PayPal, the Congressional Black Caucus Institute (CBCI), and two HBCU schools have released a new research paper on financial health in the Black community.
The paper, titled, Reducing the Racial Financial Health Gap: The Opportunity for Responsible Fintech, addresses the financial health in the Black community and the unique role that financial technology (fintech) companies can play in reducing the financial health and wealth gaps.
It also outlines how gaps in education, income, employment, banking, and credit access, reinforced by racial discrimination that continues today, contribute to racial wealth gaps and disparities in financial health. PayPal and the CBCI also provide recommendations on how the public and private sectors can close these gaps and promote financial health for Black Americans, including:
- Partnering with HBCU schools: HBCUs produce nearly 20% of all Black graduates and 25% of Black graduates in science, technology, engineering, and mathematics. The paper recommends finance companies partner with HBCU schools to build a financial health curriculum to help narrow the racial wealth gap.
- Develop Inclusive Financial Products: The paper suggests companies in the fintech industry create products for those who are credit invisible or who have low credit that can help build an individual’s savings and teach them about other aspects of the financial game.
- Combining Private Sector Innovation with Public Policy: The paper recommends fintech companies and government stakeholders work together to ensure public policy, laws, and regulations reflect the changing landscape of financial services and the opportunity they provide to assist and grow underserved communities.
“African Americans still don’t experience the American dream or rights and privileges the same as their white counterparts, thus impeding upward mobility for most African Americans,” U.S. Rep. and CBCI Chairman Bennie Thompson said in a PayPal release. “In the report, data and research show that Black people have on average higher unemployment rates, lower earnings, lower rates of homeownership and pay more for credit and banking services. This report provides solutions and avenues for financial wellness among African Americans. It is an excellent example of good corporate social responsibility in action.”
The paper is part of PayPal’s $530 million commitment to address economic inequality, support underserved communities and Black-owned businesses. The report was also conducted in partnership with HBCUs Dillard University and Wiley College.