Dear reader,
Welcome to the latest edition of The Forum File. In this edition, we are highlighting our firms’ work to strengthen economic advancement and wealth creation in minority communities.
We hope you enjoy reading this edition and please do not hesitate to share your feedback.
Kevin Fromer, President and CEO, Financial Services Forum
Penny For Your Thoughts
Otis Rolley joined Wells Fargo this summer as President of the Wells Fargo Foundation and head of Philanthropy and Community Impact. He joined Wells Fargo from the Rockefeller Foundation
First, congratulations on your new role. Can you give us an overview of your responsibilities at Wells Fargo?
I am responsible for Wells Fargo philanthropy, employee volunteerism and giving, and leading the company’s strategic vision on advancing community impact. I believe racial equity and improving outcomes for historically marginalized groups should be centered in all the work we do. I am excited about leading the Wells Fargo Foundation and an annual philanthropy budget of roughly $300 million and working with leaders across the company to drive meaningful change through both our philanthropic giving as well as through our business products and services.
Can you tell us a bit about your background and experience?
I am an urban planner by training and am fascinated by the complex barriers people face when it comes to economic opportunity and ways in which to remove them. I started my career in Baltimore municipal government advocating across five administrations for better housing, support for small businesses and infrastructure. Most recently I led national leading initiatives at the Rockefeller Foundation. I’ve come to understand what an effective public-private partnership looks like at scale and how all sectors need to collaborate to effect change.
Why did you choose to join Wells Fargo?
I want to drive positive change in local communities, especially for those facing the greatest barriers. I’ve been focused on that my entire career. Leading social impact at Wells Fargo is an opportunity to take my experience and vision and put it to work on a larger scale with more resources.
I honestly approached the interview process as a two-way conversation. There is a saying, do not talk about it, be about it. I felt that CEO Charlie Scharf was being about it in a real and systemic way and that there was values alignment between myself and the company.
The company knows it has more work to do.
Changes aren’t going to happen overnight, but they can’t happen at all without dedicated human and financial resources and a commitment from the top. I believe change is happening and wanted to be on the journey with Wells Fargo.
Do you have a vision or goal that you hope to achieve within Wells Fargo?
At Wells Fargo, our vision is to strengthen historically marginalized communities through economic advancement and wealth creation. Our priorities for the Wells Fargo Foundation are tied to our expertise – building financial health, creating greater access to quality homes, enabling small businesses to thrive, and supporting a low-carbon future. We recently launched a $60 million program called WORTH which aims to create 40,000 homebuyers of color by 2025 in eight markets. Our Open for Business Fund is benefiting more than 150,000 small businesses. My goal is to accelerate this work and add my personal and work experience to the process.
Value Add
Wells Fargo’s WORTH Initiative Continues to Build Homeownership Opportunities; Partnering to Expand Entrepreneurial Equity
As a company, Wells Fargo is committed to creating opportunities for more people of color to buy their own homes, which in turn, grows generational wealth. Launching in 2022 across eight U.S. markets, Wells Fargo’s Wealth Opportunity Restored Through Homeownership (WORTH) initiative is a $60 million national effort to address systematic barriers to homeownership for people of color. Nationally, WORTH aims to help create 40,000 new homeowners of color by the end of 2025.
The WORTH initiative builds on Wells Fargo’s ongoing efforts to increase racial equity in homeownership. Wells Fargo’s $40 million Growing Diverse Housing Developers program is also working to expand housing inventory in communities of color, among other initiatives. The company also recently launched a Special Purpose Credit Program to help eligible homeowners of color whose mortgages are serviced by Wells Fargo lower their interest rates and reduce their monthly mortgage payments.
Helping more people have an equitable pathway to entrepreneurship is also a priority for Wells Fargo. This year the company joined forces with Third Way and the National Urban League to launch the Alliance for Entrepreneurial Equity, a one-of-a-kind effort that will develop and promote federal policies to increase opportunities for entrepreneurs of color and women to start and expand successful businesses. To amplify the need for entrepreneurial equity, Wells Fargo hosted an event with the Washington Post with CEO Charlie Scharf, Sheila Johnson, co-founder of BET and CEO of Salamander Resorts, and Marc Morial, President of the National Urban League. Together, their conversation focused on the role of the private sector and government in supporting the creation, sustainment, and expansion of women- and diverse-owned small businesses.
The conversation continued with Small Business Administration Administrator Isabella Casillas Guzman and Havenly co-founders Lee Mayer and Emily Motayed Lancaster about the entrepreneurial landscape, equitable access to economic opportunity and the role of early investment.
Capital Gains
What we’re doing in Washington
In a new op-ed in the American Banker, Forum President and CEO Kevin Fromer urged the Federal Reserve to be more transparent and to solicit public input for its comprehensive review of the bank capital framework: “A comprehensive review of the capital framework and soliciting public input are necessary to ensure a safe and sound banking system in balance with the promotion of economic growth. Doing one without the other will be counterproductive — and risks reaching an outcome that does not reflect the needs of our economy.”
The Forum issued a statement regarding the FDIC’s 2021 National Survey of Unbanked and Underbanked Households, which found that the share of unbanked households has dropped to historic lows. The Forum noted that our members have long been on the frontlines in the effort to bring unbanked and underbanked Americans into the financial mainstream, and the survey’s encouraging results reflect our members’ ongoing commitment to that goal.
The Forum and other trade associations provided joint comments to the Basel Committee on Banking Supervision regarding the committee’s second consultative document on the prudential treatment of cryptoasset exposures. The trades welcomed the Basel Committee’s continued focus on designing a prudential framework for cryptoassets that is risk sensitive and looked forward to continuing collaboration with the committee as the markets continue to evolve.
Our Two Cents
Research from the Forum
The BankNotes Blog Spotlighted:
- Research and recent data from the U.S. banking system demonstrating that increasing capital requirements reduces lending.
- Questions raised about the incentives to engage in private market making in the government bond market in light of the recent bout of volatility in the UK gilt market.
- Scheduled increases in GSIB capital surcharges and explained how they’re unwarranted, unhelpful, and will only serve to weaken our economy.
- The bigger and more consequential open issues with the current large bank capital regime that regulators should address before moving ahead with Basel III Finalization.
Checking the Balance
Members in the news
Bank of America announced an additional $100 million in low-cost deposits to minority depository institutions (MDIs), which will facilitate lending, housing, neighborhood revitalization and other banking services in minority and low- to moderate-income communities. The announcement doubles the bank’s commitment to deposits in MDIs, part of the company’s $2 billion portfolio of loans, deposits and investments in Community Development Financial Institutions (CDFIs) and MDIs.
Eight Citi leaders were named to American Banker’s 2022 Most Powerful Women Lists while Citi continues to raise the bar for diversity with its newly announced expansion of diversity representation goals to include additional markets and underrepresented groups.
BNY Mellon launched Vaia, an aggregated payment platform that gives U.S.-based institutions access to digital payment options for disbursements. Integrated with BNY Mellon, institutions can provide their payees with access to a range of payment choices – including real-time payments, Same-Day ACH, Tokenized Payments, and debit cards – on a client-branded front end. Vaia leverages BNY Mellon’s Account Validation Services to verify payee identities and validate accounts end-to-end, helping to mitigate payment fraud.
Goldman Sachs hosted its inaugural Advancing Allyship conference which brought together renowned thought leaders in diversity, equity, and inclusion to collectively advance the firm’s commitments toward allyship for its employees and communities. The firm will also be releasing a series of Allyship guides for clients and companies to help foster a culture of inclusion.
JPMorgan Chase celebrated the 10-year anniversary and hosted its 100th Code for Good hackathon in New York City. The program pairs university students with JPMorgan Chase technology professionals to develop creative solutions to help global nonprofits. After the event concludes, solutions are implemented for the nonprofits and the JPMorgan employees continue to serve as mentors for the students. The firm recognizes that many nonprofits have a need for technology resources to improve their operations.
Morgan Stanley, in partnership with Centri Tech Foundation, announced the inaugural winners of the Social Justice Innovation Awards. This new strategic initiative aims to advance social and racial justice and help drive greater inclusive economic opportunity. The awardees will participate in a nine-month collaborative program in which they receive leadership coaching, support for tech-enabled strategies and access to professional networks. Each organization will also be awarded $250,000 to support their work.
State Street announced its commitment as an inaugural employer pursuing the Management Leadership for Tomorrow Hispanic Equity at Work Certification. This first-of-its kind certification sets clear, measurable standards for achieving Hispanic equity internally and for contributing to Hispanic equity in society. This Certification will provide State Street with a guide to evaluate equity in the workplace and builds on the bank’s 10 Actions to combat racism and inequality commitment.
The Wells Fargo Foundation and nonprofit Elevate are collaborating to provide Chicago residents with access to clean, low-cost energy and inclusive workforce development opportunities. The two-year project, which is supported by a $3.15 million grant from the Wells Fargo Foundation, will support the decarbonization of approximately 100 homes for people with lower incomes. The effort will also expand access to Elevate’s Contractor Accelerator, which connects women and contractors of color with training and resources to work on clean energy projects.