This Week in ESG and Impact Investing

Banking, a cornerstone of economic activity, has historically been marred by unequal practices, particularly in loans issued to members of minority groups. A recent article on government programs addressing racial disadvantage offers a launching point to discuss similar issues in the banking sector. By not extending credit to minorities, banks not only fail in their social responsibility but also incur significant financial losses. This op-ed aims to highlight the tangible benefits of inclusive banking and the pitfalls of discriminatory practices, using the Navy Federal Credit Union case as a benchmark. Navy Federal, the largest credit union in the U.S., is currently facing a lawsuit over a report that it has been rejecting more than half of applications for conventional mortgages by Black borrowers while approving applications for white borrowers with similar income and debt levels. Banks that overlook minority applicants for loans are missing out on a significant market segment. This...

At a February 27, 2019 Financial Services Committee hearing on Monetary Policy, Rep. Al Green (TX) asked the following question of the hearing's only witness - Chairman of the Board of Governors of the Federal Reserve System (the Fed), Jerome Powell: "I want you to do a study on the impact discrimination has on the economy." ( See video at https://www.c-span.org/video/?458249-2/federal-reserve-chair-powell-testifies-day-capitol-hill&start=2499#) We attended the hearing (https://twisri.blogspot.com/2019/03/monetary-policy-and-state-of-economy.html) , and were delighted to hear the question, which, in light of events in New Zealand,  takes on new significance. Clearly, the economic and social cost of discrimination is growing worldwide, inspired by events in the US. This adds instability to the culture and, eventually, the  marketplace. This makes getting an accurate answer to Mr. Green's question critical. It is unclear that Federal Reserve ec...