.
She said financial institutions can also shrink the wealth gap by increasing homeownership. Programs that require little or no down payment and assist with interest rates can get more families into homes.
Webb said all of this is personal for her because she came from an underserved community.
"I want to change that for underserved communities," said Webb, "and be able to put families in the position to leave something for their kids to build upon, and that is what we're missing."
get more stories like this via email
California tribes are headed to the White House Tribal Nations Summit tomorrow, where they will ask Congress and the Biden administration to create …
A new report shows Maine is exceeding the home-heating goals set forth in its ambitious four-year climate plan to reduce greenhouse-gas emissions…
By India Gardener / Broadcast version by Nadia Ramlagan reporting for the Kent State-Ohio News Connection Collaboration. According to Attorney …
It's estimated that one in three Kentuckians struggles to pay medical bills, and the issue continues to be a driving factor in personal bankruptcy …
Senate lawmakers are soon expected to vote on the Modernizing Opioid Treatment Access Act, legislation introduced this year by Republican Sen…
Health and Wellness
A new program in Utah wants to help first responders learn to recognize and work through their traumatic life events through horsemanship. This …
Health and Wellness
A coalition of Nevada groups is behind a statewide effort to make Nevada an Employment First state. That would align the state with a U.S. Labor …
Government accountability groups want increased transparency in New York criminal court decisions. This comes after a new report finds only 6% of …