Building our personal, economic, and political power by getting educated and organized, that’s what we’re all about at BlackHer!
This week we were thrilled to catch up with Nikitra Bailey, an executive vice president at the Center for Responsible Lending.
Me: Nikitra, it is so nice to finally meet via phone. Frankly, I’m surprised we haven’t met before. We travel in the same circles and both care a lot about economic justice and wealth-building for Black women.
Nikitra: It’s good to meet you too!
Me: Please tell us about your work at the Center for Responsible Lending.
Nikitra: I’m an executive vice president at the Center for Responsible Lending (CRL), a nonprofit, research and policy advocacy organization that works to eliminate predatory lending practices. CRL is affiliated with Self-Help, one of the nation’s largest community development financial institutions. Self-Help provides financial services to families and communities underserved by traditional banking institutions. At CRL, I co-manage organizational operations and lead advocacy efforts to ensure access to mortgage credit for people of color and other low-wealth families. I also direct constituency relations and coalition-building activities. We work with a broad and diverse network of stakeholders dedicated to advancing financial fairness.
Me: Why is that important?
Nikitra: Access to safe financial products and practices is essential for building wealth and maintaining a stable middle class. Unfortunately, in 2018, we still have a two-tiered financial services system. In this system, consumers who are mostly wealthy and white have access to affordable mainstream banking services. On the other hand, Blacks and other people of color, are mostly served by financial institutions that drain our resources through debt trap practices like payday lending. These institutions rob hardworking families of the opportunity to build savings and wealth.
Me: That’s an important statement.
Nikitra: Yes. The financial services providers in so many of our communities are actually thwarting instead of enabling our ability to build wealth. And, even some traditional banks, operate under the dangerous belief that race equates with risk. It is discriminatory to assume that Blacks and other people of color are riskier borrowers when, in many cases, research shows that we are no riskier than others. This discrimination results in people of color paying higher (and unjustified) costs.
Me: That is very troubling.
Nikitra: Yes. For example, recent testing by the National Fair Housing Alliance compared white applicants with weaker credit profiles to non-white applicants with stronger credit profiles, who were searching for automobile financing. The testers of color were offered higher dealer interest rate markups on their loans, while the white applicants were offered lower interest rates and fees.
When the color of our skin determines our lending outcomes, that’s discrimination.
No one wants to keep looking back at slavery but as Angela Rye says, “we built this joint for free.” Our ancestors’ free labor created financial stability for white American families. And, after the Civil War, formerly enslaved Africans were never granted our fair share. Forty acres and a mule was a promise that was never kept.
In fact, the federal government actually enacted policies, which prohibited Blacks and other people of color from building wealth. These policies are responsible for today’s enormous racial wealth divide. In 2012, according to the Pew Research Center, whites had 12 times the wealth of African-Americans and 10 times the wealth of Latinos. Specifically, whites had a median wealth of $141,900 compared to $13,700 and $11,000 for Latinos and African-Americans, respectively.
Me: It’s deeply disturbing. In their report, The Ever-Growing Gap: Without Change, African-American and Latino Families Won’t Match White Wealth for Centuries, Prosperity Now and the Institute for Policy Studies found that “If average black family wealth continues to grow at the same pace it has over the past three decades, it would take black families 228 years to amass the same amount of wealth that white families have today!”
Nikitra: What all of America must understand is that this nation has a history replete with discriminatory laws and policies that together caused and sustained racial wealth gaps.
For example, The Homestead Act of 1862 provided land grants for western expansion that mostly benefited whites. Prosperity Now reports that 20% of Americans can potentially trace their families’ history of wealth to those land-grant allocations.
Another example is the Federal Housing Administration (FHA) insured mortgage program, which initially fostered discrimination in lending and institutionalized racism with the practice of redlining. In the first 35 years of the administration of the FHA program, only 2% of mortgages were granted to people of color.
Similar practices occurred at the Department of Veterans Affairs (VA). In the state of Mississippi alone, just 2 out of 3,229 VA-insured mortgages went to Black servicemembers in the first three years of the program.
These federal programs excluded families of color and denied them the chance to secure equal economic footing with whites. Recent remarks that I gave to the United States House of Representatives Committee on Financial Services go into greater detail on these points.
The sum effect of these policies and laws is that whites have had a huge advantage over people of color, when it comes to building wealth, in large part, because they had greater access to homeownership. And homeownership is the primary way that most Americans build wealth over time. This wealth has been transferred across generations and helps families pay for college; start a business; make down payment on a new home for a younger family member; or save for retirement.
Tom Shapiro, author of Toxic Inequality: How America’s Wealth Gap Destroys Mobility, Deepens the Racial Divide & Threatens Our Future, and Demos’ important research shows that the number of years that you own your home is the greatest contributor to the racial wealth gap. His research shows that if people of color had the same rate and length of homeownership as whites, we would close the racial wealth gap by 31% for Blacks and 28% for Latinos.
Me: What is the homeownership rate for Blacks vs. Whites? I should have asked you that first.
Nikitra: 72.4% of white families own their homes compared to 42.2% of Blacks.
Nikitra: The point is, this didn’t occur by happenstance. The racial wealth gap was socially engineered by federal policies that favored whites and intentionally disadvantaged Blacks and other people of color.
Me: It’s so important for us to know this history. But I have to admit, I’m often concerned that knowledge and information aren’t enough, especially in our era of “fake news.” How do we go from knowing the truth to making the critical changes necessary to significantly improve outcomes for our community?
Nikitra: We must stand up and say that it’s unacceptable that homeownership, which is the most important wealth-building tool for all Americans, is at the same rate for Blacks today as it was 50 years ago when the Fair Housing Act was passed.
To move forward and address these disparities, we must push a proactive and comprehensive policy agenda. We must demand access to mortgage credit, especially now that the market has been made safer by the reforms that are now threatened in the Dodd-Frank Act. We also need to understand how credit scores disadvantage Blacks. Finally, there must be accountability for financial service providers who treat similarly situated Black and white borrowers differently.
Me: Say a bit more about credit scores. It does seem that your credit score is an essential passport into the economy. How can we make them more equitable?
Nikitra: Credit scoring has only been used for the past 25 years and often does not consider all the variables that measure creditworthiness. For example, most scoring does not look at rental payment history.
It is likely that a person who pays their rent on time, will likely pay their mortgage on time too. Then, why not “count” rental payments when assessing creditworthiness?
Me: Interesting. I personally agree with everything you are saying but I can also hear the critics. What do you say to folks who say that we need to take responsibility for taking out bad loans?
Nikitra: We’re talking here about structural and systemic issues. The enormous wealth gap we see between people of color and whites cannot be explained through the lens of “personal responsibility.”
Yes, consumers should shop around when looking for financial products and many of us do. However, the testing that I referred to in the auto lending example earlier, shows that even when people of color have better credit characteristics they end up paying more. This isn’t an individual problem; it is systemic.
Me: Dr. Brittney Cooper, Associate Professor of Women’s and Gender Studies and Africana Studies at Rutgers University talks about how when it comes to the poor, we often see the political as personal vs. the other way around. I think that’s a real problem for how so many people understand the world and I’m glad that Black women, like you, are bringing a different perspective.
Nikitra: Yes. We have to ask, why is it that Black women make 63 cents for every one dollar a white man makes, regardless of the occupation or industry? Again, this is a systemic problem and requires a reworking of structures to build equity.
Me: Amen! Nikitra, where did you get your heart for justice? What sustains you?
Nikitra: [Laughs] I really think I was born this way. I believe that God sent me here with this passion. I recall having discussions with my mother at a very young age about standing up for equality.
Me: That’s sweet.
Nikitra: I always knew I’d do this type of work. My dream job was to be on the front-line fighting injustice as a civil rights advocate. I assumed it would be in traditional areas such as continuing the call for educational equity, and I was fortunate to receive an internship at the NAACP Legal Defense Fund when I was a law student. However, when I learned that these abusive financial practices were perfectly legal, I knew that eradicating predatory lending was the work for me!
In April, I joined our team in Memphis for the 50th anniversary of the commemoration of Dr. Martin Luther King Jr.’s assassination organized by the National Civil Rights Center and others. Diane Nash, Rep. John Lewis, and John Lawson were all there and shared how to disrupt an unjust system. They’ve dedicated their lives to building new and more equitable outcomes for all Americans. We must learn from their lessons and not be afraid to do the same thing today. We must be disruptors who seek to build a more inclusive society.
Today, we are blessed to work in coalition with many civil rights leaders and organizations such as the NAACP, National Urban League, National Fair Housing Alliance, Coalition on Black Civic Participation, Color of Change, etc. We also work closely with faith leaders who bring a sense of moral urgency to our cause. We need to call out predatory lenders who are robbing the poor. Together, we aim to build an economic agenda that provides opportunity for hard-working Americans so that all can have an ability to thrive.
Me: I love that. I’d love to see us be much more proactive in setting our own vs. reacting to someone else’s agenda.
Nikitra: We need to be very clear with candidates seeking our votes. Here is our economic agenda upfront. If you support it, I may vote for you. Steve Phillips, author of Brown is the New White: How the Demographic Revolution Has Created a New American Majority, was right when he said that both sides of the aisle have ignored us. And both assume they know what we want without asking. We can’t let this continue. We need to take the reins.
Me: Is there anything else you’d like to share with the BlackHer readers?
Nikitra: You asked before about who shaped me. I would like to acknowledge my mother and grandmother. I also want to recognize all the “ordinary Black women” who feed children, serve in places of worship, vote, and stand in the gap between what is and what’s possible. I feel very accountable to them and keep their sacrifices front and center. As Dr. Maya Angelou said, “I am the hope and dream of the slave.” They are part of what drives me.