October 28, 2023
Vice President Kamala Harris, in collaboration with the U.S. Treasury Department, recently unveiled the Freedman’s Bank Forum on Oct. 25, a critical initiative aimed at boosting federal suppliers and small businesses owned by Black, brown, and under-resourced individuals. Harris highlighted the importance of private sector collaboration with the government to address financial disparities, emphasizing that this partnership creates opportunities for millions of Americans seeking to own businesses.
“To bridge the financial disparities that hold so many of our communities back, we must continue to work together to combine the capacity of the private sector with the reach and the scale that only the government can provide.” Harris said at the Department of the Treasury during the Freedman’s Bank Forum 2023, reported Forbes.
“When we do, we create opportunity and prosperity for millions of Americans,” Harris added.
The original Freedman’s Savings and Trust Company was established in 1865 to aid newly freed African Americans, but it closed within two years due to mismanagement. Since then, Black people and businesses have encountered systemic discrimination in accessing capital and banking, which are the discrepancies VP Harris referred to. Despite progress over the years, a 2023 Brookings report revealed that Black people, constituting 14.2% of the U.S. population, represented only 2.4% of employer businesses, largely due to limited access to capital, credit, and investments.
Christopher Weaver, the executive director of the EOC, commended the historic public-private partnership, emphasizing that this effort aims to address economic disparities and accelerate opportunities in underserved communities. The EOC, which includes nearly 30 private sector companies and foundations, achieved a significant milestone by securing over $1 billion in deposits for community development financial institutions and minority depository institutions. Their new commitment targets $3 billion in deposits.
“The new private sector commitments announced today will maximize the Biden-Harris administration’s investments in expanding access to capital in low-income, rural, and other underserved communities, which increase long-term productivity and economic growth,” Treasury Secretary Janet Yellen said at the Oct. 25 forum.
The Biden-Harris administration, through the U.S. Treasury Department, has awarded $70 billion in federal contracts to small and disadvantaged businesses. Additionally, they have invested $12 billion in community lenders, including Black and brown banks. These investments are 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, including the Environmental Protection Agency and the Department of Energy, are launching initiatives to channel capital into clean energy projects, reduce pollution, and enhance climate resilience in low-income neighborhoods and Black and brown communities.
U.S. Senator Mark Warner praised these efforts and emphasized the importance of ensuring that small and disadvantaged businesses reap the benefits of significant legislation passed during the Biden administration.
The Freedman’s Bank Forum and similar initiatives underscore the federal government’s potential to address economic disparities and drive positive change when utilizing a comprehensive approach.
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