The news: Federal Reserve Vice Chair Michael Barr vowed to eliminate racial discrimination in banking in a speech this week at Jackson State University in Mississippi.
What will the Fed do? Barr highlighted some of the key areas on which the Fed will focus, including Black-owned small business lending, minority auto lending, minority mortgage lending, and access to banking services for the underserved and unbanked.
Why hasn’t it already happened? Much of the onus for eliminating financial inequality and racial discrimination has been placed on banks, rather than on regulators.
While banks generally aren’t intentionally facilitating racial discrimination in their practices, regulators have provided little to no support to guide banks in the right direction. And in this time of economic uncertainty, banks are focusing on cutting costs, not hiring mystery shoppers.
Will it be successful? The Fed will need to prove that it’s not all talk if it truly aims to eliminate racial discrimination within the financial system.
This article originally appeared in Insider Intelligence’s Banking Innovation Briefing—a daily recap of top stories reshaping the banking industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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