New Administration Should Focus on Consumer Protection

Capitol Weekly
By Sharon Velasquez

According to the U.S. Department of Commerce, California today ranks as the 5th largest economy in the world, surpassing the United Kingdom. To flourish, great economies like California’s need consumer protections and oversight of financial markets. California has one single state agency charged with both, the Department of Business Oversight

Given the Trump administration’s rollback of consumer protections and enforcement at the federal level and California’s influence in shaping national policy, the DBO is essential in protecting California’s consumers.

Despite its crucial role, DBO remains one of the least known agencies in the entire country. With over 360,000 lenders and 40 million consumers under its purview, California would only benefit if the DBO had more support and resources to fund its work.

To our future governor, consumer advocates respectfully request that you prioritize consumer protections and the DBO to ensure financial prosperity for all Californians.

So, what exactly is the DBO, who does it regulate and why is it important?

What is known today as the Department of Business Oversight (DBO) came to life in 2013 when Gov. Jerry Brown merged the state Department of Corporations and the Department of Financial Institutions. He combined these 100-year-old departments to increase efficiency and cost effectiveness; to honor their original missions both became divisions within the DBO.

The DBO is led by Commissioner Jan Owen, appointed by the governor and approved by the state Senate.

All consumers, but especially consumers of color, need a vigilant consumer watchdog in order to fully and fairly participate in California’s prosperous economy.

For instance, studies show that people of color still face redlining in the mortgage market, racism in small business lending, credit card redlining, and other barriers to credit. At a time when the Trump administration has scaled back federal fair lending enforcement and investigations into predatory practices. California needs to stand strong in advancing a sound and inclusive economy.

The DBO staff of 641 has oversight of over 360,000 lenders and 40 million consumers, with a budget of about $90 million per year.  In its consumer protection capacity, the DBO oversees, and regulates institutions including banks, credit unions, savings associations, trust companies, securities brokers and dealers, and commercial and consumer lenders such as mortgage lenders, payday, and online lenders  — commonly referred to as financial technology, or FinTech, lenders.

The DBO’s oversight of FinTech is particularly important because the federal government has failed to issue responsible regulations that ensure transparency and address algorithmic redlining, among other harmful business practices. Algorithmic redlining can be defined as the systemic denial of products and services by machines replicating the biases of their human creators. Instead, the federal government has given FinTech companies the option of an OCC charter that circumvents state-level consumer protections.

This doesn’t mean that all online lenders are bad. For instance, several publicly endorsed and even informed the Small Business Borrowers’ Bill of Rights and were leaders in passing SB 1235, the nation’s first small business truth-in-lending law, through the California legislature.

More industry leadership is needed, DBO regulation and oversight remain necessary to shed light on lending practices across the industry. To quote Justice Louis Brandeis, “Sunlight is said to be the best disinfectant; electric light the most efficient policeman.”

In terms of consumer protection, the DBO ranks second in importance only to California’s attorney general.  In similar fashion to the federal consumer watchdog, the Consumer Financial Protection Bureau (now being gutted by the Trump administration), the DBO provides financial education and alerts to consumers, as well as a complaint database where consumers can report harmful financial practices so these can be investigated. As a mini-CFPB, the DBO also pursues enforcement actions against abusive lenders.

How can our next governor support the DBO? By taking the lead on increasing the DBO’s budget, increasing enforcement resources, supporting the hiring of more analysts and investigators, investing in DBO staff, providing the technology for the DBO to evaluate FinTech algorithms, bolstering the DBO’s regulatory power, and amending the California Financial Code to clarify the DBO’s mission as a consumer protector.

The Trump Administration has made its disinterest in consumer protection clear. CFPB Acting Director Mick Mulvaney has openly expressed that he will move the CFPB less aggressively in enforcement matters and will leave matters to the state regulators and attorneys general. Now more than ever, working families look towards their state leadership to step in and protect consumers when the federal government can’t or won’t.

OCC Should Improve CRA, Not Gut It

American Banker
By Orson Aguilar and Kat Taylor

With little outreach to redlined communities still left behind by Wall Street, the Trump administration recently proposed changes to the Community Reinvestment Act, a law that was intended to fix the problems caused by redlining. But these changes could further marginalize our most underserved communities.

Redlining is not ancient history. Recent investigations by Reveal show that it never completely went away, and these historically underserved areas continue to fall behind in racial and economic-equity indicators. We know a lot about why this is happening: Financial institutions continue closing branches at a rapid rate, home lending to low-income borrowers and people of color lags behind their share of the population, small businesses in these communities struggle to access affordable capital and few resources are being put toward affordable housing development.

Like many laws, CRA could be improved. But it has been an important antidote to redlining and played a critical role in increasing access to fair credit for all. And now we as advocates and bankers serving the public interest have the opportunity to make it better, with the Office of the Comptroller of the Currency’s advance notice of proposed rulemaking.

There are three areas that raise particular concern regarding the needs of communities of color and low-income communities. We believe we can work together with the OCC to create solutions.

First, the OCC suggests combining the existing three-pronged CRA exam that grades banks on their lending, investments and services into a single metric: a ratio of a bank’s community investments divided by the bank’s assets. This single calculation would lump all of a bank’s CRA-eligible activity together. This one-size-fits-all approach may be simpler but could de-incentivize banks from making meaningful investments in particularly underserved communities and from responding to the specific, local needs of assessment areas.

In the real world, one-size-fits-all often fits no one.

The OCC also raises questions about expanding the definition of CRA-qualifying activity to include services that banks provide but that don’t address the lending needs of historically redlined communities. Giving banks CRA credit for services they already provide — such as financial education, technical assistance to small businesses or apprenticeship programs — decreases resources they should be allocating toward traditional CRA activities. Banks should increase the dollar amount of community investments in things like broadband expansion, affordable housing, accessible mortgage products for low- to moderate-income borrowers and small-business loans — and the law should encourage this, not undercut it.

A third piece of the notice seeks to redefine assessment areas. This is a direct response to pressure from banks who want CRA credit for investments they make outside of their assessment areas, relieving them of the commitment to serve their community. While the changing banking industry and emergence of fintech highlight the need to expand CRA oversight beyond physical branches — which are critical to meet the credit needs of low- and moderate-income communities and communities of color — we still need to keep the focus on low-income individuals. This issue is complex because we also know that banks make good loans outside of CRA assessment areas (which is why it is important to look at the actual loan itself, what it is doing and who it is for — not only where the loan is made). The goal here should be to give banks credit for good community development loans outside of their assessment areas, but not to incentivize them to make this a priority.

CRA must be improved. It could and should be adjusted to provide increased transparency and quantitative measures, but not at the expense of greater bank accountability. This is particularly salient for underserved communities in non-metropolitan areas, such as neighborhoods in California’s Central Valley, where branch closures and low levels of lending to people of color and low-income communities have made households susceptible to predatory lenders. In some areas, nonbanks have actually become the leading lenders.

As it stands, CRA has a major shortcoming: Redlining is based on race, yet this critical anti-redlining law has no racial lens. You simply cannot adequately remedy decades of race-based disinvestment without using race-based criteria. The law could also focus more specifically on lending to low- and moderate-income borrowers, not just geographical territories. And ratings should take into account activities that harm low- and moderate-income borrowers and communities of color.

The notice from the OCC represents a crucial opportunity. Both community advocates and banks can and should weigh in to help build a stronger, more effective CRA and resist changes that would dilute it. An updated regulatory framework must account for structural inequalities the law was meant to address, something that does not require a trade-off with modernizing the regulatory regime. And we need not just carrots but a real stick in the form of penalties when banks and other financial institutions neglect their responsibilities or engage in discriminatory or criminal activity.

While much in the OCC’s initial draft raises concerns, there is an opportunity to take a good but incomplete law and make it better. Improvements to the CRA can only emerge from a process based on genuine engagement with the communities most impacted by our unbalanced economy, and the OCC’s effort falls short.

This Bill Could Make Predatory Lending Worse. Gov. Brown Must Veto It

Sacramento Bee
By Orson Aguilar

Legislators had a chance to protect Californians from predatory lenders, but instead sent a special-interest bill to the governor that threatens to expand the damage.

Gov. Jerry Brown should veto Assembly Bill 237 promptly.

AB 237 expands the use of unlicensed and unregulated brokers, called “finders,” who are allowed to operate under the Small Dollar Pilot Program, which is aimed at helping people repair or build credit with loans for small amounts.

The bill expands the program from loans of $2,500 up to $7,500 and allows for using finders for these larger loans. It has been pushed by just one company, INSIKT, whose business model relies on finders.

But finders have not worked out as originally hoped. Legislators originally thought finders would be credit unions or community banks that refer borrowers to the pilot loan program if they do not qualify for a lower cost loan.

In fact, most finders are check cashing stores, grocery stores and even payday lenders. We worry that through these finders, payday lenders can sell borrowers loans that carry triple-digit interest rates. These sorts of loans do not help people build credit. Instead they trap people in a cycle of debt.

The sponsor of this bill could offer lower-cost loans today just by using licensed brokers instead of unlicensed finders, but has chosen not to.

Instead of AB 237, California should catch up with 28 other states and set an interest rate cap for loans above $2,500.

More than 100 civil rights and faith-based organizations across the state rallied behind AB 2500, a bill to limit interest rates at 36 percent for loans from $2,500 to $5,000. The payday lending industry spent more than $1.5 million lobbying against this bill,and it failed to get through the Assembly, essentially kicking this issue down the road for the second time in two years. The predatory lenders won.

For years, Californians most hurt by predatory lending have asked the Legislature to rein in high-cost, abusive loans. And every year the same thing happens: Legislators side with predatory lenders.

If AB 237 becomes law, it will only benefit Wall Street hedge funds making loans under a pilot program that has insufficient protections against abuse. The governor should veto this bad bill, and next year legislators should get to work on real reforms.

If Democrats Run From ‘Identity Politics,’ They’ll Lose

The Miami Herald
By Orson Aguilar

We keep seeing political pundits condemning Democrats and progressives for embracing “identity politics.” This, they argue, alienates working class whites and the (largely mythical) “centrist swing voter.” They’re wrong.

Consider the screed written last November by the Washington Post’s Ed Rogers, blasting the “Democrats’ need to wallow in identity politics.” Or a piece from July by Bret Stephens of the New York Times, in which he speculated that President Donald Trump might be reelected in 2020 by mocking the Democrats’ allegedly excessive focus on things like “gender-neutral pronouns and bathrooms.”

Commentators like these urge Democrats to not talk about the specific concerns of African Americans, Latinos, Asian Americans, women, immigrants or LGBTQ people, and focus instead of the issues that matter to working class whites — things like jobs and financial security.

But the U.S. working class actually has a higher percentage of people of color than our population overall. And black and Latino household income and wealth still lag well behind whites — gaps that didn’t arise by chance.

You can’t address “good jobs and higher wages” for millions of economically struggling Americans if you ignore ongoing redlining and discrimination — including a criminal justice system that disproportionately saddles Americans of color with criminal records that crush job prospects, often for life. It’s fundamentally misleading to call such basic problem-solving “identity politics.”

The real “identity politics” comes from the right, tracing back to Richard Nixon’s 1968 southern strategy, which welcomed prominent segregationists like Strom Thurmond. More recently, Fox News has peddled feverish nonsense about the tiny New Black Panther Party, “illegal immigrants” and more.

Trump has turned racial dog whistles into fire alarms. From spreading hysteria about MS-13 to making dishonest claims that football players who kneel during the national anthem “don’t respect the flag,” the president has aggressively pushed the most divisive form of identity politics: white identity politics.

Many black, brown and young voters turned out for Barack Obama in 2008 and 2012 but stayed home in 2016. As Steve Phillips has noted, the Democrats’ “see no racism, say no racism” strategy is likely to keep those voters at home, as in the election that brought Trump to power.

As the Pew Research Center reported, black turnout tanked in 2016, dropping seven percentage points from 2012. And while Latino turnout dipped only marginally, Hillary Clinton’s share of Latino votes dropped five points compared to Obama in 2012 — even though her opponent literally called Mexican immigrants “rapists.”

If Democrats want to win, they can’t tiptoe around race. As the record Florida primary turnout for Andrew Gillum showed, millions of new and occasional voters stand ready to support candidates who call out the discrimination at the heart of Trump’s policies and show they’ll fight it.

Sen. Harris’ Bill Offers Relief for Struggling Renters

San Francisco Chronicle
By Orson Aguilar

California and much of the country face a housing affordability crisis that’s having a particularly devastating effect on renters. Finally, we have a chance at real relief, thanks to legislation introduced by Sen. Kamala Harris, D-Calif.

In California, we’re most familiar with the affordability crisis in the Bay Area and Los Angeles, but it affects many other areas of the state as well. Recently, the National Low Income Housing Coalition reported that on average a Californian needs to make $32.68 an hour to afford a two-bedroom apartment. The state’s minimum wage is $11 an hour

But it’s not just a California issue. In more than one-third of states, you need to make more than $20 an hour to afford a two-bedroom apartment. More than just a San Francisco problem, this is also a Fort Lauderdale, Fla., problem and a Denver problem and a Minneapolis problem.

And the housing crisis doesn’t just hurt families. In too many areas, businesses and nonprofits — including the one where I work — find it increasingly hard to recruit talented staff because the cost of housing has become prohibitive.

Excessive rent burdens all families, but it falls most heavily on Americans of color. The percentage of families who rent has gone up for all ethnic groups since the 2008 housing crash, but is highest for blacks and Latinos. Those groups were explicitly targeted by predatory lenders in the lead-up to the Great Recession, leading to enormous transfers of wealth out of black and Latino households and turning millions of people from homeowners into renters. America’s long history of redlining (where financial institutions refuse to lend in certain neighborhoods and to certain racial groups, and which continues today in new forms) has skewed homeownership toward whites.

Homeownership remains stubbornly out of reach for many. How can a family ever save for a down payment if half the household income goes to pay the rent each month? Skyrocketing rents effectively shut the door to ever owning your own home.

We need more housing that’s affordable for working families, and we are seeing more local responses designed to lower construction costs and invest in housing as basic economic infrastructure. That push must move forward aggressively. But even in the best-case scenario, those efforts will take years to make a dent in our affordability crisis. Renters urgently need relief now.

Sen. Harris, joined by California Sen. Dianne Feinstein along with Democratic Sens. Richard Blumenthal of Connecticut and Maggie Hassan of New Hampshire, has introduced federal legislation that can provide fast, desperately needed relief for tenants being crushed by sky-high rents. The Rent Relief Act would create a refundable tax credit that would be available to individuals making less than $100,000 per year who live in rental housing and spend more than 30 percent of their gross income for the taxable year on their rent (including utilities).

Supported by elected officials up and down California as well as a wide variety of organizations working on behalf of low- and moderate-income families, the Rent Relief Act would give quick help to those who need it most.

It also represents simple fairness.

Last year, Congress and the president gave huge tax relief to America’s wealthiest corporations. And the federal tax system has long subsidized homeownership through the home mortgage interest deduction — 80 percent of which goes to households making $100,000 or more a year. It’s time the “little guy” got a similar break, and the Rent Relief Act takes a big step in that direction.

If you live in California, please tell Sens. Harris and Feinstein you support this important legislation. If you (or your friends or relatives) live in a state whose senators haven’t yet signed on in support, please urge them to do so right away. It’s simple: Just call the U.S. Capitol Switchboard at 202-224-3121. Providing real rent relief to working families isn’t hard; it just takes political will.

Orson Aguilar is president of the Greenlining Institute.

 

Jobs and Justice: Civil Rights and the Racial Wealth Gap

Small Business Exchange Online
By Danielle Beavers

I have the exciting job of leading Greenlining’s Diversity and Inclusion initiative. We seek to reframe the narrative on diversity to focus on justice and its role in ending the racial wealth gap once and for all.

In this year of Greenlining’s 25 anniversary, it’s important to take stock of where we’ve been to better inform where we want to go.

The truth is that Greenlining’s been doing “diversity and inclusion” work since the 1980s, when we were just a coalition of community activists. Ortensia Lopez, one of Greenlining’s founding mothers, explains it best: “We decided to form an organization focused on all multicultural communities, to work together and exert power. We felt it was important for different communities to work together: Rather than fighting each other for a slice of the pie – or for crumbs, which was often all we got – we’d work together to make the pie bigger for everyone.”

As the organization evolved over time we took those values of diversity and inclusion and operationalized them into policies to make meaningful impact for our communities and close the racial wealth gap. We started with supplier diversity in energy and telecommunications. The California Public Utilities Commission’s General Order 156 mandates that the state’s big utilities (think PG&E, Verizon, etc.) must disclose their level of contracting with minority-,women-, disabled veteran-, and LGBT-owned companies.

WHEN CIVIL RIGHTS MEANS JOBS
It sounds simple, but we quickly found out that what gets measured gets done. In 1986 women- and minority-owned companies received just $2.6 million in contracts from these huge companies; in 2016, thanks to the transparency required by GO 156, that number rose to $8.8 billion, without a single quota or set-aside. That represents a massive boost for diverse-owned businesses, enabling them to expand, hire more workers, and help close the racial wealth gap.

In 2012 we built off the success of GO 156 and sponsored AB 53, legislation which created similar public reporting requirements for insurance companies in California. Four years later that expanded into the Multistate Insurance Diversity Survey, including California, the District of Columbia, Minnesota, New York, Oregon, and Washington (combined these states represent 65 percent of the national insurance market). In 2016, insurance companies in these states spent $7.9 billion with diverse suppliers.

We’ve also advanced supplier diversity through partnership. In 2012 we started working with the newly established federal Offices of Minority and Women Inclusion at 20 of the nation’s financial regulatory agencies to diversify the financial industry. In 2014 we partnered with California’s largest depository banks to release the nation’s first report that compared banks against one another on their level of contracting with diverse businesses.

In parallel with supplier diversity, Greenlining also advances workforce diversity policies. Our Health Equity team has a long history making the case for diverse health workforces and pipeline programs that bring young people of color into health careers. We’ve also turned our attention to Silicon Valley and last year shook up the tech world with a No Uber Oakland campaign, with specific demands on employment practices, when the company announced a move to downtown Oakland (it eventually pulled out).

CORPORATIONS, FOUNDATIONS AND DIVERSITY
Corporate America remains a critical front in the struggle for civil rights, and we continue to hold corporations’ feet to the fire in a variety of fields: Last month we released a corporate board diversity report examining California’s 59 most influential companies.

It hasn’t all been sunshine and rainbows. In 2007, after our research showed that major foundations gave only a tiny percentage of grants to people of color-led nonprofits, Greenlining touched the third rail of the nonprofit world and sponsored a bill to mandate diversity reporting from California’s largest foundations. AB 624 would have required foundations with assets over $250 million to report on their governance and domestic grantmaking. Notice that I wrote would have. We received tremendous pushback, including a hit in which the author called us “shakedown artists”– a badge I wear with honor– and eventually we came to an agreement with 10 of the most powerful foundations to sign a multimillion dollar pledge, and the major commitments were indeed fulfilled.

Greenlining has always viewed economic justice as a critical component of civil rights. Over the past 25 years it became clear that our diversity and inclusion work served as the connective thread, and in 2016 we decided to make diversity and inclusion a formal initiative. This allows us to de-silo, share best practices across industries, and make the implicit explicit.

We sometimes forget, but the racial wealth gap and access to jobs always formed a key part of the civil rights struggle, dating back to Martin Luther King’s 1963 March on Washington for Jobs and Freedom. Our recently-launched Diversity, Equity and Inclusion Framework marks the beginning of the next phase of our efforts to make economic justice a reality for all, and turn the racial wealth gap into a distant memory.

California Leads the Fight Against Trump

The Progressive
By Orson Aguilar

At the beginning of May, California, joined by 16 other states and the District of Columbia, sued the Trump administration over its attack on auto fuel efficiency standards. It was just the latest in a long list of California lawsuits against the administration. For people wondering why the Golden State fights Trump so much, I have a simple answer:

We’re fighting for you.

California’s actions focus on values we care about, and standing up for those values will make life better and safer for every American.

For decades, California has led the fight for clean air, creating standards that have helped save the lungs of all Americans. Rolling back fuel-economy mandates will increase air pollution and accelerate climate change, raising everyone’s exposure to ruinous storms, floods and droughts, from the Rocky Mountains to Texas and Puerto Rico.

But this goes far beyond the environment. Led by state Attorney General Xavier Becerra, California—followed by the NAACP and a large group of other states—has also sued to keep the administration from distorting the 2020 Census by adding a new question about citizenship.

Many experts, including six former Census Bureau directors, believe such a question will discourage immigrants from responding, as stepped-up raids spread fear in immigrant communities.

The Census is not some abstract exercise. Census data is used to shape everything from congressional and legislative districts to where federal funds go. Whatever state you live in, the dollars your community receives for transportation, health care, school lunches, unemployment insurance, assistance for rural areas and much more, depends on Census data.

Much of this money goes to programs that help poor and working-class Americans, who will suffer most from an undercount.

California’s protections will create a model for the whole country and send ripples nationwide.

Another battle lawsuit involves the administration’s effort to force California and other states to assist in enforcing federal immigration laws by withholding funding from so-called “sanctuary cities” whose police don’t actively join in immigration enforcement. The state of California sued the Trump administration over this issue last year, and the administration is now suing back.

A study last year examining county-level data found that “crime is statistically significantly lower in sanctuary counties compared to non-sanctuary counties.” Many police chiefs support sanctuary policies, knowing that forcing local cops to enforce federal immigration laws makes immigrants fearful of talking to police, hurting their ability to solve and prevent crimes.

Beyond the courts, California’s legislature is moving ahead with net neutrality legislation to counter rollbacks of federal protections. In plain English, net neutrality means you get to pick what websites or information you want to access with whatever device you choose, without your internet provider playing favorites. Without such rules, corporations can create “fast lanes” for content they prefer or for those who can afford to pay extra. (Comcast, for example, could do this for shows from NBC, which it owns.)

California’s protections will create a model for the whole country and send ripples nationwide.

All of these issues involve fundamental American principles like fairness, public health and safety—all under threat from the Trump administration. California is fighting for us all.

Orson Aguilar is president of The Greenlining Institute, based in Oakland, California. This column was written for the Progressive Media Project, which is run by The Progressive magazine, and distributed by Tribune News Service.

California Leads the Fight Against Trump

The Progressive
By Orson Aguilar

At the beginning of May, California, joined by 16 other states and the District of Columbia, sued the Trump administration over its attack on auto fuel efficiency standards. It was just the latest in a long list of California lawsuits against the administration. For people wondering why the Golden State fights Trump so much, I have a simple answer:

We’re fighting for you.

California’s actions focus on values we care about, and standing up for those values will make life better and safer for every American.

For decades, California has led the fight for clean air, creating standards that have helped save the lungs of all Americans. Rolling back fuel-economy mandates will increase air pollution and accelerate climate change, raising everyone’s exposure to ruinous storms, floods and droughts, from the Rocky Mountains to Texas and Puerto Rico.

But this goes far beyond the environment. Led by state Attorney General Xavier Becerra, California—followed by the NAACP and a large group of other states—has also sued to keep the administration from distorting the 2020 Census by adding a new question about citizenship.

Many experts, including six former Census Bureau directors, believe such a question will discourage immigrants from responding, as stepped-up raids spread fear in immigrant communities.

The Census is not some abstract exercise. Census data is used to shape everything from congressional and legislative districts to where federal funds go. Whatever state you live in, the dollars your community receives for transportation, health care, school lunches, unemployment insurance, assistance for rural areas and much more, depends on Census data.

Much of this money goes to programs that help poor and working-class Americans, who will suffer most from an undercount.

Another battle lawsuit involves the administration’s effort to force California and other states to assist in enforcing federal immigration laws by withholding funding from so-called “sanctuary cities” whose police don’t actively join in immigration enforcement. The state of California sued the Trump administration over this issue last year, and the administration is now suing back.

A study last year examining county-level data found that “crime is statistically significantly lower in sanctuary counties compared to non-sanctuary counties.” Many police chiefs support sanctuary policies, knowing that forcing local cops to enforce federal immigration laws makes immigrants fearful of talking to police, hurting their ability to solve and prevent crimes.

Beyond the courts, California’s legislature is moving ahead with net neutrality legislation to counter rollbacks of federal protections. In plain English, net neutrality means you get to pick what websites or information you want to access with whatever device you choose, without your internet provider playing favorites. Without such rules, corporations can create “fast lanes” for content they prefer or for those who can afford to pay extra. (Comcast, for example, could do this for shows from NBC, which it owns.)

California’s protections will create a model for the whole country and send ripples nationwide.

All of these issues involve fundamental American principles like fairness, public health and safety—all under threat from the Trump administration. California is fighting for us all.

The Business Case for Diversity Leaves Little Room for Our Hearts and Minds

Common Dreams
By Danielle Beavers

Narratives are critical to building movements. They provide the “why” that helps us understand issues and take action to right wrongs. For Black Lives Matter, “the why” is combating the anti-Blackness that leads to death at the hands of cops. For the #MeToo movement, it’s ending sexual harassment and assault.

I’ve written before on why we must rethink and reclaim racial diversity’s “why” for it to become a vehicle for justice. Our movement needs to develop a new, more compelling frame.

While “the business case” for diversity—the argument that diverse groups are more efficient and good for a company’s bottom line—may be true, it’s uninspiring. I say this with some humility, since my own organization has made this argument in the past. Sure, we’ve seen the needle move in some spaces, but the truth is it hasn’t compelled America’s major institutions to make the changes our people need. It’s time to evolve.

The business case for diversity keeps the focus, the “why,” on corporations and institutions. In this dynamic, efforts to diversify the workforce serve organizational efficiency, not people of color. Yes, diversity has real advantages to corporations, and it does make business sense. What’s problematic is historically marginalized people having to make the case for our humanity. Despite an increase in educational attainment and the impending demographic revolution, we continue to be redlined out of the job market and the racial wealth gap continues to widen. Diversity’s “why” must always serve people of color, and it must be used to increase our access to jobs and economic opportunity.

True, corporations aren’t legally bound to rectify racial inequities. That’s exactly why the public can’t leave it to them alone or limit ourselves to advocating within the business community’s comfort level. We must be willing to talk about subjects that are uncomfortable, including the business community’s role in tolerating and propagating discrimination.

The business case may want our bodies, but it leaves little room for our hearts and minds.

Colin Kaepernick, former quarterback for the San Francisco 49ers, serves as a great example of this dynamic. The NFL valued him to the tune of $126 million for winning games, but things quickly changed once he started the #TakeAKnee movement to protest police violence. Eight months after his first demonstration he found himself without a team and continues to be unsigned, despite his high ratings. This is where the difference between diversity and inclusion becomes critical. Diversity speaks to numbers, while inclusion forms culture and how it supports, or doesn’t support, people of a shared identity.

People of color and our allies must be explicit and uncompromising in demanding access to economic opportunity. Civil rights leaders did this by fighting for access to education, the workplace, and contracts. We must reclaim diversity’s radical origins and advance a narrative that first and foremost serves people of color, not businesses. We must use our “why” to fight for policies that hold corporations accountable and change the structures that limit our potential.

In the words of Dr. Martin Luther King Jr., “…while it may be true that morality cannot be legislated, behavior can be regulated. It may be true that the law cannot change the heart, but it can restrain the heartless. It may be true that the law cannot make a man love me, but it can keep him from lynching me and I think that is pretty important, also.” Corporations will only be as good as we make them be. We must harness our collective power through relentless, unapologetic activism.

The Business Case for Diversity Leaves Little Room for Our Hearts and Minds

Common Dreams
By Danielle Beavers

Narratives are critical to building movements. They provide the “why” that helps us understand issues and take action to right wrongs. For Black Lives Matter, “the why” is combating the anti-Blackness that leads to death at the hands of cops. For the #MeToo movement, it’s ending sexual harassment and assault.

I’ve written before on why we must rethink and reclaim racial diversity’s “why” for it to become a vehicle for justice. Our movement needs to develop a new, more compelling frame.

While “the business case” for diversity—the argument that diverse groups are more efficient and good for a company’s bottom line—may be true, it’s uninspiring. I say this with some humility, since my own organization has made this argument in the past. Sure, we’ve seen the needle move in some spaces, but the truth is it hasn’t compelled America’s major institutions to make the changes our people need. It’s time to evolve.

The business case for diversity keeps the focus, the “why,” on corporations and institutions. In this dynamic, efforts to diversify the workforce serve organizational efficiency, not people of color. Yes, diversity has real advantages to corporations, and it does make business sense. What’s problematic is historically marginalized people having to make the case for our humanity. Despite an increase in educational attainment and the impending demographic revolution, we continue to be redlined out of the job market and the racial wealth gap continues to widen. Diversity’s “why” must always serve people of color, and it must be used to increase our access to jobs and economic opportunity.

True, corporations aren’t legally bound to rectify racial inequities. That’s exactly why the public can’t leave it to them alone or limit ourselves to advocating within the business community’s comfort level. We must be willing to talk about subjects that are uncomfortable, including the business community’s role in tolerating and propagating discrimination.

The business case may want our bodies, but it leaves little room for our hearts and minds.

Colin Kaepernick, former quarterback for the San Francisco 49ers, serves as a great example of this dynamic. The NFL valued him to the tune of  $126 million for winning games, but things quickly changed once he started the #TakeAKnee movement to protest police violence. Eight months after his first demonstration he found himself without a team and continues to be unsigned, despite his high ratings. This is where the difference between diversity and inclusion becomes critical. Diversity speaks to numbers, while inclusion forms culture and how it supports, or doesn’t support, people of a shared identity.

People of color and our allies must be explicit and uncompromising in demanding access to economic opportunity. Civil rights leaders did this by fighting for access to education, the workplace, and contracts. We must reclaim diversity’s radical origins and advance a narrative that first and foremost serves people of color, not businesses. We must use our “why” to fight for policies that hold corporations accountable and change the structures that limit our potential.

In the words of Dr. Martin Luther King Jr., “…while it may be true that morality cannot be legislated, behavior can be regulated. It may be true that the law cannot change the heart, but it can restrain the heartless. It may be true that the law cannot make a man love me, but it can keep him from lynching me and I think that is pretty important, also.” Corporations will only be as good as we make them be. We must harness our collective power through relentless, unapologetic activism.