Netflix to deposit $ 100 million in black-owned banks

Streaming giant Netflix deposits $ 100 million of its cash in black-owned banks. The company says black-owned financial institutions have a harder time accessing capital and the move should help banks lend more to their communities.

There are only 21 black-owned banks in the United States, and they are mostly located in communities of color. Michael Neal, a senior associate researcher at the Urban Institute, said they don’t have the deposits other banks make.

“That then limits the amount of community loan and investment activity they can do,” Neal said.

At the black-owned Carver State Bank in Savannah, Georgia, Robert James II said more deposits could help his bank make more loans for affordable housing.

“We would be able to further expand small business capital,” James said. “We would be able to give more credit to some of the nonprofits we serve. “

But James said deposits are just a way to help black-owned banks.

And remember that a deposit is a liability for a bank, said Mehrsa Baradaran, professor of law at the University of California, Irvine, and author of “The Color of Money: Black Banks and the Racial Wealth Gap,” the book that inspired Netflix’s action.

The bank should be able to give you that money when you want it. It’s better for the bank if they can give you a loan.

“When I get a mortgage and pay a percentage to the bank every month, that’s a bank asset,” Baradaran said. “What creates wealth for banks – and for communities – are more opportunities for these assets, wealth creation assets.”

She said it was great to see Netflix committing money to help black banks, but even $ 100 million in deposits won’t solve the problem of racial disparities in wealth.

“This was a structural problem created by federal policies, laws and grants going to white communities and not black communities,” Baradaran said.

Until the country resolves these structural problems, she said, the racial wealth gap will continue to exist.

About Wilhelmina Go

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