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Current Affairs

A Magazine of Politics and Culture

How The Financial Industry’s ‘White Wall’ Maintains the Racial Wealth Gap

New York Times reporter Emily Flitter explains the workings of systemic racism in finance.

Emily Flitter is one of the country’s leading financial journalists, covering the misdeeds of corporate America for the New York Times. Her first book, The White Wall: How Big Finance Bankrupts Black America, exposes the many ways in which systemic racism operates in the financial industry, from tellers who call the cops on Black customers to the historical roots of the big banks’ wealth. Emily recently joined Current Affairs editor-in-chief Nathan J. Robinson to talk about the many “bricks” that create a “white wall” in finance, keeping Black Americans from closing the wealth gap. Emily is also scathing about the superficiality of corporate diversity efforts, which she says are often a feel-good effort to paper over systemic injustices and avoid having to actually redistribute wealth. Emily’s work shows how conservatives are completely wrong to think big corporations have “gone woke”—in fact, the very reason they talk so loudly about their commitment to anti-racism is that these companies are not doing anything to substantively alter the balance of wealth and power.

Nathan J. Robinson 

Your book covers many different pieces of the financial system and the different ways in which racism enters the system. We hear a lot of talk about systemic or structural racism, but you help us better understand where exactly it is in the system. Is it individual discrimination today, or is it the legacy of past discrimination? Could you give us a broad level overview of what you are analyzing and showing us in this book?

Emily Flitter 

The reason that I called the book The White Wall is because I feel the various inputs of racism into the financial system that I described are like bricks in a wall that keep Black Americans out. I’ve tried to examine these racist inputs, brick by brick. There’s discrimination against Black customers who walk into the door of a bank. There’s discrimination against Black bank employees, both in retail banks—the kinds of banks that you and I use to get checking services and to do regular savings services—as well as Wall Street banks, where Black employees have lower earning potential and potential for advancement than their white counterparts in many different ways. There is racism and discrimination in the insurance industry, which is the mechanism through which most people build and preserve wealth. That’s how you make sure that if something bad happens to your house or your car, you can get that fixed without experiencing a catastrophic loss.

Racism is built into the technology that is supposed to actually take discrimination out of the financial system, the algorithms that are supposed to make decisions about lending instead of leaving those decisions to potentially biased humans. When they are built, they use the data that has accumulated over the 20th and early 21st century, and all the past discrimination gets fed into the system, which is told that it’s normal and gets perpetuated.

So, there are many different inputs that are really damaging, and they’re subtle, in ways that lead the people who are participating in the system and actually perpetuating this discrimination to often not even notice that it’s happening.


Let’s look a little more closely at the individual bricks in this wall. Early on in the book, you write about the everyday experiences of Black customers as they go into banks and try to cash checks. Often, what should be perfectly ordinary financial transactions turn out to be really harrowing experiences for people.


Yes. I was able to see emails exchanged between tellers at JPMorgan Chase branches in the U.S. Northeast. The emails are designed to warn tellers at different branches of potentially suspicious customers who may be coming to their branch. It’s a system that, in theory, makes sense. If you’re working in a highly populated area where several bank branches are located close to each other, and somebody comes in and tries to scam the tellers, it makes sense for the tellers to warn the branches in the area about the person that came in and behaved in a suspicious way— “watch out for this person, because they didn’t succeed here, but they might try you guys next.”

That’s how this email system is set up to warn area branches. But when I saw what the tellers were sharing with each other, there was a really distinct set of descriptions that were attached to Black customers where there wasn’t suspicious activity described—it was just that the customers were Black. It was really mind-blowing. Instead of saying “this person presented an ID that’s already been reported stolen,” it was, “this Black man came in with a check, and we refused to cash it.”

Consider that from the customer’s perspective. You have a check someone gave to you, it’s worth money, and you should be able to get the cash. You go to the bank, they look at you, and because of the color of your skin, they just don’t believe you deserve to have this money. That happens over and over again.


You quote these emails and they really are extraordinary:

“I had a young gentleman come in, African American with dreadlocks, around 21 years old. The account was recently opened, and a transfer was made to the account for $17,000. The client wanted to withdraw $6,500, but had already made a $7,000 withdrawal at another branch. I declined the transaction, and he went to our ATM to withdraw $1,000. The client had a debit card and PIN. He also had a CT driver’s license. [We are] calling fraud department now to get the account restricted.”

A few days after that, there’s another one.

“Young Black man around six foot wearing a red jacket came in and attempted to withdraw $9,500 from account. We called fraud, and they said the account has been restricted. However, the account is still open. He left saying that he lives in New Rochelle and will be going to a branch there. Please be cautious in doing any transactions.”

Nothing indicating what could possibly have been fraudulent, and they specifically cite dreadlocks, race, young Black man in a jacket. It’s extraordinary.


Yes. And I got to see emails where race wasn’t a factor and the people who were being described were not Black. I know because a lot of times these emails have the person’s driver’s license attached. They’ve scanned the driver’s license and made a copy. You can see that when the person isn’t Black, and they still think there’s something suspicious, they actually take the time to describe the suspicious thing.


You also talk to people on the other side of the emails—the actual customers—and they talk about trying to do some ordinary business at the bank and then having the police called on them, which, obviously, for Black Americans is essentially the threat of bodily violence. It’s a horrendous thing to have to go through.


It’s terrible. And since this book has come out, every person who I’ve spoken to who is Black and has read the book, without exception, has said, “I experienced this personally.” Every single person. It’s such a widespread problem. If you’re white, it’s a problem you just have never had to deal with, and it becomes almost unimaginable. That’s why I think it’s really important that people pay attention to this. It’s happening all around them.


Yes. White people in America go to the bank without a second thought. As you say, it’s inconceivable that banks would suddenly, for no reason, say, “Oh, I’m sorry, we can’t serve you. You have to leave. And if you protest, we’ll call the police.”

Let’s talk about some of the other bricks. What you described is the very micro level brick. You also write about patterns of lending: who gets capital for their businesses, who got PPP loans—which were decided by the banks—and the various ways in which banks serve as the gatekeepers to who’s able to build wealth and how.


Yes. The decision to give credit to people is a decision that banks take very seriously. They see themselves as the stewards of this trust system, and as the stewards of economic growth as it is fostered by credit. And their decisions about who deserves money and who deserves trust are still very racist. Black business owners have a huge impediment to getting business loans. Black entrepreneurs go into a bank and are told that they haven’t provided enough evidence that their business ideas are good enough.

The Paycheck Protection Program really showed, in numbers, how that worked. It was actually a fascinating test. There is no requirement that banks [must] report their business loans to the government and include how they break down by race. That’s in contrast to how home loans are tracked. Ever since the late ’70s, I believe, banks have had to report who they’re giving mortgages to because there has been such a dramatic history of redlining in this country, where banks and cities got together and decided they are not providing financial services in Black neighborhoods to Black people. In order to combat that, the federal government put in place the requirement that every mortgage has to be documented, and banks have to report the race of the borrower, among many other things.

But there is no such requirement for small business loans. The PPP, which was basically the federal government’s efforts to prop up businesses during the coronavirus shut down by distributing aid, used the loan format and banks distributing things as loans just to sort of be a check, to process all of these demands for money, and also make sure that fraudsters weren’t getting it. It provided this first ever widespread documentation of who could get a business loan. Every study of the PPP distribution showed that Black businesses had a much harder time getting these loans—they just weren’t believed. In addition to that, their prior exclusion from the system of credit in this country disadvantaged them where the PPP was concerned, meaning: if you didn’t have a good lending relationship with a bank already, it was really hard to get a PPP loan.


There’s this myth Milton Friedman puts forward in his famous manifesto Capitalism and Freedom that in a free market system, racism can’t really persist because every financial institution is going to pursue their self-interest, and racism is not in their financial self-interest, so they won’t do it. It won’t really last or be a big problem. But you draw attention to all the points where someone has to subjectively make a decision or an evaluation, like whether the bank is going to give a particular client “special client status.” Those decisions then come to reflect the biases that whoever is in the position of power holds.


That’s correct. In fact, Milton Friedman’s assumptions, as you just laid out, have a degree of unacknowledged bias in them. Friedman’s idea that what is in the best interest for participants in the financial industry—financial institutions and individual investors—is race neutral is just wrong. There’s an assumption of who deserves to have money in this country, and it goes back to the beginnings of this country, to a time when Africans were brought here as slaves and didn’t deserve basic human rights.

And that persists. The idea that one can’t make decisions based on a desire to be fair, to bring about racial justice because those are, by definition, not good for a company’s bottom line—that in itself carries these assumptions about who deserves money and who doesn’t, and what is proper. Those assumptions are only just beginning to be questioned by participants on the margins of the traditional financial system, and that questioning needs to go a lot further. My book shows why.


That’s interesting. It’s not just that the gatekeepers do, in fact, have racial biases. But, when you start with a situation where there has been a continuous massive Black/white wealth gap since the time of slavery, the very idea that—as Friedman famously said—”the social responsibility of business is to increase its profits” means there is a conception that it is legitimate for those who presently have wealth to hoard it and build this wall.

Talking about history, I always come back to Karl Marx’s expression, “The tradition of all dead generations weighs like a nightmare on the brains of the living”—how everything that has happened before shapes everything that exists today. We’ve been talking so far about things that occur in the present day. Talk about the component of your book that addresses how the past affects the present.


I describe the influence of the past in two different ways. The first is on data. We are relying more and more on AI to make credit decisions and about whom to advertise financial services to. These algorithms are supposed to be neutral, and not supposed to discriminate against different groups of people. But they do, and one of the reasons why they do is because they’re built on the inputs of a racist past. And it’s not like we don’t also have a racist present. But if you look at what the median home value is in a neighborhood that has had its home values depressed for 60 years because of redlining, you’re not going to want to lend somebody a lot of money to buy a home in that neighborhood. It doesn’t make sense to the computer. Credit scores are built on a completely uneven treatment of the customers, who are responsible for building up their credit score. Then, if you feed the credit score into the algorithm, you’re still coming up with something that is massively biased against Black Americans.

Another way that history affects the current state of the financial industry is that the biggest Wall Street banks all got really rich during the time in which their predecessors were profiting from, if not directly from owning slaves, ensuring slaves, or mortgaging slaves, then from the economic activity that was generated by slaves. I go really deep into the example of Citigroup. All of these banks at a certain point were required by certain municipalities to disclose the profits their predecessors have gotten from slavery, and Citigroup, when required to answer whether it had profited from slavery, said they never did. But its de facto grandfather, Moses Taylor, who became president of the City Bank of New York in the middle part of the 19th century, made his fortune in trading with the Cuban sugar plantations. He became so rich that he was able to help prop Citigroup up through financial panics that wiped out other banks. This is how Citigroup says they didn’t profit from slavery. They didn’t include Moses Taylor’s personal wealth in their assessment. All of these advantages carry momentum through generations and create this really disturbing disconnect for people who have been the victims of this treatment.

The big banks want to tell you that everything is fine, everything is fair, and everyone has the same opportunities. It’s just not true, and never has been. This is such a huge psychological weight that we, as a country, bear. If we could turn and face our history, we might be able to shed some of this weight.


And of course, it’s not even just that their wealth is built on slavery, but also built on the racist system that came after slavery. I was reading Sam Walton’s memoir about building Walmart, and I think a family member lent him the equivalent of $300,000 in Arkansas, in the 1940s, to start Walmart. His children are now some of the wealthiest people in the world. What Black family in Arkansas in the 1940s could have gotten a $300,000 loan from any source? So you have the Jim Crow distribution of wealth in the 1940s carrying itself through to the billionaires of 2022.


Absolutely. And the answer to your rhetorical question of which Black families could have handed down that kind of wealth in the 1940s, the answer is absolutely zero. 


Could you tell us more about how, even post-slavery, wealth was built and distributed in ways that shaped where we are today?


There are just so many mind-blowing stories of how wealth was actually taken away from Black families. Not all of those stories are in my book. In fact, there’s a great book by Andrew Kahrl, a professor at the University of Virginia, called The Land Was Ours. It’s about how Black families who owned coastal properties in the Southeast U.S. had those properties stripped away from them through collusion between lawyers tax collectors and land developers. It’s just heartbreaking.

It happened everywhere. Keeanga-Yamahtta Taylor‘s work, which I cite in my book, documented the way Black homeowners were treated in the mid-20th century. They were given expensive loans for totally inadequate properties, and then blamed for the dilapidation of these properties, as though their stewardship caused them to be so poorly conditioned, when, in fact, that was all that Black families were allowed to have. The cities didn’t provide them with the same services, like garbage collection. These are all impediments to building and preserving wealth that white Americans never had to face, and so you get to the place where we are.

This is in addition to bankers deciding who deserves loans, who deserves to have money, to the justice system in the United States not working for Black business owners who had things taken away from them. We had pogroms in the 20th century in the United States. I don’t know what your family history is, but my family came to this country to escape pogroms in Eastern Europe. It’s just wild to me that Black businesses could be destroyed. Black people were murdered without consequence in the South, and it happened all the way up into the ’60s, and it still happens with police brutality today. All of these are incidents that cost and take money away, and no one ever gets it back.


One of the bricks that we have not yet talked about in detail is the stories of Black employees within financial firms, who are often given the worst assignments and face various kinds of discrimination. Could you discuss the world faced by Black employees in financial corporations?


Let me start out by saying that all the stories that I heard about this involved an extreme amount of gaslighting. There’s the story of Kayode Odeleye, a Black investment banker covering Nigeria for Standard Chartered Bank, which is based in London, but being run now by an ex-JPMorgan executive. He was great at his job helping corporations in Nigeria finance their expansion through issuing debt through structured loans. He was moving up through the organization until a particular boss came in and started systematically firing all the Black people who were working in the Africa division of Standard Chartered Investment Bank.

Kayode’s performance reviews started to get bad, even though he wasn’t doing anything wrong. The amazing thing about this story is that he knew what was happening. He had been talking with other employees who were experiencing the same thing, and he put together this entire presentation. Investment bankers love pitch books, make charts, and doing presentations. He puts a presentation like this together and took it directly to the CEO, Bill Winters, who’s from the United States and was high up at JPMorgan. He’s supposed to be one of the best executives in the world in banking. Kayode wrote to him with this presentation [showing why he’s] being unjustly persecuted in his job by his boss, because [he’s] Black. Winters wrote back, “Thank you KayodeOdeleye,”—he smashed his first and last names together—”Our organization has no tolerance for racism. I’m sure that if you reported this, the HR team has reviewed it thoroughly. I don’t think there’s anything else we can do.”

That is a very common response that these big banks have. They often, when somebody points out the experiences that they’re going through being treated unfairly because of the color of their skin, will say, “Well, it can’t be happening because we have no tolerance for racism, we have a zero tolerance policy here.” So, forget actually getting justice if you’re Black and being mistreated. You have to basically find a private outlet or support networks to release some steam and soldier on. As you go higher and higher into the ranks of these big investment banks, you find fewer people who can survive that onslaught. It’s not because they’re deficient, but because the whole system is working against them all the time.


“You can’t possibly be discriminated against, our handbook explicitly prohibits that” is an incredible response. But you mentioned gaslighting, and one of the things that becomes obvious from the stories you tell in your book is that it’s often very difficult to prove, even when people know or suspect that something is done to them because of racism. It will be denied unless you have someone on tape saying the N-word. How are you ever going to prove beyond a reasonable doubt, to their satisfaction, that this is actually the cause? I imagine this is an incredibly aggravating experience for people who know why it’s happening, but then can’t produce definitive evidence.


Exactly. One of the things that I learned as a reporter while working on this book is that there’s a broader context that these stories exist in. The fundamental problem with the justice systems in companies, as such, these HR protocols, is that they start out without this context. They exist in this hypothetical, completely even world where one employee’s word is as good as another. The broader context is that this mistreatment of Black employees is so frequent. It’s such a pattern, that once you hear 10 or 15 stories about it, you realize that all the things that are just “maybes” are definite “yeses” when it comes to deciding what counts as discrimination and what doesn’t.

I want to share, if I may, a story that’s not in the book because it had happened after it was published. A reader who has had a long career in the financial services industry spoke to me about her experiences. She read my book, and one of the first characters she encountered was this lawyer, Linda Friedman. Linda has sued every big bank in the United States on behalf of classes of Black employees who are claiming discrimination, and she has reached settlements in the tens and hundreds of millions of dollars with these banks. They know her and that by the time she comes knocking, she’s done her homework and has the evidence. It’s really incredible what she has been able to do. But, the person who read my book and knew Linda said to me that they were part of two of these class actions.

The first one was at Merrill Lynch Bank of America. She had arrived there after it was already in motion. She knew she was part of the class action lawsuit because she was Black. But other than that, she said, it just really didn’t affect her. Then, she went to a second major financial advisory firm, MetLife. She had just gotten there, and started to experience the same mistreatment. What the mistreatment looks like is: if you’re a financial advisor, you don’t get access to the same business opportunities, you get pigeonholed and put in neighborhoods that are poor, because they’re majority Black, and basically thrown into a corner. And the white advisors who may be just as inexperienced as you are literally being handed business from retiring older advisors, and you don’t get any of that.

Linda Friedman called her and said they needed her to be a lead plaintiff in a discrimination case they were putting together, and the reason Linda needed her is because she’s experiencing all this discrimination and hasn’t been there long enough for there to be really be any employment history there. They can’t point to anything she has done wrong; she just got there. And this person who was telling me this story said, “Look, I don’t know if what I’m experiencing is discrimination, and I think I can overcome it. I think if I just work really hard, I can get past this bad initial period.” Linda responded, “Okay, why don’t you tell me what is happening to you in narrative form?” This person starts telling her, and Linda starts finishing her sentences. And that’s how she convinced this person to participate in the lawsuit.

The reason I’m telling you this story is that Linda brought that context to this individual case. What happens day in and day out at these big financial firms, and with journalists who are trying to tell these stories, is when you start out without that context, you’re not starting from zero, you’re starting from well below that. And that’s the problem.

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One of the questions that I was going to ask you is: why don’t anti-discrimination laws work, then? A lot of what is being described is technically illegal, but difficult to prove.


You’re right. There are means for pursuing civil remedies. You can get a settlement, and the federal government can fine employers who are violating civil rights laws. You would be surprised at what’s not illegal, though. In the consumer context, discriminating against consumers in a way that doesn’t impede them from actually completing a business transaction isn’t considered illegal, at least by all the Federal Appeals Circuit. In the Southeast U.S., there was a decision in which a Latino customer who went to Target and was sent away from a particular register by a white cashier, but then was able to complete his transaction at another cashier, didn’t have grounds to say that his civil rights had been violated.

Now, it’s fascinating, though. The Justice Department under the Biden administration has gotten creative. I broke a story in 2022 in which Wells Fargo was conducting fake interviews of candidates who were non-white men to juice their diversity numbers. They’ve said that they don’t think this problem is widespread, but they admit that it has happened. My reporting has shown that it’s actually really widespread. When I published this story, the U.S. Attorney’s Office for the Southern District of New York opened the first ever criminal investigation into whether a company like Wells Fargo has violated the human rights of its employees and potential employees by doing these fake interviews. That’s going to be a really interesting thing, and we’ll see where it goes.


The fake interviews case gets us to something you discuss a lot in the book, which is the way in which corporations pretend to care about stopping racism. Wells Fargo had a policy that a certain percent of interviews have to be “diverse candidates,” and then, of course, they just faked it. You’ve also reported on how JPMorgan had made a pledge of tens of billions of dollars to close the Black/white wealth gap, and you dove into what they actually spent that money on. Conservatives are always complaining about woke corporations using all this antiracist language. And it is true that a lot of corporations today make a big noise about their commitment to diversity, inclusion, and equality. But what you show in the book and in your other reporting is how often so much of this is completely hollow.


Yes. Full of sound and fury, signifying nothing. The diversity shows that big financial services corporations and other industries put on are really empty. One of the biggest problems is they don’t start out with any deep and honest assessment of what the problem is. JPMorgan wants to talk about the racial wealth gap and top line figures about how big the racial wealth gap is, but they’re not going to talk about their tellers turning away potential Black customers and not cashing their checks. Or, how they’re not giving enough mortgage loans to Black people as a percentage of their entire mortgage business. So they say, “We’re going to pledge to put money toward closing the racial wealth gap by making mortgage loans to Black and Latino borrowers.” But that doesn’t really increase the percentage of those borrowers who are getting mortgage loans compared to anybody else at JPMorgan.

It’s meaningless. Plus, JPMorgan is earning money on those mortgages. They’re earning money in this pledge for making loans to developers who get low-income housing tax credits—that’s a really lucrative business, and all of a sudden, it counts as being JPMorgan’s do-gooder effort. It’s so different from what they could do if they actually said, “Here’s the problem that we’ve identified, and here’s specific information about how we contribute to the problem, and here’s what we’re going to change forever about our businesses.” Not just for $30 billion, and then it’s over, but forever, in order to make this problem go away.

They haven’t done that. And really, no bank has. Although JPMorgan’s pledge was the biggest in numbers, they’re kind of the worst for self-reflection. Even Citigroup has recently gone farther in their attempts to get feedback from communities and to try to make changes.


You’re a journalist, not a legislator, so I won’t ask you for a policy platform. But, [let’s] think constructively about the difference between a B.S. solution to racism and a meaningful one that starts to remove some bricks from the wall. You mentioned the Fair Access to Financial Services Act that was introduced, but never passed. What has been proposed that you think would actually be a step forward, as opposed to just rhetoric and sound and fury signifying nothing?


Here’s what I do propose in the book. The big picture: I think that all of these major banks and other big financial services companies need to support a reparations movement as it is being advanced in Congress. I’m not saying we need to sue all these companies to high heaven and get them to pay reparations, and the reason I’m not saying that is because it was tried, and it didn’t work. Suing these companies just makes them more defensive. They need to get on board with the level of injustice that has been done against Black Americans, and publicly support fixing it. The reason why I think this is actually going to have a concrete impact on the industry is that if they talk about it and have to explain it, their employees and the wider American public is going to have to internalize it. It will help bring about a truth and reconciliation moment that this country desperately needs.

As you pointed out, Republicans have been criticizing woke corporations and woke language. We need to go much further down this path of actually acknowledging past and present injustices. In the recent arguments in front of the Supreme Court over whether universities should still have affirmative action programs, I believe it was Justice Alito who talked about how the Civil War was fought to end discrimination. What a total misread of history! We need to talk about history as it happened, and as it has actually influenced the present. We need to have corporate America own up to what it did, and is still doing.

And if that happens, I think every person who participates in the system is going to start thinking about themselves differently, and think differently about their daily interactions. Because I really believe that there are fewer evil hearted people out there than there are white people who just don’t really understand how they fit into this system. If they did understand it, they would change.


Yes. Finally, as I was looking through your New York Times bylines, it struck me that racism is only one of the many various kinds of faults or injustices that you report on in the corporate sector. You’ve reported on how Bank of America was illegitimately letting creditors take from customers accounts, and on the FTX fiasco and the fraud of Sam Bankman-Fried. There’s a lot of corporate misbehavior out there to be exposed and gotten rid of. It’s a little overwhelming, isn’t it?


It’s overwhelming. But I really think that shining a light on racism in corporate America is something that more people have to do. It’s not just me right now, of course. But it has to be even more people than currently are devoting time to this. And yes, you’ve just identified the function of journalism and financial journalism. No one else is going to point this stuff out. If we don’t, the federal government and state regulators only have so much power and resources. Also, they are, in some cases, so captured by these really powerful firms, that if the public doesn’t know what’s going on, nothing really changes.

Hear more great conversations on the Current Affairs podcast.

Transcript edited by Patrick Farnsworth.

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