WEBVTT - BONUS EPISODE: Black America Confronts a Credit Crunch 0:00:03.400 --> 0:00:07.200 This is a Bloomberg Radio special, Black America Confronts a 0:00:07.200 --> 0:00:11.200 Credit crunch Shanali bask Though many Black Americans have been 0:00:11.200 --> 0:00:14.800 celebrating Juneteenth for years, it's only been two since the 0:00:14.920 --> 0:00:18.919 US finally declared it a federal holiday. While President Abraham 0:00:19.000 --> 0:00:23.239 Lincoln's Emancipation Proclamation officially freed slaves in eighteen sixty three, 0:00:23.800 --> 0:00:26.960 many areas in the South didn't follow through for some time. 0:00:27.640 --> 0:00:31.520 It was on June teenth, June nineteenth, eighteen sixty five 0:00:31.840 --> 0:00:35.280 that Galveston, Texas released the very last enslaved people in 0:00:35.320 --> 0:00:38.560 the country. But the day comes with the stark recognition, 0:00:39.200 --> 0:00:42.120 as far as we've come since slavery, we still have 0:00:42.280 --> 0:00:44.920 a ways to go for racial equity in the country 0:00:44.960 --> 0:00:48.920 for Black Americans, particularly when it comes to wealth. A 0:00:48.960 --> 0:00:52.519 Brookings Institute report shows that in twenty nineteen, the median 0:00:52.640 --> 0:00:55.480 net worth of a typical white household was nearly eight 0:00:55.560 --> 0:00:58.840 times higher than that of a typical black household. One 0:00:58.920 --> 0:01:02.640 key factor drive the disparity is access to credit. Everything 0:01:02.640 --> 0:01:05.679 from business loans to securing a mortgage remains a challenge 0:01:05.680 --> 0:01:08.600 for many black families. A Saint Louis FED report from 0:01:08.640 --> 0:01:11.880 that same year found that Black businesses were denied loans 0:01:11.880 --> 0:01:15.039 at much higher rates than their white counterparts, and today's 0:01:15.040 --> 0:01:19.560 economic landscape is no friendlier to Black Americans as recession 0:01:19.560 --> 0:01:23.119 fears and recent banking turmoil loom large. Over the next hour, 0:01:23.200 --> 0:01:26.080 we'll take a closer look at the challenges black communities 0:01:26.080 --> 0:01:28.440 are facing as we see a broader pullback and lending. 0:01:28.640 --> 0:01:31.679 We're joined now by Cynthia Day, She's the president and 0:01:31.800 --> 0:01:35.200 CEO of Citizens Trust Bank, one of the very limited 0:01:35.240 --> 0:01:38.160 number of black owned banks in the country, and Harold Butler, 0:01:38.240 --> 0:01:41.240 who leads the Diverse Financial Institutions Group at Wall Street 0:01:41.319 --> 0:01:44.720 Giant City Group. Cynthia, let's start with you, what does 0:01:44.800 --> 0:01:46.040 Juneteenth mean to you? 0:01:46.400 --> 0:01:48.760 I first have to acknowledge the fact that we're talking 0:01:48.760 --> 0:01:52.120 about Juneteenth, when a couple of years ago there were 0:01:52.160 --> 0:01:54.320 millions of people in our country that didn't even know 0:01:54.400 --> 0:01:58.400 June tenth existed. So today it's becoming the national conversation 0:01:59.000 --> 0:02:02.240 and the recognition of the significance of Juneteenth, I think, 0:02:02.640 --> 0:02:05.760 in itself is progress for me personally. When I think 0:02:05.800 --> 0:02:09.240 of Juneteenth, I think of a time to reflect and 0:02:09.360 --> 0:02:14.400 celebrate the American African American spirit, its resilient and the 0:02:14.560 --> 0:02:18.000 unsung contributions that have been made to the American society. 0:02:18.360 --> 0:02:22.160 It's also a time to look forward and recognize the 0:02:22.280 --> 0:02:26.679 deep impact and the cost of this, you know, his 0:02:26.760 --> 0:02:30.280 these historical events to the Black community and it She 0:02:30.400 --> 0:02:35.320 continuously reminded us to continue to press forward and to 0:02:35.480 --> 0:02:39.480 press for economic parity and financial well being in an 0:02:39.520 --> 0:02:40.800 African American community. 0:02:41.000 --> 0:02:45.560 As we set up the conversation about parity here, maybe Cynthia, 0:02:45.639 --> 0:02:47.919 you can kind of describe the role of black owned 0:02:47.919 --> 0:02:49.120 banks and black communities. 0:02:49.480 --> 0:02:52.320 Our bank has been around for, you know, over one 0:02:52.400 --> 0:02:56.560 hundred years. Our founding mission was to create parity. And 0:02:56.600 --> 0:02:59.800 the fact that our institutions are here, I think we've 0:03:00.080 --> 0:03:03.480 we've seen this tom and tom during the Great Recession 0:03:03.560 --> 0:03:07.679 and the pandemic, where we get into credit constrained areas 0:03:07.760 --> 0:03:10.760 and there's no access or people that understand the plight 0:03:10.840 --> 0:03:14.280 of these communities and what are as willing to extend 0:03:14.320 --> 0:03:16.639 credit for good reasons. 0:03:16.160 --> 0:03:17.639 In economic downcycles. 0:03:18.040 --> 0:03:21.000 But it takes a bank or an African American business 0:03:21.000 --> 0:03:24.200 that are that are in and of those communities. We 0:03:24.240 --> 0:03:27.200 saw this during the during the Great Recession, we saw 0:03:27.200 --> 0:03:30.800 it during the pandemic, whether it was through PPP or 0:03:30.880 --> 0:03:31.880 traditional credit. 0:03:32.480 --> 0:03:33.040 We were there. 0:03:33.160 --> 0:03:36.160 We saved businesses, we saved jobs, we saved home we 0:03:36.240 --> 0:03:38.720 save families, We saved communities. 0:03:39.120 --> 0:03:41.640 Now, Harold over at City Group, you're really spearheaded the 0:03:41.640 --> 0:03:45.720 program to work with minority depositary institutions. And that signals 0:03:45.760 --> 0:03:49.440 to me that you saw early on the ripple effects 0:03:49.600 --> 0:03:52.280 from big bank to medium sized bank to smaller bank 0:03:52.400 --> 0:03:57.680 across communities on the flow of capital. You know, why 0:03:57.680 --> 0:03:59.880 did you start this program? And you know where does 0:03:59.880 --> 0:04:02.600 the stand today? And what concerns do you have given 0:04:02.600 --> 0:04:04.760 that there are concerns about a credit crunch. 0:04:04.920 --> 0:04:08.120 You know, we began this journey, you know, much before 0:04:08.760 --> 0:04:12.480 you know the world had its crises or took part 0:04:12.920 --> 0:04:17.880 and witness the murder of George Floyd. And you know, 0:04:17.960 --> 0:04:20.400 for us as a firm post that, it was really 0:04:20.480 --> 0:04:24.760 about determining what could we do to help make things better? 0:04:25.000 --> 0:04:25.120 Right? 0:04:25.240 --> 0:04:30.600 What role could city play at helping to achieve parody 0:04:30.640 --> 0:04:34.039 as we just talked about reducing the racial wealth gap, 0:04:34.640 --> 0:04:38.280 things of that nature. When you look at communities that 0:04:38.320 --> 0:04:42.000 are underinvested and underrepresented, they all have a common theme 0:04:42.080 --> 0:04:47.520 and that common theme is the lack of banking infrastructure. 0:04:47.040 --> 0:04:50.000 And they what about this moment in time. What does 0:04:50.040 --> 0:04:51.720 it feel like to run a bank today? 0:04:52.360 --> 0:04:56.280 Like many economic cycles that we've gone through, it just 0:04:56.320 --> 0:04:59.280 requires a lot of resilience. It could be very difficult. 0:04:59.600 --> 0:05:02.800 We have to make sure that we are strong and 0:05:03.400 --> 0:05:06.560 well managed and well focused and well capitalized so we 0:05:06.680 --> 0:05:10.120 can help our customers. They needed us, They needed us 0:05:10.200 --> 0:05:13.960 during PPP, they needed us during the Great Recession. 0:05:14.560 --> 0:05:15.360 They need us. 0:05:15.480 --> 0:05:20.680 I think partnerships with people like City and other corporations. 0:05:20.839 --> 0:05:25.000 I think that united in collaborative front can help us 0:05:25.040 --> 0:05:28.800 create greater impact. It can help us close these wealth gaps. 0:05:29.080 --> 0:05:32.000 It can help us increase home ownership. It could help 0:05:32.080 --> 0:05:36.679 us create healthy ecosystem within the communities that we serve. 0:05:36.720 --> 0:05:38.719 And I think it will be beneficial to our country 0:05:38.839 --> 0:05:41.640 because I think if we take this fourteen percent of 0:05:41.640 --> 0:05:45.680 this population, it can increase GDP. So I think this 0:05:45.760 --> 0:05:49.720 is not just a minority bank. It's not an underrepresented 0:05:49.960 --> 0:05:55.560 or under invested community. This is a national issue. 0:05:55.760 --> 0:05:59.280 Speaking of challenges, I think one major concern is a 0:05:59.320 --> 0:06:02.560 recession and what a recession would mean, what doesn't mean 0:06:02.640 --> 0:06:06.000 for all small business owners, let alone black small business owners, 0:06:06.040 --> 0:06:10.039 let alone black female small business owners. Another question that 0:06:10.120 --> 0:06:13.600 is Embedded in that too, is this decade's long disparity, 0:06:13.640 --> 0:06:16.760 this widening gap between the wealth of Black Americans and 0:06:16.760 --> 0:06:19.320 white Americans that has just expanded over time, and what 0:06:19.400 --> 0:06:23.240 a recession would mean for that. Does it create setbacks? 0:06:23.839 --> 0:06:27.039 What do you tell business owners communities that might be 0:06:27.080 --> 0:06:30.560 worried that some of the progress might be challenged in 0:06:30.600 --> 0:06:31.560 the next year or so. 0:06:31.839 --> 0:06:35.040 You know, we just keep the conversation open with our customers. 0:06:35.400 --> 0:06:37.960 We are consistently talking to them. We had to talk 0:06:38.000 --> 0:06:41.800 to them during this recent bank failures. We have to 0:06:41.880 --> 0:06:46.920 keep reassuring them that you know, we're here, We're with them, 0:06:47.200 --> 0:06:50.760 we are feeling some of the same impact and effects. 0:06:51.160 --> 0:06:52.840 We've been doing this for one hundred years. 0:06:52.880 --> 0:06:58.880 I keep repeating that we understand these different cycles that 0:06:58.920 --> 0:07:02.720 we go through. It does continue to take that conversation 0:07:03.080 --> 0:07:06.120 making sure we're there during those recessionary times. 0:07:06.160 --> 0:07:07.680 And I know that all of us. 0:07:07.600 --> 0:07:12.040 Are aware of that that during recessions, historically, African American 0:07:12.080 --> 0:07:15.920 communities have a deeper and more severe impact with higher 0:07:16.040 --> 0:07:21.360 business closures, higher job loss, hire unemployment, steep losses and 0:07:21.440 --> 0:07:25.480 home values and more importantly, you. 0:07:25.440 --> 0:07:28.160 Know the lag in the recovery. 0:07:28.680 --> 0:07:32.960 We saw the same issues and trends during the pandemic 0:07:33.600 --> 0:07:37.080 with you know, people of color seeing disproportionately higher job 0:07:37.120 --> 0:07:41.000 and wage loss. So it's hard to provide that comfort. 0:07:41.360 --> 0:07:44.240 But what we can say is, you know we were 0:07:44.320 --> 0:07:46.120 here with you during these times. 0:07:46.880 --> 0:07:48.200 We don't have a crystal ball. 0:07:48.440 --> 0:07:51.320 We don't know where all this is going, but we 0:07:51.360 --> 0:07:54.320 do know one thing. We're still committed. We were here 0:07:54.440 --> 0:07:57.840 to help with those providing access to capital for businesses 0:07:57.880 --> 0:08:01.760 during those times. But we do know we've been through 0:08:01.760 --> 0:08:06.240 this before. We're resilient, Our customers are resilient, and we're 0:08:06.240 --> 0:08:08.880 going to be there to help them through this time. 0:08:09.080 --> 0:08:11.800 Harold the question for you, and i'd like Cynthia away 0:08:11.800 --> 0:08:13.400 on on this too. I know over at to the group, 0:08:13.440 --> 0:08:15.040 we've done a lot of work with the US government, 0:08:15.560 --> 0:08:17.880 and if you think about the role the government plays 0:08:17.920 --> 0:08:21.360 both in supporting large banks, let alone black owned banks, 0:08:21.760 --> 0:08:24.840 medium and small size banks, if you think about kind 0:08:24.840 --> 0:08:27.240 of the work they've done to kind of foster the 0:08:27.280 --> 0:08:30.760 growth of minority depository institutions, where we know that the 0:08:30.840 --> 0:08:34.040 number has shrink over a wide number of years. What 0:08:34.160 --> 0:08:36.920 can they and should be they do? What can they 0:08:36.960 --> 0:08:38.199 and should they be doing? 0:08:38.559 --> 0:08:40.560 You know, I think it's important for our government to 0:08:40.600 --> 0:08:46.800 continue to focus as they are right on creating programs, 0:08:46.920 --> 0:08:51.520 doing things that can uplift and support the need to 0:08:51.640 --> 0:08:56.560 change the narrative broadly. They're not easy, and I don't 0:08:56.559 --> 0:09:01.120 think anybody is under a delusion that it would be easy. 0:09:01.200 --> 0:09:05.360 These are tough things to sometimes, you know, have conversations about. 0:09:05.360 --> 0:09:08.040 But the important thing is that the government continues to 0:09:08.080 --> 0:09:10.960 do what it does and to lead these conversations to 0:09:11.000 --> 0:09:14.240 be a part of solutioning things that make sense for 0:09:14.320 --> 0:09:17.040 the space, because then I think we get to a 0:09:17.040 --> 0:09:17.640 better place. 0:09:17.960 --> 0:09:21.240 I agree with what Harold has laid out there, and 0:09:21.320 --> 0:09:24.920 I will say during the pandemic and during the bake failures, 0:09:24.960 --> 0:09:29.880 I think that the swiftness with which the government moved 0:09:29.960 --> 0:09:32.240 and some of the programs they put in place was 0:09:32.640 --> 0:09:35.920 very helpful and it really stopped us short of a 0:09:36.080 --> 0:09:40.959 catastrophic events more catastrophic than what we had during the pandemic. 0:09:41.520 --> 0:09:42.920 One of the number one things on my. 0:09:42.960 --> 0:09:46.840 List that I think would be helpful is to let 0:09:47.400 --> 0:09:53.040 like things and like businesses participate in a meaningful and meaningful. 0:09:52.600 --> 0:09:55.000 Way as vendor suppliers. 0:09:55.559 --> 0:09:59.800 There are trillions of dollars that flow within the governmental enterprises, 0:10:00.160 --> 0:10:04.079 and I think the supplier should reflect the diverse tapestry 0:10:04.080 --> 0:10:04.959 of the people they serve. 0:10:05.640 --> 0:10:08.200 And there are effective ways in which to accomplish this. 0:10:08.360 --> 0:10:13.240 I mean, we can encourage partnerships between minority suppliers, banks 0:10:13.640 --> 0:10:15.320 and other corporations like City. 0:10:16.240 --> 0:10:18.240 This can be effective, it can be efficient. 0:10:18.880 --> 0:10:22.720 Yet it provides for opportunities to grow minority businesses, to 0:10:22.800 --> 0:10:26.360 create jobs. It will increase home ownership, you can build 0:10:26.440 --> 0:10:30.760 generational wealth. It's something that we should be doing and 0:10:30.840 --> 0:10:33.600 something I think that we should be committed to make 0:10:33.640 --> 0:10:34.120 it happen. 0:10:34.480 --> 0:10:37.960 Special thanks to Cynthia Day, president and CEO of Citizens 0:10:38.000 --> 0:10:40.440 Treuss Bank, and Harold Butler, the head of the Diverse 0:10:40.480 --> 0:10:44.840 Financial Institutions Group at Citygroup, for joining us. Ryan Williams 0:10:44.880 --> 0:10:47.400 founded Cadre in twenty fourteen as a way for more 0:10:47.440 --> 0:10:50.760 investors to get access to commercial real estate markets. He 0:10:50.800 --> 0:10:53.680 grew up in Baton Rouge, Louisiana, and started investing in 0:10:53.720 --> 0:10:56.320 real estate while he went to college at Harvard University. 0:10:56.920 --> 0:10:59.080 When he was in his twenties, he went to almost 0:10:59.160 --> 0:11:01.360 a dozen banks for loans for investing in that real 0:11:01.480 --> 0:11:05.040 estate and was turned away by many. The bank willing 0:11:05.040 --> 0:11:07.839 to give him a loan Citizens Trust Bank that was 0:11:07.880 --> 0:11:10.800 a firm run by our last guest, Cynthia Day. For 0:11:10.920 --> 0:11:14.040 Ryan Williams, his relationship with citizens Trust Banks set him 0:11:14.080 --> 0:11:17.400 on a path to eventually starting Cadre. Ryan, talk to 0:11:17.520 --> 0:11:20.720 us about how you're thinking about this June teenth June team. 0:11:20.800 --> 0:11:24.560 To me, it's really a symbol freedom. You know, it's 0:11:24.559 --> 0:11:27.439 the commemoration of the end of slavery in the US. 0:11:27.760 --> 0:11:30.360 It's deeply personal to me because I have family members 0:11:30.360 --> 0:11:34.440 who were enslaved in Texas, and it's a reminder of 0:11:34.600 --> 0:11:39.360 the fact that there's still far too many Americans, especially 0:11:39.400 --> 0:11:43.640 Black Americans, that are fighting for economic freedom and opportunity 0:11:44.080 --> 0:11:46.959 and social freedom and opportunity. For me, it's really about 0:11:47.000 --> 0:11:51.040 how can I use my platform, my network to create 0:11:51.080 --> 0:11:56.160 greater financial opportunity, whether that's democratizing access to alternatives like 0:11:56.160 --> 0:11:59.600 we're doing at Cadre, or whether it's helping advocate for 0:12:00.360 --> 0:12:03.679 both private and public action to close the racial wealth gap. 0:12:03.800 --> 0:12:06.720 When you think about kind of getting through this credit 0:12:06.760 --> 0:12:10.040 crunch and the fact that people are worried about small 0:12:10.080 --> 0:12:13.240 banks in general, but the black owned banks in America 0:12:13.320 --> 0:12:16.600 have been under pressure for decades. How do black owned 0:12:16.600 --> 0:12:19.280 banks and black communities that rely on black owned banks 0:12:19.559 --> 0:12:21.520 really see through this credit crunch. 0:12:21.760 --> 0:12:24.280 Yes, I mean, I believe it's a combination of public 0:12:24.320 --> 0:12:25.760 and private partnership. 0:12:25.920 --> 0:12:26.080 You know. 0:12:26.120 --> 0:12:29.240 I believe that there needs to be proactive action taken 0:12:29.480 --> 0:12:34.440 by the government, whether that's helping incentivize private investment into 0:12:34.480 --> 0:12:37.360 many of the banks to help further capitalize these banks 0:12:37.400 --> 0:12:40.679 to ensure that they can continue to lend to their communities, 0:12:41.679 --> 0:12:47.520 or whether that's entrepreneurs and companies taking action to intentionally 0:12:47.559 --> 0:12:49.880 funnel capital to many of these banks that have been 0:12:49.920 --> 0:12:53.160 the bedrock for their community. It's ultimately about the flow 0:12:53.160 --> 0:12:57.520 of capital, and it's ultimately about incentivizing those in the 0:12:57.520 --> 0:13:00.840 private sector and those in the public sector to do 0:13:00.920 --> 0:13:05.600 more to accelerate that flow of capital into these banks 0:13:05.600 --> 0:13:06.239 and communities. 0:13:06.360 --> 0:13:08.959 Maybe talk a little bit about what those solutions could 0:13:09.000 --> 0:13:11.800 look like, because you're one of the people that has 0:13:11.840 --> 0:13:14.800 worked with other entrepreneurs and that has worked with large 0:13:14.840 --> 0:13:17.560 financial institutions to get the ball rolling. 0:13:17.960 --> 0:13:22.840 One of the most encouraging solutions that I've seen was 0:13:23.679 --> 0:13:27.920 the way JP Morgan stepped up to help infuse capital 0:13:27.960 --> 0:13:32.440 and to challenge banks over the past really three to 0:13:32.520 --> 0:13:36.600 four months and created effectively a syndicate. Now, it didn't 0:13:36.679 --> 0:13:41.680 ultimately have the result of stabilizing First Republic in this case, 0:13:42.320 --> 0:13:46.800 but it did show that this collective action when banks 0:13:46.880 --> 0:13:51.080 come together or financial institutions come together to invest and 0:13:51.120 --> 0:13:55.400 those that are struggling, can ultimately lead to a result 0:13:55.400 --> 0:13:56.719 in more opportunity. 0:13:56.880 --> 0:13:58.960 I'm glad you mentioned the biggest banks here too. I'm 0:13:59.000 --> 0:14:00.959 glad you mentioned JP Moore again. We're also talking to 0:14:01.000 --> 0:14:04.120 Goldman and City Group and different banks who are looking 0:14:04.160 --> 0:14:07.920 to work to finance black entrepreneurs. Talk a little bit 0:14:07.960 --> 0:14:11.400 more about the role of the financial system, especially because 0:14:12.120 --> 0:14:15.080 in this year we're watching the biggest banks get bigger, 0:14:15.280 --> 0:14:18.160 which means the eyes are really on them to make change. 0:14:18.280 --> 0:14:20.720 It's right, Yeah, I mean, I think the divide and 0:14:20.760 --> 0:14:26.240 delta between the haves and have nots is increasing faster 0:14:26.320 --> 0:14:29.120 than it has in recent memory. One of the best 0:14:29.280 --> 0:14:33.760 approaches here is the largest banks thinking about ways to 0:14:33.880 --> 0:14:39.960 create syndicates, partnerships and investments that elevate banks that maybe 0:14:40.000 --> 0:14:43.360 aren't directly competitive with them, but have specialized focused on 0:14:43.400 --> 0:14:46.240 communities that they're not reaching or can't reach, or that 0:14:46.400 --> 0:14:50.640 offers certain you know, loans to certain types of companies 0:14:50.720 --> 0:14:55.440 rather that otherwise would not be capitalized. And so I 0:14:55.480 --> 0:14:58.600 really think that American ingenuity. You know, some of the 0:14:58.720 --> 0:15:02.160 unique elements of each region of our country are financed 0:15:02.160 --> 0:15:05.640 by many of these regional community ranged banks, and without 0:15:05.960 --> 0:15:10.120 government or larger bank action, I think you're bound to 0:15:10.120 --> 0:15:15.160 see many ultimately fail or lose market position. 0:15:15.520 --> 0:15:19.040 When you think about the involvement of larger banks into 0:15:19.480 --> 0:15:23.160 the minority depositary institutions, black owned banks and black owned 0:15:23.200 --> 0:15:25.840 businesses for that matter. With all the commitments that have 0:15:25.880 --> 0:15:27.800 been made over the last couple of years, how do 0:15:27.840 --> 0:15:29.400 you feel about the pace of progress? 0:15:29.440 --> 0:15:32.960 Now, Yeah, it was it was incredibly encouraging to see, 0:15:33.400 --> 0:15:38.080 you know, so many institutions and corporations discuss, you know, 0:15:38.120 --> 0:15:41.560 how important they felt it was to ensure there's greater 0:15:41.600 --> 0:15:47.280 economic justice and opportunity, you know, commit to various organizations 0:15:47.280 --> 0:15:52.000 that are focused on creating more economic opportunity and access 0:15:53.080 --> 0:15:56.080 by and larger I think it's been pretty discouraging and 0:15:56.160 --> 0:15:59.440 disappointing that a lot of those commitments and a lot 0:15:59.480 --> 0:16:03.400 of those statements have not been met with any kind 0:16:03.400 --> 0:16:06.920 of accountability. There's been no progress report of note that 0:16:07.000 --> 0:16:09.720 I see that analyze whether these commitments are being met, 0:16:10.200 --> 0:16:12.880 and so I think this Juneteenth is actually an incredible 0:16:12.880 --> 0:16:17.280 opportunity for many of these corporations to look inwards, to 0:16:17.360 --> 0:16:20.200 hold themselves accountable for the commitments that they made in 0:16:20.240 --> 0:16:25.000 the immediate aftermath of June teenth, and you know, to 0:16:25.000 --> 0:16:28.200 also ensure that at a time when you know, things 0:16:28.320 --> 0:16:33.359 like diversity or inclusion on a lot of different dimensions 0:16:33.400 --> 0:16:36.440 can be overlooked for you know, solving the most pressing 0:16:36.520 --> 0:16:41.640 business issues, that those commitments, you know, don't get completely 0:16:41.760 --> 0:16:42.240 washed out. 0:16:42.600 --> 0:16:44.760 Let's also talk about the fact that you're an entrepreneur. 0:16:44.840 --> 0:16:47.320 You're an entrepreneur who look to black owned banks to 0:16:47.320 --> 0:16:50.200 help get financing as you really got off the ground. 0:16:50.520 --> 0:16:53.120 We've talked about this a couple of times before. Tell 0:16:53.200 --> 0:16:55.120 us a little bit about the role they played and 0:16:55.400 --> 0:16:57.720 why they were so important relative to the big banks. 0:16:58.120 --> 0:16:58.760 Absolutely. 0:16:58.800 --> 0:17:02.200 I mean it goes back to pattern matching and pattern 0:17:02.280 --> 0:17:05.200 recognition number one, and then being nimble. I think those 0:17:05.200 --> 0:17:10.399 are two unique attributes to community oriented banks and and 0:17:11.080 --> 0:17:15.800 MDIs as well. They're more agile, they're able to move faster, 0:17:16.400 --> 0:17:19.480 and then you know, they have a different quote unquote 0:17:19.560 --> 0:17:23.600 risk box than many of the larger banks. They're able 0:17:23.640 --> 0:17:29.520 to really understand the nuances behind why certain local businesses 0:17:29.600 --> 0:17:32.280 may succeed in certain areas and why they may not. 0:17:32.760 --> 0:17:35.119 And as a result, they're able to help propel and 0:17:35.200 --> 0:17:38.439 prop up many local businesses that would not get the 0:17:38.480 --> 0:17:42.280 time of day from larger banks. And so, you know, 0:17:42.359 --> 0:17:46.159 for me personally, I was turned down by more than 0:17:46.200 --> 0:17:50.679 ten banks, you know, to finance the acquisition of an 0:17:50.680 --> 0:17:55.280 apartment complex in the Atlanta metro area. I had incredible 0:17:55.320 --> 0:17:58.720 credit behind me. I had multiple ultra high net worth 0:17:58.760 --> 0:18:02.480 investors were willing to behind the guarantee. But when I 0:18:02.520 --> 0:18:04.680 spoke to some of the larger banks and they saw 0:18:04.720 --> 0:18:10.080 that I was, you know, relatively young African American and 0:18:11.640 --> 0:18:15.000 you know, relatively new in my career, I was shut 0:18:15.040 --> 0:18:17.240 down for even had a chance to start to get along. 0:18:17.480 --> 0:18:20.080 No One Bank, Citizens Trust Bank, who we actually work 0:18:20.160 --> 0:18:23.480 with now today. Black Owned Bank started in the nineteen 0:18:23.520 --> 0:18:27.720 twenties that focuses and serves Atlanta and other markets in 0:18:28.000 --> 0:18:31.520 the Southeast. You know, they saw something different. They knew 0:18:31.960 --> 0:18:35.200 you know, the region, the area that I was investing in. 0:18:35.600 --> 0:18:38.119 They knew that there weren't a lot of people who 0:18:38.200 --> 0:18:40.960 looked like me, who were buying apartment buildings in that area, 0:18:41.440 --> 0:18:45.000 and they understood my business plan and that you know what, 0:18:45.080 --> 0:18:48.000 We're going to give this young man the benefit of 0:18:48.000 --> 0:18:49.919 the doubt. We're going to lend to him, We're going 0:18:50.000 --> 0:18:52.480 to think about building a long term relationship with him. 0:18:52.800 --> 0:18:55.119 We think that the way that he's investing in the 0:18:55.119 --> 0:18:58.600 community will actually not just elevate his investors, but actually 0:18:58.600 --> 0:18:59.600 the community itself. 0:19:00.080 --> 0:19:01.560 And you know, we're going to. 0:19:01.480 --> 0:19:05.560 Look at the opportunities versus the risks and lint as 0:19:05.560 --> 0:19:07.080 a result. And if it weren't for that bank, I 0:19:07.119 --> 0:19:09.560 probably would not be where I am today, you know, 0:19:09.640 --> 0:19:14.520 the founder and CEO of Cadre, because that acquisition ultimately 0:19:14.600 --> 0:19:18.159 ended up in generating significant returns for my investors, and 0:19:18.280 --> 0:19:20.280 that put me on the path to saying, Okay, how 0:19:20.280 --> 0:19:23.760 can I democratize access to this kind of institutional real 0:19:23.880 --> 0:19:27.399 estate today because it created a track record for me. 0:19:27.600 --> 0:19:30.720 Our thanks to Ryan Williams, founder and CEO of Cadre, 0:19:30.960 --> 0:19:34.000 for joining us on today's program. You're listening to a 0:19:34.040 --> 0:19:38.720 Bloomberg Radio special, Black America Confronts a Credit Crunch. I'm 0:19:38.760 --> 0:19:42.280 Shanali Basik. Today we're looking at how black communities are 0:19:42.320 --> 0:19:45.840 faring as economic uncertainty is leading banks to pull back 0:19:45.920 --> 0:19:49.560 on lending. It's a situation that often has an outsized 0:19:49.600 --> 0:19:53.080 impact on Black Americans. Asahi POMPEII is one of the 0:19:53.080 --> 0:19:56.040 most senior black women on Wall Street. She's on the 0:19:56.080 --> 0:19:59.639 management committee at Goldman Sachs and as head of Corporate Engagement. 0:20:00.200 --> 0:20:03.920 She's also president of the Goldman Sachs Foundation. She leads 0:20:03.920 --> 0:20:07.800 initiatives like ten Thousand Small Businesses, which supports smaller business 0:20:07.840 --> 0:20:12.080 owners through education, finding fresh capital, and more. She also 0:20:12.160 --> 0:20:15.600 helped Goldman launch one Million Black Women in twenty twenty one, 0:20:15.920 --> 0:20:19.080 an initiative that pledges ten billion dollars in investments and 0:20:19.080 --> 0:20:22.600 one hundred million dollars in philanthropic funds to address racial 0:20:22.600 --> 0:20:27.120 and gender bias across businesses. Black executives from across the country, 0:20:27.160 --> 0:20:32.240 including Walgrand CEO, Rosalind Brewer, and political powerhouses Valerie Jarrett 0:20:32.240 --> 0:20:36.000 and Counduiz of Rice, are among the program's advisors. I 0:20:36.040 --> 0:20:37.640 was wondering if you could start just kind of big 0:20:37.680 --> 0:20:40.679 picture when you think about June teenth, you know, how 0:20:40.680 --> 0:20:43.399 do you think about it from your stands at Goldman 0:20:43.520 --> 0:20:46.840 Sachs and how do you talk to your colleagues about it. 0:20:48.320 --> 0:20:51.399 You know, if we think about June Team, we really, 0:20:51.920 --> 0:20:55.280 you know, think about how Black Americans are faring in 0:20:55.359 --> 0:20:59.480 this country overall, from an economic perspective, what's happening on 0:20:59.560 --> 0:21:02.800 the social front, and in particular, because we're an investment 0:21:02.840 --> 0:21:05.960 bank for us, the focus is really on black small 0:21:06.000 --> 0:21:09.400 businesses and how they're faring. I would describe this June 0:21:09.440 --> 0:21:12.880 teint as a really jittery June teint for black small 0:21:12.920 --> 0:21:15.639 businesses and small businesses of color. And that's as a 0:21:15.680 --> 0:21:18.240 result of a number of factors that I am happy 0:21:18.240 --> 0:21:18.800 to go into. 0:21:19.040 --> 0:21:21.840 Yeah, let's get into that a little more deeply here. Obviously, 0:21:21.840 --> 0:21:24.199 there are worries about a recession, but there's also worries 0:21:24.240 --> 0:21:27.160 about what a credit crunch might be given so many 0:21:27.200 --> 0:21:31.399 smaller banks have started to face so many troubles. What 0:21:31.720 --> 0:21:33.680 are the biggest concerns you're seeing? 0:21:35.560 --> 0:21:38.080 You know, we're seeing a number of sinctionally. You know, 0:21:38.160 --> 0:21:41.840 on a good day, it's challenging for black businesses to 0:21:41.920 --> 0:21:45.520 get funding, and this year that gets amplified, and so 0:21:45.880 --> 0:21:49.320 they are really worried about the credit crunch. It's frustrating 0:21:49.840 --> 0:21:53.439 their ability to be able to access access capital and 0:21:53.480 --> 0:21:57.480 it's a very uncertain time for small business of color, 0:21:57.480 --> 0:22:01.560 and in particular black small businesses since the done of 0:22:01.600 --> 0:22:05.359 the pandemic. The last three years, Golden Taxes conducted over 0:22:05.560 --> 0:22:09.800 seventeen surveys of small businesses to really keep a pulse 0:22:09.880 --> 0:22:13.480 on what's happening. And here's what we're seeing. Dial back 0:22:13.560 --> 0:22:16.640 a year ago, when we surveyed small businesses and said, 0:22:16.680 --> 0:22:19.600 how do you feel about the economy more generally and 0:22:19.640 --> 0:22:23.479 in particular your ability to access capital, We found that 0:22:23.520 --> 0:22:26.640 seventy seven percent of them were confident in their ability 0:22:26.640 --> 0:22:32.040 to access capital. Today, seventy seven percent of those businesses 0:22:32.320 --> 0:22:35.280 are now concerned about their ability to access capital. So 0:22:35.320 --> 0:22:38.720 they went from confident twelve months ago to concern right now. 0:22:39.080 --> 0:22:42.560 And that's really manifested in terms of what they're experiencing. 0:22:42.920 --> 0:22:47.760 They're experiencing a higher loan rejection, They're being asked for 0:22:47.880 --> 0:22:51.760 more data than they were ever asked for before, more 0:22:51.800 --> 0:22:56.760 scrutiny on their projection. Things are taking longer prolonged barring 0:22:57.800 --> 0:23:00.719 approvals for their borrowing things that would take three months 0:23:01.200 --> 0:23:03.960 now taking upwards of seven months to get approved. 0:23:04.640 --> 0:23:07.360 So how much of this is because of the strains 0:23:07.400 --> 0:23:10.040