CEO has ideas on how to close the wealth gap

It’s not about race. It’s about power.

What you probably already know: We’ve covered in several editions the pushback against DE&I and organizations who invest in underrepresented groups. But how did we get here? Tonita Webb, the CEO of Seattle-based Verity Credit Union, knows a thing about that. She recently earned her Ph.D. in business administration with a focus on the wealth gap in this country. People are pushing back against these new initiatives, she said, because “they have in their mind they’re going to lose something.” But as we know, the economy is not pie — there’s plenty of opportunity to go around.

Why? Exclusionary policies like redlining have resulted in significantly lower homeownership among Black households, for example, which means generations of Black people didn’t benefit from the rise in home prices. Only about 45% of Black households own their homes compared to 73% of white and 63% of Asian households. The rationale that if underrepresented groups get more, then the wealthier groups will get less is just flawed, Webb said. "If we close the wealth gap, we’ll add 6-to-8 percent to the GDP,” she said. That’s because more people will be buying homes, paying more taxes, and spending more on daily items.

What it means: The work organizations like the American Alliance for Equal Rights are doing to attempt to stop underrepresented groups from gaining access to specially earmarked capital to grow their businesses and get access to education is already having deleterious effects on those populations. Many of the new programs created in the last decade have disappeared. For Webb, stories like that just fortify her resolve. Her credit union stays within the regulations, of course, but works hard to expand its reach and connect with populations that have not traditionally been able to have relationships with banks and often don’t trust them.

What happens now? Verity uses technology like artificial intelligence to look at factors beyond credit score to determine if someone is likely to pay back a loan. Credit scores are well known to contain racial bias. Webb has also hired diverse leaders into her institution who understand the populations they’re serving and can meet them where they are. That can help people who have been discriminated against feel more welcome and to build trust in the institution. At its core, Webb said, you have to be intentional if you want to close the wealth gap. “If you go back in this country to how it started,” Webb said, “it was really about capitalism and who has the power. It wasn’t about race. It was about power. And it continues to be about power.”