Banking for the People.

Dear Reader,

Our mainstream banking system is failing most of us. This is not news or even a controversial statement—this is a reality that all of us have to contend with. In just the past few weeks, JP Morgan Chase (our largest bank) recorded its most profitable year ever with $50 billion in net income, and Navy Federal Credit Union (our largest credit union) was found to have the “widest disparity in mortgage approval rates between White and Black borrowers of any major lender.” All of this while Americans are finding it hard to cover expenses in an inflationary environment and household debt rose to its highest level of $17.3 trillion with the highest interest rates we’ve seen since 2001. It’s easy to point fingers and blame the individual institutions, but we know the problem is bigger than just one bank or one credit union—it’s the system that allows for this to continue.

We can often get lost in the myriad of problems and get stuck in a cycle trying to explain the many ways the banking system is failing us. Don’t get me wrong—it is important for us to be able to clearly understand and explain the problem from all angles. Yet it distracts us from the fact that there are also people and communities building solutions and creating new pathways for a more equitable banking system. This work of creating new institutions that serve our communities is challenging to move forward while we operate in our dominant system that seeks to extract from them. It’s hard to get attention, traction, funding, and acceptance. But, sometimes we have moments where this hard work is brought to light and can flourish. 

During the early days of the COVID pandemic, we had one of these openings, where we saw how Paycheck Protection Program loans that were distributed through our mainstream actors failed to reach the majority of small businesses run by entrepreneurs who are Black, Indigenous, or People of Color. In that moment, we saw a resurgence of attention and funding to support our Community Development Financial Institutions (CDFIs) that seek to reach people shut out of the mainstream funding spaces. And just one year ago we had another of these moments, with the failure of four banks—Silicon Valley Bank, Silvergate Bank, Signature Bank of New York, and First Republic Bank. It’s in these moments that have an opening for us to challenge the mainstream system and bring forward our community-centered ideas that build financial security and stability for all of us. In the wake of this, we’ve seen attention growing on who owns these assets and how to create institutions that can create opportunities for community-level wealth building.

What is important for us to remember is that this work has been happening and will continue to happen—whether or not these moments of opportunity open for us. These community-level solutions being built to address the failures of our banking system require our attention, participation, and funding. Without it, we will not be able to effectively challenge the dominant banking system.

We hope this selection of Next City’s journalism provides a slice of what continues to be built and sustained despite the challenges of existing in our current extractive systems. For those newer to this space, we hope it gives you the inspiration to join in and activate yourself in service of a more equitable banking system that provides safe and affordable products for its customers, invests in local communities, and enables broad-based wealth building. For those who are already in this work with us, we hope it reminds you that we are not alone and we are gaining traction. Change is inevitable and we are already creating it. 

In solidarity,

Sandhya Nakhasi
Co-CEO 
Common Future

Banking for the People.