October 28th 2023.
Vice President Kamala Harris recently unveiled the Freedman's Bank Forum, an initiative aimed at boosting federal suppliers and small businesses owned by Black, brown, and under-resourced individuals. At the Department of the Treasury during the Freedman’s Bank Forum 2023, she highlighted the importance of private sector collaboration with the government in order to bridge the financial disparities that hold so many of our communities back.
"When we combine the capacity of the private sector with the reach and the scale that only the government can provide, we create opportunity and prosperity for millions of Americans," Harris said.
The original Freedman’s Savings and Trust Company was created in 1865 to aid freed African Americans, but it soon closed due to mismanagement. Since then, Black people and businesses have experienced systemic discrimination in accessing capital and banking. Despite progress over the years, a 2023 Brookings report showed that Black people, who make up 14.2% of the U.S. population, only represented 2.4% of employer businesses due to limited access to capital, credit, and investments.
Christopher Weaver, the executive director of the EOC, commended this public-private partnership in addressing economic disparities. He emphasized that the EOC, which includes nearly 30 private sector companies and foundations, has already achieved a significant milestone by securing over $1 billion in deposits for community development financial institutions and minority depository institutions. Additionally, they have committed to targeting $3 billion in deposits.
Treasury Secretary Janet Yellen also praised this effort, noting that it will expand access to capital in low-income, rural, and other underserved communities. She stated that this will increase long-term productivity and economic growth.
In addition to the Freedman's Bank Forum, the Biden-Harris administration has awarded $70 billion in federal contracts to small and disadvantaged businesses. They have also invested $12 billion in community lenders, including Black and brown banks. This is expected to result in an increase of over $80 billion in lending to Black communities and $50 billion in Latino communities across the U.S. Other federal agencies, such as the Environmental Protection Agency and the Department of Energy, are launching initiatives to channel capital into clean energy projects and reduce pollution in low-income neighborhoods.
U.S. Senator Mark Warner praised these efforts and highlighted the importance of ensuring that small and disadvantaged businesses reap the benefits of this significant legislation.
The Freedman’s Bank Forum and related initiatives demonstrate the federal government’s potential to address economic disparities and drive positive change when utilizing a comprehensive approach.
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