Bill Bynum: HOPE for All

Jennifer Tescher:
Welcome to EMERGE Everywhere. I’m Jennifer Tescher, journalist turned financial health champion. As founder and CEO of the Financial Health Network, I’ve spent my career breaking down silos by engaging with innovators across industries, and now I’m sharing those conversations with you.

Meet the forward-thinking leaders challenging the status quo and unleashing creative new ways of improving financial health by seeing their customers, employees and communities in 3D.

Bill Bynum has spent his entire career leveraging finance and public policy to drive investment in people and communities that have been historically locked out of critical institutions; banks, schools, hospitals, housing.

Since 1994, Bill has been doing that work in the Mississippi Delta. Leading a set of three organizations under the umbrella of an enterprise called Hope; a credit union, a loan fund and a policy center.

I invited him to the podcast to bring to life the results of the Financial Health Network’s 2020 Pulse report by sharing how the national trends play out in one of the poorest regions in the country.

Bill is clear that Hope and other organizations like his simply cannot meet the full need without the leadership and partnership of both the private sector and the government. Somehow, despite the additional challenges of the pandemic, the economic downturn and a racial reckoning, Bill remains an unwavering advocate for hope in a just world.

Bill, welcome to EMERGE Everywhere.

Bill Bynum:
Thanks Jen, it’s great to see you. And appreciate you having me join today.

Jennifer Tescher:
Absolutely. Bill, you grew up in a segregated rural town in North Carolina where you attended a mostly white school because your parents wanted to make sure you got a good education.

I tend to believe that leaders who see people in 3D, who have empathy, that that comes from their lived experience. I would love for you to tell us a little bit more about your early experiences and how that shaped the man and the leader that you have become.

Bill Bynum:
It’s interesting Jen, I think we all are products of our experiences, of the lives that we lead and the journey that we continue on. I’m still, I think, evolving in many ways, and I hope I continue to.

But I was actually born in New York. My family, like many African Americans, like many black folks in the ’50s and ’60s moved North to get better opportunities, better jobs, less discrimination. And my sisters and I were all born in Manhattan, I lived in East Harlem; but in the first grade, the challenges of the city made my parents decide to move back to North Carolina.

They were from Chatham County, right outside of the Research Triangle, what is now the Research Triangle. When you get outside of the Research Triangle in North Carolina as I think you know as you’ve spent some time there, it’s very rural, it’s one of the most rural states in the country.

And I lived in a little mill town called Bynum, which was interestingly named after the people who owned my ancestors undoubtedly.

Jennifer Tescher:
Oh my.

Bill Bynum:
It had the largest cotton mill in the country at one point. Ironic that I later moved to Mississippi to work in the Delta where a lot of that cotton was grown, and then the value was extracted back in the East Coast and not necessarily value the crew to the people who put in the labor to grow that cotton.

And went to segregated schools until I was in the fifth/sixth grade. I initially went to an all-black school in the first and second grade. Education wasn’t as strong as what I had experienced at P.S. 102 in New York, and my parents decided, “We’ll let you go to an all-white school, so maybe that may be better.”
It was marginally better but not, again, not what I experienced in New York. And later the schools integrated, so I got to know kids on both sides, black kids and white kids, and eventually became a student leader and later went to the University of North Carolina at Chapel Hill.

I thought about going outside the state, Stanford was on the list, but my parents had separated and I wanted to stay around and support my mom and my sisters. And I went to UNC, got involved in student government, and I thought I was going to be a journalist until I got sidetracked by student government and this community development finance thing got my attention.

When I was young, the Klan, every Thursday night would have a meeting at a barbecue joint not a quarter mile from my house. Fortunately, they were not as active as they had been a few years before but still, it was significant. I stayed in a single wide trailer right next to my great grandmother who cooked and cleaned for many of the folks in the community.

And the kids generally didn’t carry a lot of the baggage from their parents, but some of it spilled over. I remember one night my dad and I sitting down outside with my BB gun and his rifle to ward off folks who would come by and throw rocks in our window, so that was the environment.

And later, again, kids that I went to school with, and on both sides, we developed good relationships and good friendships, and I think that has served me well through life. I saw how much we had in common, but also saw the disparities in wealth and in opportunity.

I think one of my early lessons was when my grandmother took me to the credit union that was in the garage of the vice principal’s home and was created so that people in the black community could get basic, affordable, responsible financial services because they weren’t welcome in the community bank in the town.

And so I saw how important it was for people to pool their resources together to support their neighbors. And so, again, I was able to take some lessons from that and have tried to build upon it throughout my career.

Jennifer Tescher:
So we have a few things in common, because in addition to an interest in journalism, I also was born in New York, but left there at a relatively young age and went South. I grew up in Miami. I didn’t know that, I didn’t realize that you were born in New York, that’s really interesting.

Thank you for sharing about your history, your family. The credit union piece is really interesting. Tell us how you ultimately ended up in Jackson, Mississippi and also tell us more about how you’ve built the set of organizations that you now run, known as Hope.

Bill Bynum:
I’ve been fortunate to be around really incredible change-makers all my life. When I got out of college, I planned to go to law school. I wanted to be the next Thurgood Marshall but I decided to work below a little while and I ended up at Self-Help, Center for Community Self-Help, which now is one of the largest community development financial institutions in the country.

But at that time we were looking to help businesses that were closing because the owners were relocating outside the country, cheap labor and more profits. And so we tried to help the employees buy the companies and restructure them as workaround businesses, but when we went to banks we couldn’t get our financing for these blue-collar workers, many who were women and people of color.

And so we decided to start our own financial institution with the deposit from a bake sale, First Resources and Self-Help Credit Union, which is now a multi-billion dollar national powerhouse in the community development space. But we just started because we wanted to help businesses, business owners and their workers get treated with respect.

And so, again, I saw the value of people pulling their resources together to help their neighbors. And before we knew it, we had more deposits than we had employee-owned businesses, so we expanded to women, rural, minority-owned businesses, eventually affordable housing.

I left there to go to work at the North Carolina Rural Center, where we started a microloan program. Met with Muhammad Yunus, saw the work he was doing in Bangladesh and thought that if he could be that successful in helping entrepreneurs in one of the most impoverished countries on the planet, we could certainly take some lessons and apply them across rural North Carolina; and we did and had been very successful.

And at some point, I guess it was in the early ’90s, a good friend who had moved to Mississippi to start a foundation approached me about the idea of a loan fund to help businesses in the Mississippi Delta.

I was at a point in my career where I was looking to expand my experience, and it gave me an opportunity to come and create my own, hopefully not a mess, but just to test my ability to take the lessons that I learned and apply them in a region where certainly the need was great.

A lot of effort had been put into improving conditions in the Mississippi Delta – Arkansas, Louisiana – one of the most impoverished regions in the country. And so I moved here in ’94, really thinking that… Some place that was in the backyard of President Clinton who had recently launched the Community Development Financial Institutions Fund in Treasury as a key part of his platform.

I was hopeful that some of those resources could be tapped to build on the work that we were doing. And so we had a million and a half dollar grant from The Pew Charitable Trusts, and believed that we could transform the economy in the Delta, so we took off and have been busy ever since.

Jennifer Tescher:
Bill, as you know, last week we released the results of the Financial Health Network’s annual Financial Health Pulse survey. Every year we survey a nationally representative sample of Americans to understand how their financial health has changed over the course of the year, and how financial health varies based on a variety of socioeconomic variables.

In the 2020 report, only 15% of black people and 24% of latinx people were found to be financially healthy compared to nearly 40% of whites and Asian Americans. And I don’t need to tell you, but our data shows that people in the South have lower rates of financial health than in other regions.

I was hoping to bring you on the podcast to help bring life to these statistics. Because we read them, we’re awash in data, and yet we remain unmoved. We’ve learned about the power of stories from our U.S. Financial Diaries work and you were an advisor to that work. So help paint a picture of the people of the Mississippi Delta, your customers, and their financial lives.

Bill Bynum:
Jennifer, it’s really impossible and I think quite irresponsible to look at what’s going on in people’s lives today without looking at what the situation and circumstances were prior to any of us knew what COVID was.

We’re facing a triple crisis; it’s the healthcare crisis, it’s an economic crisis and the social justice, the racial division in the country is all linked. Certainly, that’s what my experience has taught me.
If you look at the nation and where slavery was most concentrated prior to the Civil War, the Atlantic had a great map, a few months back they showed where slave-holding was greatest on the eve of the Civil War.

If you overlay that map with a map today of where you see the greatest rates of persistent poverty; not just the 30 years in a row, which is the federal definition of persistent poverty, where places have over 20% of poverty for three decades, but places where you had half a century of poverty at extraordinary levels.

And if you look at where you have the worst housing conditions or the worst education outcomes, the latest access to healthy food and produce, highest rates of unemployment, lowest wages, fewest bank branches, highest rates of people who are unbanked and underbanked, they are very much the same. And they also happen to be places where you have the most concentration of people of color, black folks particularly.

Mississippi, Alabama, Louisiana are three of the states with the highest percentages for black populations in the country. And if you think about the work that we do at Hope, I’ve really stopped talking about work as much as a community development financial institution, the financial resources, financial tools are means to address these issues.

We try to mitigate the extent to which things that people can’t control; their race, where they’re born, their gender determine the ability to climb the economic ladder. And whether it’s health, education, housing, jobs, at some point you need financial tools; and those are just abysmally absent in communities of color.
And so that’s what we exist to address at Hope. And I think we have done that, but we are very much a research and development arm of the financial system. We are one of the larger CDFIs in the country, but we are dropping the bucket relative to the need.

We’re around $600 million in assets, which is great if we were just in Jackson, or if we were just in the Mississippi Delta or Memphis or New Orleans or Birmingham or Montgomery or the Black Belt, but we’re across five states.

And so we go into places where these resources don’t exist and quite honestly, where wealth has been extracted for centuries, and where wealth accumulation among people of color has been stifled by law and by practice, since before the Civil War.

It’s really great to hear you talk about… I’ve heard you talk a lot about silos, but as I mentioned, all these opportunity ladders, health, education, housing, all tie together but they all also tie to the financial health of the people who live in these communities.

Our Policy Institute recently conducted our annual snapshot of the financial condition of the 1000+ people that we serve across the region, and we saw that a third of our members have less income than they had before the pandemic, that’s a big hit.

A quarter of our members cited that they worry about paying a debt that they owed every day, or nearly every day. 71% received a stimulus payment which underscores their need, the need for basic banking services. Nearly half were either unbanked or underbanked prior to joining our credit union. Almost 80% of our members are black. 60% are women, half of them have incomes below $30,000, $31,000.

And so we are working in a region and with people who are on the edge of the economy, and even more so since this crisis, this triple crisis that we’re facing.

And it is really critical that organizations like ours, like ones that you’ve worked with over the years and that the data that you’re pulling together are equipped to inform policy and practice of those who control resources, both at the private sector and policy in public officials as well.

Jennifer Tescher:
So in response to both the pandemic and the economic fallout from that and the racial reckoning that we’re experiencing, we’ve seen the private sector and in particular big banks making significant financial commitments to supporting low-income people and to closing the racial wealth gap.

Most recently we saw JPMorgan Chase, for instance, make a $30 billion commitment. You and I both have been engaged with the Business Roundtable as it reckons with its role in racial justice, yet there’s a reason that you are still at it at Hope. And that despite these commitments, seemingly large commitments, we still have a need for community development financial intuitions like yours in communities.

Help connect the dots, why is that? Why can’t the big powerhouse banks that have all the capital, why can’t they solve this problem?

Bill Bynum:
I think they can. I think it’s a matter of commitment, of intent, of leadership. I am encouraged by what I’ve heard from the Business Roundtable prior to COVID, they updated their statement of purpose, they asserted that the purpose of a corporation is to support an economy that works for all Americans, and I think that’s great, not just their shareholders.

I think it’s important that they recognize that and that they take that message to policymakers but that they infuse it in how they do business. My organization, I talked about how we started, I moved from North Carolina after having worked in organizations that had a good bit of philanthropic support, that had a good bit of bank support or there had been some public resources.

But one of the things that drew me to the deep South was the fact that the CEO of Walmart at that time, Rob Walton, Sam Walton’s grandson, was one of the founders that recruited me. The CEO of Entergy, which is the largest electric utility in Arkansas, Louisiana and Mississippi, was on the hiring committee.

And I really wanted to see how the private sector could align its interests with the needs of the communities that they work in and where their employers come from that they rely on for revenue. I think Walmart understood that for them to sell stuff, people had to have income to pay for it. Entergy sold more kilowatts the more businesses, the more homes there are.

And so I think that you get more traction when you can align the vested interest. Certainly, there’s profits but there’s also the realization that without people who are productive and who can support themselves and their families and their communities, you’re not going to get the results that all of us desire.

Jennifer Tescher:
This is essentially the definition of stakeholder capital, you’ve just described it in a very tangible way.

Bill Bynum:
Absolutely. And unfortunately, it’s hard to get companies to focus on that. I’ve been really encouraged that the BRT has stepped forward, members of the BRT have made pronouncements about their commitments. I think it’s really important though that we look at those commitments and make sure that it’s not just moving chairs around on the deck, but that these commitments are truly transformational, that it addresses the systemic barriers that I think more and more people acknowledge exist.

Jennifer Tescher:
I want to talk a little bit about Netflix. I know you’ve been around a long time doing excellent work for a long time, but the Netflix announcement that it was going to pledge 2% of its cash holdings to provide economic opportunity for black communities got you a lot of attention because they announced that the first $10 million was going to the Hope Credit Union.

So tell us a little bit more about how that deal came about. We’ve been sitting here talking about big banks, I’m not sure Netflix would have occurred to any of us as being a large corporation that might be one that we should be partnering with or tapping for their capital. And folks who are listening, how they and other companies can get involved.

Bill Bynum:
No, it was interesting. We had earlier, before COVID, before George Floyd, had started to take steps to restructure our balance sheet. When you work in communities like the Mississippi Delta and the Black Belt, you know that there is not enough wealth, there’s not enough savings in those communities to finance the businesses, the homes, the community facilities that enable people to prosper and to support their families and their communities.

For example, in Itta Bena where we had the Fed chair in 2019, boy, it seems like so long ago; if we had every deposit in that community, it would just be one and a quarter million dollars. Clearly not enough to offset the challenges that Delta towns face.

And so we supplement those deposits by bringing in resources from others outside of our region. And often that’s certificates of deposit, which are more costly than savings and checking accounts.

Our cost of capital is significantly higher than our peers, and so we have to supplement that by going out and raising grants in a region where you’ve got $40 per capita in philanthropic giving, compared to $4,000 in Silicon Valley, $3,000 in New York, $450 per capita U.S., $40.

So there’s just not a lot of philanthropic resources here, and neither are there bank branches making CRA investments in places like the Delta. And so we had to go to where we could to get CDs which are higher cost.
And so we had created this product that we call transformational deposits. We’re asking mission investors, social investors to make a deposit in an insured depository at 10 basis points. There’s a lot of cash in the economy now.

And so we were starting to get traction on that. And in April I think it was, April or May, got a call from Aaron Mitchell who’s in the human resources department at Netflix, who had read the cover of Money and had been talking to his colleagues at Netflix about doing more to address some of the challenges that we’re experiencing in America these days.

And he saw that with $5 billion in cash holdings, they had an opportunity to put some money into frontline institutions like black banks and credit unions that were serving people in places that traditional banks were not.

We had mutual acquaintances and I was really excited to get a call from Aaron to ask if this would be something that would be helpful. So a $10 million deposit from Netflix came out of that, or 10 basis points.

It’s a liquid deposit, it’s their deposit, it’s not a grant. And they can get their deposit when they need it, but they’ve not needed to tap their cash holdings ever. And so this is relatively stable money. And there are a lot of other companies that have cash holdings that could be used to invest in development in under-resourced communities.

The deposits are great, but as you know from your banking experience, we also need equity. And so we’ve encouraged, in addition to the deposits, many of these companies have philanthropic arms; if we had 10% of the deposit as equity, it could support our capital position but also give us money to re-invest in development in underserved communities.

Chipotle has followed with a transformational deposit. We’re having conversations with many others. We’ve had individuals who have made deposits.

While up to $250,000 is fully insured by the Full Faith And Credit U.S. Government, obviously Netflix were comfortable making a $10 million deposit. They looked under our hood and kicked the tires and felt that our management and our operations were solid.

Jennifer Tescher:
So we’ve been talking a lot about the role of the private sector, but as you know, private capital alone isn’t going to solve the enormous structural challenges facing this country.

Lay out the policy agenda for us that you think is required to address the systemic barriers to financial health and ultimately community health and success.

Bill Bynum:
I think it aligns with what we were saying that the private sector should do. We’ve got to be intentional about investing in people and places that have systemically been denied the ability to build wealth and to support their families and to be a productive citizen.

Home ownership and entrepreneurship are two of the most sure ways to close the racial wealth gap. But again, when you have such disparities in the ability to access the resources to become a home owner or an entrepreneur, then you’re not going to get the outcomes that I think we all want. And so public policy has an important role to play in that. Down payment assistance, for example, is when you have a 100:1 wealth gap, you can’t afford a down payment.

We have seen actions that undermine what you and I probably thought were settled doctrine, like the Community Reinvestment Act that requires banks to reinvest in communities, and Fair Housing laws and disparate impact that doesn’t require that you have a smoking gun to prove if you have a pattern of discriminatory practice, then banks are required to address those patterns.

But those laws and policies are under attack now. And so I think that we’ve got to see a reversal of the destruction of these critical protections in policies that help make sure that people have equitable and fair access to financial resources.

As I’ve said, I don’t look at us just as a financial institution but financial resources are critical to closing the disparities, and housing and entrepreneurship are game changers. The 10:1 wealth gap that you see between black and white households is only 3:1 for black entrepreneurs relative to white entrepreneurs. It’s not equal, where it should be, but it’s a lot better than 10:1, it’s a lot better than 100:1.

But when you’ve got 1% of SBA loans in Arkansas going to black entrepreneurs, you know there are some policy changes that need to be made. And so we need to restructure the Small Business Administration and make sure it’s more accountable to closing those gaps.

We need to look at HUD and make sure that policies protect homeowners and that resources are made available to make home ownership more accessible. We need to look at Fannie and Freddie and make sure that they’re affirmatively furthering Fair Housing provisions that drive them to make housing more accessible in rural and underserved communities is supported and not undermined.

I don’t think we have to reinvent the wheel. We know what works, we’ve seen tools that work. Unfortunately, we’ve seen some movement that undermines those critical supports. And I think we as individuals need to hold our policymakers accountable.

It’s unfortunate that it seems like every other day we’re in the middle of a new election and that divides people. I think most people will go into policy to support their communities, but we also know that as soon as you start having to distinguish yourself from your opponent and raise money, you see a lot of division.

I think it’s up to us as citizens of this country to try to get the election system to a better place and to remind policymakers that we don’t send them there to run for election again, we send them there to address the needs that we face. And boy, the needs are greater now than I think they’ve ever been.

Jennifer Tescher:
So Bill, you have been at this a long time. And as we talked about earlier, the challenges and inequities faced by the Mississippi Delta are centuries old, they’re not new challenges. But recent events have certainly shown us that light on these issues.

And the country seems to be undergoing a shift towards more understanding and appreciation of how systemic racism continues to shape the financial lives of communities of color. Is it different this time? Are you optimistic? Do you feel like we’ve got a narrow window before the country does what it has done in the past and simply move on before the work is done? How are you feeling in this moment?

Bill Bynum:
It’s funny, I’ve been asked that a few times recently and I’ve told people that I think I’m a masochistic optimist. I’ve been doing this work almost four decades, and I’ve seen what can happen when people have the tools that they need to support their families.

I know that people in the Delta, people in the Black Belt, people in Appalachia, in Indian Country, on the U.S.-Mexico border, when they have the tools they can do anything that anyone else can do, but those tools just aren’t readily available.

I’ve seen that organizations like CDFIs, community development corporations, nonprofits woefully under-resourced, can make a difference and can get people to a much better place. I’ve heard community development financial institutions, minority financial institutions talked about more in the past six months than I’ve heard them talked about in my career, and so that’s encouraging.

And so I will err on the side of optimism and do everything I can to make sure that the lessons, the voices of the people in the communities that I work are brought to the decision-makers, whoever I can get an audience with, and make sure they know the data that you shared about the financial lives and the information that we get from our member owners, and remind them that that’s who…

They were sent to Washington and to statehouses to serve, that’s who businesses depend on to support their shareholders and to generate profits. And if we’re going to do it in a sustainable way, it’s got to be done in a more respectful way that helps everyone succeed and not just a few, a privileged few.

Jennifer Tescher:
Bill, thank you for your ongoing leadership and thanks for joining us on EMERGE Everywhere.

Bill Bynum:
No, thank you for what you’re doing. It was a pleasure to talk with you.

Jennifer Tescher:
This has been EMERGE Everywhere, a financial health network production. I’m Jennifer Tescher and I’d love to hear your ideas for future guests and your reactions to the show. You can connect with me on Twitter @jentescher. If you liked this episode, please review the show and subscribe wherever you get your podcasts. To learn more about the work and research we do, please visit emerge.finhealthnetwork.org. See you next time.