Black Banks Matter with the National Black Bank Foundation

Featuring Brandon Comer and Ashley Bell, Founders of National Black Bank Foundation

I'm English Sall. Welcome to System Catalyst, the podcast that cracks the code for making the world a better place.

When we talk about all the ways we can make a positive impact in the world, here's one you don't often hear: banking. Banks play a huge role in many systems. So, the banks we choose to work with, as individuals, as organizations, can have a big impact. So how can we make a positive impact with our banking?

Well, you could start with investing in Black owned banks. In the past 50 years, the number of Black banks in the U. S. has been cut in half, deeply hurting communities of color across the country. The cause? Unsurprisingly, is a long history of institutionalized racism and segregation. But now, the tides are turning thanks to Ashley Bell and Brandon Comer, founders of the National Black Bank Foundation, or NBBF. They are building a whole new network to help Black banks thrive. As many of you know, undoing decades of damage and building a brand new network isn't easy. especially when you're competing with the biggest financial institutions in the world.

In our conversation, I've asked them how they're doing it and what they've learned along the way. If you're also trying to uproot a system by gaining new allies and partners, you'll love this episode.

So I've read just a lot about you guys and, and about the work that you're doing with NBBF. And I'd love to know first, Like, how did you guys meet? 

[00:02:00] Brandon: Ashley, I'll let you take that one. 

[00:02:02] Ashley: I don't know about that. You know, I'll Brandon and I have known each other for 20 years now. 

[00:02:12] English: Wow. 

[00:02:13] Ashley: Which is crazy when I think about it. But yeah, so we met at the very beginning of our professional career. So I was still in law school at the University of Georgia. He was, what were you doing? 

[00:02:28] Brandon: I just started investment banking.

[00:02:29] Ashley: That's right. He had just started investment banking and was spending a summer in Atlanta. And through a mutual friend, he was a very close friend of ours. He came to support my political race. I was running for office while I was in law school. So he came to my events. And brought me a check. So that's a good way to make friends.

[00:02:52] English: That is a good way to make friends. That's awesome. Ashley, what were you running for? 

[00:02:57] Ashley: I was in law school, and I was running for the state assembly. My third year of law school. So I was in law school running in Georgia, suburb of Atlanta where I'm from, and I was hosting a fundraiser in Atlanta. In downtown Atlanta.

And it was just, you know, I was young, so I just had a bunch of friends that didn't have real jobs, and he was one of the only ones that had a real job. So he brought me my biggest check. So, it stood out. 

[00:03:24] English: That's so cool. So then where, how did you guys align and kind of come on to this idea of, you know, creating and working NBBF together?

[00:03:36] Ashley: You know, I started off as, you know, practicing law and Brandon was in investment banking. Yeah, I think over just over the years. We both kind of cross-pollinated in our respective spheres of influence. Brandon was in finance. I was more in the government policy stuff, and somewhere in the middle, you find public finance.

So that's what those two things marry. And we started doing public finance together. And I say that because that, that's how we, you know, in those circles of how we became friends with Rodel scholar, a Fellow, Tashara Jones, who's now the chair of NBBF. So we met her, let's say, 15 years ago because she was a young elected official in the state assembly in St. Louis. And so we've all kind of been in that space of trying to figure out how finance can be impactful for like 15 years. And then, so the rest of the people on the board, we just kind of collected along the last couple of decades. And then I think that after George Floyd, you just saw a moment You kind of realize that if there was going to be systemic change, it was going to happen.

We're old enough. We're seasoned enough that we're going to have to be a part of a solution. And that collection of friends that also happened to be many of the Aspen Fellows became the nexus for what became NBBF. 

[00:04:56] Brandon: Yeah. We, over the course of those years, had other collaborative projects because when you're working with like minded people who really want to have an impact. You know, there was some other projects that we began to work together on and just sort of build, you know, deepen relationship and thoughtfulness.

And so, you know, as Ashley mentioned, post George Floyd's murder, we sort of looked at all of the different pieces. You know, and the representation we had amongst our circle and within the ecosystem and just thought, how can we be optimally impactful with this moment in time? And you can't have a serious discussion about closing the racial wealth gap without talking about Black banks, Black financial institutions.

So those institutions that are most proximate to the communities that you want to impact. 

[00:05:43] English: Absolutely. So it feels like there's a lot of like this sort of groundswell, both with the moment in time, the relationships that you all had obviously with each other, and then kind of the community at large, and then just really identifying a pretty dire need and gap that you could sort of bring these people together and create NBBF. And I see on the NBBF website, it says by 1976, there were more than 50 Black owned banks across the United States. And today there are just 18 of these vital community anchors left. So why, why was this decline? Why did this, why did this happen? 

[00:06:29] Brandon: I mean, to make it even more jaw-dropping, there used to be over 130 Black-owned banks in the country if you go back a little further. 

[00:06:37] English: Yeah. 

[00:06:37] Brandon: And unlike in most sectors of banking, if you see consolidation or you see the numbers shrinking due to, you know, merges and acquisition activity, that's not the case in the Black banking sector. Every time there's an economic downturn, you know, we lose 25 percent of the existing banks. It's unfortunate, but these banks are the most susceptible, to borrow one of Ashley's phrases. You know, when we have a high concentration of people that are the last to be hired and the first to be fired, then you're much more susceptible and you don't have that diversity of customer base. You don't have that diversity within your portfolio to weather those financial turns. And so we lose a quarter of the banks every time there's a significant financial downturn. 

[00:07:25] Ashley: And I think just to be more poignant on that, you know, 1976 was the year that my own family's bank, which was Black-owned closed down. So we were a part of a third of the Black banks that ended at that point because then America was going into a recession.

It was the early part of Carter years. People were using coupons to get gas after the Vietnam war, we were in a bad spot economically. And so every time as Brandon said, you saw economic downturn, you saw this, the hardest hit communities and the institutions that hold their money. You saw them go down, you know, Black bank struggle because Black people struggle, right?

So, they're one in the same for every stat that you see about Black people. Generally, the banks are just some reflection of that. You can talk to most Black bank presidents and they can pretty much tell you when Black unemployment hits a certain percentage when they're in trouble, right?

So Black unemployment has always been at least twice that of non-Black Americans. And so when you have these economics, and you have communities that are banking deserts, healthcare deserts, opportunity deserts if you were in many times, then the banks are going to be susceptible to not only the economic shifts but also regulatory.

Um, you know, regulators will see these portfolios of loans as much more risky because they're owned by Black people. Their barbershop, funeral, all these things that may have loans with the Black bank or you is riskier because they're in Black communities. And so because of that, they have to hold more cash because of that, they get more pressure from regulators.

And so many times there's been institutional racism over the years that has put just unparalleled pressure on Black banks that you don't see other banks have. So what NBBF has been trying to do, and I'll set it up for Brandon on this is to give them access to opportunities that are outside of the former red line.

For those that don't know redlining are the communities where basically banks do a red line around your community and said, you can't lend, we will not lend to people in those areas, right? 

[00:09:32] English: Mm-Hmm.

[00:09:32] Ashley: And if you don't lend in those areas that you had that may have owned a home, but the home was depreciated when people on the other side of the redline was appreciated. And so you can't build the American dream off of depreciating asset. And so those red lines are historical markers for the Black banks have had to figure out how to survive and it's harder behind those red lines. And so what we've been trying to do, and Brandon can talk about this, is how do you take a bank that is trapped in those circumstances and give them opportunities that won't limit them to just what's inside the red line.

[00:10:04] Brandon: Yeah, exactly. And that resulted in less access to both capital and opportunity, right? And so when you think about access to opportunity, because these banks have been underfunded for such a long period of time and because their mission, you know, mission-driven institutions, meaning they want to do business right there in the communities that they're, that they're physically in and that they serve, they end up with this heavy concentration of, you know, church loans, you know, as Ashley mentioned, barber shops and some other small business loans.

But in reality, like any other financial institution, they really need diversification. But how do you compete? How do you compete for those larger loans? How do you compete for those middle market businesses when because of your size, you know, maybe the largest loan you can do is 2 million when in fact this business needs a 20 million bond.

So how are you, how are you even able to be competitive? And so when we took a step back and said, what are the pain points that these banks are feeling? We look at all of the announcements that have been made by large corporations post George Floyd on how they want to be impactful. How do we bridge those two things?

How do we help corporations understand how to actually be impactful, not to just check a box, but to actually do something? That's going to actually benefit the community that they say they want to serve. And then how do we work with the banks who are already limited in resources, you know, who don't necessarily have the bandwidth to take on a lot of new initiatives and stand up an intermediary that will be able to, you know, to service both that corporate potential client as well as the banks themselves.

All local enterprises need a network of support to survive and thrive. But in the case of local Black banks, the history of redlining resulted in a network of oppression. So NBBF started weaving together a brand new network of support, starting with Atlanta's basketball team, the Hawks. 

[00:12:13] Ashley: You got to start with who, who is most likely to care, right? And so from our perspective, Those industries that make tremendous profits off of the talents and efforts of Black and Brown people should be the first to be called to the table to partner. It was in Martin Luther King's final speech when he actually called for a banking in movement that is reflective of this effort. So what more industry makes more money off of Black and Brown bodies and talent than sports. 

[00:12:43] Brandon: Are, sort of, first proof of concept when it comes to access to opportunity was actually with the Atlanta Hawks, and they allowed us to put together a syndicate of 10 Black banks to finance their practice facility, making it the first professional sports facility in America financed by all Black capital, you know, for entities of this size.

And for us to say, well, individually, a bank may be too small to handle the needs of a team or of a league. We've mitigated that by pulling this consortium together and saying, we'll pull them together and act as one single institution, right? But what's also important is having a proof of concepts. And then from there, obviously, we saw Major League Soccer come on as the first league to do a credit facility with our Black financial institutions.

And they worked to really appreciate what is it that we can do in a transaction that's going to be optimally impactful for the banks? And that's one thing I really want to stress, which is during that time, a lot of people were looking for ways to easily check a box. And NBBF did not want to be a part of, you know, some sort of immediate validation stamp for minimal effort.

You know, we said we want to actually present strategies and opportunities that will add value to you as an organization, but also add value to the banks and the communities that they serve. And we were ultimately, you know, successfully able to do that with major league soccer, you then saw subsequent transaction with, you know, NFL and, you know, hotel with Milwaukee Bucks and so, so on and so forth.

And so you start to see a lot of momentum and the other really positive impact is the headline exposure that sports has. So now you're raising awareness for these Black banks. Because if, you know, if I'm in Milwaukee and I see that this small savings alone just participated on a deal with the Milwaukee Bucks, that's an instant validator.

And so it's not lost on us that once we close that deal, they started seeing inbound traffic just from a community knowing that they're there and also having that validation that they're an institution, you know, that can handle that type of business and therefore they should have an opportunity to win over other business as well.

[00:15:02] English: That's amazing. Tell me a little bit about the specifics of NBBF's role. Is it, what I'm hearing is that it's a, it's a convener. Is it also a capital provider? Is it also a communicator? Like how does NBBF steward kind of these interactions with getting these deals closed? 

[00:15:20] Ashley: So NBBF is a 501c3 charitable organization.

We operate as technical assistance for both the Black banks and as well as large corporations. Because the reality is not only is there a gap of, um, let's just say a billion dollar corporation and a hundred million dollar bank. There's a gap as far as like those worlds ever meeting. But there's also a cultural gap, you know, we have to explain to the banks how to work with a billion-dollar corporation. You know, Brandon does a really good job explaining them. How do I underwrite an NBA team because there aren't any NBA teams walking through Black banks saying give me a loan every day, right? So these are a whole new concept for these folks. So you're bringing something to them that they've never had a chance to do on both sides. And so we build that bridge of technical assistance to help both sides understand how to communicate with each other, how to set realistic expectations, and how to take a deal from beginning to end in a way that gives both sides, uh, a deliverable product that's beneficial for both.

It's about relationships at the end of the day, you know, you can't do it just off of theory. You got to build relationships and those relationships are not easy to come by. And I would like to think that when we look at the moment in time, that was the summer of 2020, which was a very unique time that called the consciousness of America to the forefront, that even though as we stand here in 2024, you see a lot of the fervor to create a more just world has died down.

Our goal is to strengthen the institution so that, while America's attention may no longer be on the topic, that the institutions that are created from that momentum can still do the work. And that's why this is important. And so it was during those marches of 2020, which is a rare opportunity for me to be marching with my son, and then to also be marching with the CFO of the Atlanta Hawks. Now, there's probably not another opportunity that him and I will be marching anywhere together. But something really wild and happened, like a murder of an innocent man live on Instagram and on social media, and he's called the conscience out of his C suite of a billion-dollar corporation to the streets of Atlanta with his children to talk about the future of a nation he loves along with other people who care just as much. Right? So it is in those moments and those steps and those conversations where you're trying to figure out where do you sit? And this particular bend of the arc of history. Like, what part of it are you when you look back and you try to see when we bent this arc a little bit further towards justice, as King would say, were you a part of the bending or you were part of the restricting? And when you have moments like that to compel you to go to the street, you realize that inaction is in itself action. By doing nothing, you're actually maintaining a status quo that has gotten us where we are. And so our call to action has been to C suites and CFOs from that deal forward. That if you truly believe that you can make a positive impact, if you want to do that, then you can do what you do every day, but just do it with different people and be willing to learn how others outside of your network operate and how they can help you be impactful with the job that you do every day.

There's a great lesson here. To build a network from scratch, find the players, pun intended, that will require the least work and have the biggest impact, not just financially, but culturally. But dealing with so many stakeholders, especially big ones, requires patience and strategy.

[00:18:38] English: Where do you feel like you get your biggest kind of like pushback from? Where's the hardest kind of hill to climb with these different stakeholders that you, that you interact with? 

[00:19:10] Ashley: No, I think for me, the hardest is the politics. The politics of big banks, because at the end of the day, every big corporation has been banking with a big bank always, right? So whatever they've been doing, and this is a challenge that we all have, right? If you tell yourself, we're going to try to do something different with new people. First thing you got to do is figure out who are these new people, whatever it is you're going to do. And once you realize that you want to do something new with them, the question is your old friends, what happens to them? Like the people you used to do things with it? So we've had to build relationships with the bigger banks that have done these deals and help them understand how we're bringing value and why this is good for their clients. And, you know, really try to tap into the DNA of that bank saying, well, hopefully they do have some objectives about supporting community initiatives and maybe what we're doing falls in line there. But it's tough sometimes when you deal with banks that haven't thought this through, it forces them to internally think like, okay, well, I know I paid 10 million to have our sign in this arena because we have our name on this arena with this team plays. But this bank that we don't know and never heard of wants to come in and do work. So it's tricky sometimes, but most of the time, the vast majority of the time we'll get to yes. Uh, it's just as harder depending on the circumstance. 

[00:20:45] Brandon: We actually had the same answer on that one, you know. But I will say that what we've also learned is while there is a lot of potentially a lot of support at the top of certain financial institutions who they immediately get it. So when we're talking to the CEOs of the larger banks or, you know, the C suite and those just under, those conversations go a lot, have traditionally gone a lot easier. When you get down to the execution folks, when you look at how they're incentivized and you know, if, if they were going to do a 200 million deal, now they're just doing 100 because some other financial institutions are coming in. Now all of a sudden, the incentives aren't necessarily in alignment. And so that's, that's another part of the conversation that we're having. So when we talk about changing systems, you know, we're not running away from any opportunity to change the way in which all of these organizations and this ecosystem interacts. So when we run across those things, you know, we definitely want to talk with the senior management, the big banks and say, hey you signed off on this, but here's some friction points that we've kind of experienced, and here's how we can potentially, you know, overcome that going forward. So there's a lot of, of learning that's happening, I would say, amongst all of the parties and amongst all of the stakeholders, and that's where we really try to take advantage of, which is to seize those moments, be authentic. Because we're not the banks, we can be that independent voice, you know, to help speak on their behalf in those rooms. 

[00:22:16] English: Have you found that there's connective tissue that you take through, kind of, each deal or each interaction or project? Is there any sort of like connected lessons learned or does it feel like an individualized kind of approach each time?

[00:22:30] Ashley: You know, I would like to think that every opportunity you kind of got to take fresh eyes with. You definitely want to use your previous experience to get you to credibility with the new entity that let them know that you've done this before, but there's always a new angle into how you can strengthen a relationship, make it go deeper and value to organization. So, you gotta be curious, you gotta learn about who the potential partner is and gain enough information that you can really figure out where you can add the most value. 

[00:23:01] Brandon: And I think that approach is what's allowed us to get across the finish line with different types of organizations, because we're not coming in being prescriptive. You know, we're not coming in with some type of a cookie cutter approach. But we really are saying, you know, give us an opportunity to peek under the hood, really understand you as an organization and then let us come back, you know, and give you some suggestions or recommendations on ways in which you can partner with the Black banks that will add value to you as an organization and to the banks as well. And so that, that is our approach with, with every entity that we engage with. 

[00:23:40] English: So paint that future vision for me. How do you guys know, how do you know when you've succeeded? How do you know that you're doing what you say you're doing? Is there a metric you look at? How do you know that kind of that, that future is on the horizon and what does that look like?

[00:23:53] Brandon: Yeah, a few things. One, as you talked about that, that spirit of collaboration, you know, as we started to see the banks working together on more of these transactions, And then look to see them working more collaboratively. In other respects, that's a muscle that we're helping. You know, we're happy we've really begun to exercise.

The other metric is we're starting to see an increase in the number of Black owned banks. So, you know, since we've started this, the NBBF, two Black banks have come online. And then, you know, Ashley, and, you know, Dr. King and a team of us are also bringing another one online. So you now see Redemption Bank.

So you're starting to see growth in the sector. And, you know, for me, when you look at the fact that collective assets in the Black banking sector is under 15 billion dollars, a metric, but what I would say would be success is for, you know, for us to have over 100 billion in total assets among Black banks. And what's interesting is even when that number is reached, as of today's numbers, that would only be the number 30 bank in the country.

So even once the Black banks have grown almost 10 times collectively, they would still, you know, only rank as number 30 amongst individual institutions based on today's dollars. So there's a lot of room for growth. And then the other thing is I would like to see larger, healthier. Black banks and not just, you know, within a particular community. But banking is an area where, you know, volume helps. And so I would like to see the banks grow larger and stronger and just not a number of institutions as well 

[00:25:42] English: On the funder philanthropist part, I'd really love to know any, anything that you guys can think of that you sort of wish the funders would know. Wish people like me who are philanthropists who who are maybe not as aware as we should be around some of these issues and some of the hurdles that that you all are facing and some of the hurdles that the Black Banks are facing. What do you wish that we knew? 

[00:26:05] Ashley: Yeah. 

[00:26:06] English: And then the second kind of counterpart to that is what do you wish the system catalyst knew? People who are who are in your shoes, who are who are trying and and sometimes running into the barriers and difficult things that you guys are running into? And what do you what do you want them to know? 

[00:26:22] Ashley: I think that if you especially consider yourself an impact investor or impact philanthropist, or you have a nonprofit focus on impact, then you absolutely need to ask yourself the question: am I banking in the most impactful way? And the question there is, am I holding the resources that I want to deploy for impact? Could it also be making impact while I'm doing nothing; while I'm sleeping at night? Could that money be sitting in a bank that's actually giving all along to people for the first time to create first time entrepreneurs with SBA loan that is giving people a chance and don't have a chance otherwise? You could be doing that in your sleep.

Now, if you haven't had that question in your organization, now's the time to have it. And then as you have that conversation, you now realize why NBBF is important, because now you have an ally and a foundation that not only can help you figure out the best way to do that, but also, as you say, wow, we're about to go build a new training facility for whatever we're doing. Our new headquarters and we got to go get that.

Then maybe I need to figure out how I work with Black banks to do that because it's not going to cost me any more money and it's going to be more impacted. NBBF is building a bridge that nobody is building. There's a much-needed iron-clad bridge that needs to be built between Martin Luther King Jr. Drive and Wall Street. Until that bridge is built and until resources can flow freely between the two and overcome all the historical impediments that have been placed along that bridge. Until we clear the way, then we won't be able to see not only the vision that Brandon talked about having 100 billion in assets, but just a more equitable world where capitalism that we know works actually will work for everybody and not a select few.

[00:28:13] English: That's it for today's show. Please don't forget to subscribe to System Catalyst so you don't miss out on a new episode. Also do us a huge favor by rating our podcast and leaving us a review. Thank you all so much for joining us and we'll catch you all in the next episode. Before we go, we'd like to thank our producers at Hueman Group Media. We'd also like to thank our incredible network of partners who are supporting our mission: the Skoll Foundation, the Aspen Institute's Global Leadership Network, Echoing Green, DRK Foundation, Maverick Collective, Virgin Unite, Charlize Theron Africa Outreach Project, Boldly Go Philanthropy, Synergos, Forward Global, Nexus, and New Profit.

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