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Radical imagination in banking and our economic system

Officially one year into the COVID-19 pandemic and erratic state-by-state lockdowns, we continue to question what a “new normal” will look like for our country. We know that a return to old ways of doing business isn’t viable for the health of our planet and communities and that we have a responsibility to radically reimagine how we do business. 

photo of Caitlin Duffy

First Vice President
Commercial Banking
Washington, D.C.

202-721-0775

The inadequacies of our nation’s policies, institutions, and systems have been glaringly amplified by the public health crisis and ensuing economic recession. Among many failings, the prioritization of the economy over public health has cost us the lives of more than 500,000 neighbors and loved ones. Women are leaving the workforce at higher rates than men, with their workplace participation at its lowest since 1988.1 Data suggests that nearly a third of small businesses will close for good this year,2 and that more than one third of nonprofits will cease operations in the next 2 years.3 Amidst so much loss, working class communities and people of the global majority – including Asian, Black, Indigenous, and Latino communities – have born devastatingly disproportionate impacts.4 

To move towards a new normal with a more sustainable and just economy, it’s important to investigate why our system continues to reproduce inequities, particularly across race.  

Examining the extractive roots of capitalism 

We can trace economic exclusion and racial wealth gaps across generations, rooted in the land dispossession and genocide of Indigenous peoples, and the slave labor of African peoples. Many early banks and insurance companies established by European settlers thrived due to the financing, transportation, and insurance of enslaved peoples and products reliant on slave labor, such as cotton. Wall Street, a historic hub for our economic system, was first established by colonists as an official trading post of enslaved peoples.

While financial systems have evolved over time, they have continued to advantage whiteness. For decades, redlining assigned lower economic value to Black and Brown neighborhoods and higher value to white neighborhoods for bank lending and other business decisions.6 More recently, national data from the SBA’s first wave of the Paycheck Protection Program shows that smaller, Black-owned businesses struggled to access funds7 while most resources went to larger, white-owned companies.8 

Understanding the origins of the U.S. economy can help us address harm while also nurturing new systems where everyone can thrive. 

How to construct a racially just economy in the “new normal” 

To repair the harm of racial capitalism,9 strengthen democracy, and spread the gains of our economy, we must take a systemic approach. Grassroots groups working at the frontlines of our most impacted, marginalized communities offer the imagination and leadership that we need.  

A People’s Orientation to a Regenerative Economy,” a product of the wisdom of more than 60 frontline and allied organizations from across the country10, provides one powerful framework for policy development and organizing to protect, repair, invest, and transform our communities and the economy. 

They define a Regenerative Economy as one that prioritizes community governance and ownership of work and resources, which requires re-localization and democratization of how we produce and consume goods. It ensures that all communities can fully shape democracy and the decisions that impact them, with full access to healthy food, renewable energy, clean air and water, good jobs, and healthy living environments. 

Among the goals for finance offered by “A People’s Orientation” to achieve a Regenerative Economy: 

  • Eliminate regressive financing and subsidization of corporate control of energy and food systems 
  • Enact progressive taxation, including a wealth tax on wealthy individuals and corporations, to repair and rebuild communities 

  • Eliminate subsidies and tax breaks to the fossil fuel industry 

  • Provide non-extractive financing for cooperatively owned enterprises that meet community needs, such as community solar and regional food systems 

As a bank founded by a union of garment workers who sought to leverage existing capital structures for change, Amalgamated Bank knows that profit can too often come from exploitation and extraction. Therefore, the Bank has spent the last 98 years fighting these conditions to build a more just and sustainable world. 

Today Amalgamated is the largest B Corporation bank and first B Corporation bank holding company in the United States and is committed to transforming financial and economic systems to center people, planet, and prosperity. We recently became the first major U.S. bank to endorse HR 40, which calls upon the Federal Government to form a Commission to explore reparations for African Americans. We urge other banks to join us. 

It is our belief that the “new normal” is an unmissable opportunity to reimagine and shift an economy that was founded upon racial categorizations from its inception, and as a result continues to produce unjust racialized outcomes. Financial leaders must take proactive steps to right the wrongs of the past and pave the way for banking that furthers economic, environmental, and racial justice. 

 


“COVID-19 has driven millions of women out of the workforce. Here’s how to help them come back,” Fortune, 13 February 2021, https://fortune.com/2021/02/13/covid-19-women-workforce-unemployment-gender-gap-recovery/  

2 “9 million U.S. small businesses fear they won't survive pandemic, CBS News, 10 February 2021, https://www.cbsnews.com/news/small-business-federal-aid-pandemic/

3 “Pandemic puts 1 in 3 nonprofits in financial jeopardy,” AP, 3 March 2021, https://apnews.com/article/coronavirus-puts-1-in-3-nonprofits-financial-jeopardy-93d410c99425f0ac54b3190a656db200

COVID Racial Data Tracker, COVID Tracking Project and Boston University Center for Antiracist Research, https://covidtracking.com/race

The work and teachings of Take On Wall Street and members such as the Action Center on Race and the Economy (ACRE) informed this analysis.

Two excellent resources on this history are The Color of Law: A Forgotten History of How Our Government Segregated America by Richard Rothstein and The Color of Money: Black Banks and the Racial Wealth Gap by Mehrsa Baradaran.

7 “The Paycheck Protection Program failed many Black-owned businesses,” Vox, 5 October 2020, https://www.vox.com/2020/10/5/21427881/paycheck-protection-program-black-owned-businesses

8 “Minority-owned businesses were last in line to receive loans, latest PPP data show,” CBS News, 4 January 2021, https://www.cbsnews.com/news/minority-owned-businesses-were-last-to-receive-ppp-loans-adding-to-their-despair/

9 “Racial Capitalism, Power & Resistance: Dr. Barbara Ransby,” Neighborhood Funders Group, October 2019, https://www.youtube.com/watch?v=lGOzzqakPJ0

10 The “People’s Orientation to a Regenerative Economy” was adapted from the collective work of the United Frontline Table, which includes Amalgamated Bank clients Center for Economic Democracy, Grassroots Global Justice, It Takes Roots, and Right To The City.

Things we care about

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impact investing

Demand for ESG investment strategies and products continues to see rapid growth. As we expand our ESG offerings, we are growing the team to lead this important work. We believe that sound Environmental, Social, and Governance (ESG) competencies will no longer be a trademark of industry distinction but a required commitment to better business practices. 

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racial justice

Today, Amalgamated Bank announced its endorsement of HR 40, which is calling upon the Federal Government to form a Commission to explore reparations for African Americans. As of now, we are the first major U.S. bank to endorse HR 40, but are hopeful we are not the last.

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women's rights

Today, on International Women’s Day (March 8, 2021), we honor the centuries-long plight of women around the world, from women’s suffrage to #MeToo, and everything in between. The theme for this year’s women’s day is #ChooseToChallenge, based on the premise that from challenge comes change. We can all choose to challenge and call out gender bias and inequalities. We can also choose to seek out and celebrate women’s achievements. At Amalgamated Bank, we always choose to challenge social inequalities and injustices.