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Melissa Harris-Perry: This is The Takeaway. I'm Melissa Harris-Perry. According to the Federal Reserve, the typical white household holds more than 10 times the wealth of a typical Black and Latino household. In recent decades, this racial wealth gap has worsened rather than improved. Historic racial and economic injustices are important in understanding this inequality, but so too are some ongoing practices in the American financial sector.

Emily Flitter: Hi, I am Emily Flitter, author of The White Wall: How Big Finance Bankrupts Black America and a Finance Reporter for the New York Times.

Melissa Harris-Perry: The White Wall tells the story of how the financial industry fosters the racial wealth gap and it does so with clear and compelling evidence.

Emily Flitter: It was almost the white-collar version of somebody filming police brutality. That was what really allowed me. That was a big breakthrough. It allowed me to write a story and say what happened without this doubt that accompanies so many of these cases.

Melissa Harris-Perry: Flitter tells the story of Ricardo Peters, a former JP Morgan Chase employee who recorded what was happening to him at the bank.

Emily Flitter: In Ricardo's case, he is a Black financial advisor who was working for JP Morgan Chase and he was in Arizona and he wanted to advance in his career and his boss kept putting him off. He started recording his boss and then he ended up recording a conversation where he came to his boss with a client who had recently received a large settlement check. Her son had died and there was some issue that the municipality that she was living in or where her son died, settled with her and they gave her a check for almost $400,000. Ricardo came to his boss and said, ''I can prove to you that I deserve a promotion. Look at the client I just brought in.''

His boss said basically this person doesn't deserve our services because she didn't earn the money. He also said she's from Section 8 which is a pretty clear reference to a racial, it's a representation of a racial slur. The woman was Black. Ricardo recorded all this and he also complained about being discriminated against. Instead of investigating his complaint, JP Morgan really gaslit him and said that he had done something wrong and eventually pushed him out and fired him. That's the story that I wrote and that is the tiniest hint at what really goes on in institutions of all size in the financial industry where Black people are still treated just totally differently and way worse as employees, as customers.

When they try to raise an alarm about it, this kind of thing happens to them.

Melissa Harris-Perry: This is about the multiple touchpoints between banks and communities, so both Black folks experience as customers, Black folks experience as employees and then Black communities experience as, or experiences as either potential sites for investment or being ignored for the possibility of investment.

Emily Flitter: Absolutely. The reason that the book is called The White Wall is because these components that you mentioned add up to a solid barrier. My attempt in examining this was to take the barrier apart and look at the individual bricks. Each chapter in the book is a brick in the wall. You have bank customers who walk into a bank and are immediately at risk of being racially profiled. You have employees who not only can't get justice when they complain but actually often get pushed out. You have the insurance industry where Black customers can't, sometimes can't get the same insurance because as you mentioned, Black communities are often seen as devalued.

Properties are lower, property values and the opportunities for investment aren't there in the eyes of the traditional financial industry. If you're an insurer, you're not going to commit a lot of money to the-- Even if it's your business, you're not going to pledge a lot of money to restore something that goes wrong in these communities. Then I also found that Black insurance customers have a really hard time getting claims that they try to make paid out. That's a huge component of building and preserving wealth is insurance. If you pay regularly for an insurance policy and then when something goes wrong, you can't get that money back, that's a huge loss.

Then there's businesses who can't get loans and there's also the perpetuation of this inequality through data and AI which is seen as this clean and neutral force but is actually just computer programs made up of all of these other injustices that I mentioned.

Melissa Harris-Perry: All right, say a little bit more about the AI point because I do think there are many who think that going to more automated systems that use a more presumably meritorious or even scale for assessing anything from a community for investment to a customer would take care of these biases that we so often see in human interactions.

Emily Flitter: It's a thought that makes sense in the abstract. The problem is-- There are many problems, what is the source of your data that you're feeding into these machines and teaching them how to make decisions. If it's the real world, the real world has so much bias in it that the machines are going to learn to behave the way the real world is. In addition to that, the banks and other big financial companies that use AI aren't transparent in what they're doing in the specific programs, how they work, what the data is. No one can really test or check what is happening when they rely on these programs. That means that people might be getting discriminated against and not even realize it.

The other issue is that culturally, the designers of these programs don't always prioritize solving this problem. That's a huge change that we as human beings can make. So far though, the voices that have been trying to raise awareness about this have been put down.

Melissa Harris-Perry: Back in a moment with more. As we continue our conversation with Emily Flitter, author of The White Wall.

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Melissa Harris-Perry: We're back and we're still talking about how continuing practices of the financial industry are implicated in the continuing racial wealth gap. Now, when looking for solutions to the racial wealth gap, it's typical to find advice to individuals about improving their personal financial literacy. Emily Flitter's new book, The White Wall, explains why this itemized approach will not address continuing practices and structures embedded in the American financial sector. What are we getting wrong when we talk about the solutions by talking about financial literacy for the end user?

Emily Flitter: I want to answer that question first by telling you a story. This story isn't in my book. When I started to report on racism in the financial industry, a woman who runs her personal-- I think it's a non-profit actually, that helps promote Black fashion designers reached out to me and she said, "I'd really like to include you on a panel of financial experts who are going to talk to my members about how they can basically do better in being small business owners in the fashion industry." I was on a panel and she and the other two people on the panel were experts in community development and studying the racial wealth gap.

I actually had the least amount of expertise on the panel and was really deferring to the other two members. The woman asked us all a question. She said, ''Whenever I apply for a job and I get rejected, I always go to the hiring manager and say, what did I do wrong and what could I do better next time I interview?'' Not for you, but just in general. I really like getting that feedback. I find it to be very important. Do you think that the problem is that we just aren't asking banks what we did wrong when we got rejected from a loan? Should we just be treating this like a job application and just getting banks to tell us what we can do better next time?

There was complete silence from the three of us. I wanted the other two panelists to answer first, and it seemed like all of us were just frozen. Finally, we all basically said the same thing, we were like, it's not you, it's the banks. To answer your question about why this always ends up as a discussion of financial literacy, this is basically gaslighting. I'm not saying that it doesn't help for people to learn about how to manage their money but the people who aren't faced with these barriers also don't really know how to manage their money very well. They pay financial advisors to do it for them, or they have wealthy relatives who give them a break or something. This isn't about knowledge, this is about being treated equally. These solutions that are based on just learning the tricks of the trade aren't going to work because they're based on a false sense that the people who are being offered these solutions are actually going to get them and be allowed to take advantage of them.

Melissa Harris-Perry: If financial literacy for Black entrepreneurs, Black customers, even the financially highly literate Black folk working in these banks, that isn't where the solution lies, where are the systemic solutions?

Emily Flitter: I think that on a product level, there are things that big banks can do that they don't do, for instance, JP Morgan, made a $30 billion pledge to address the racial wealth gap and part of that pledge involved making mortgage loans. JP Morgan doesn't do the loans that are best suited for Black borrowers. They're just not in that business anymore. Banks could declare that whatever the extra costs, they're going to go in and start offering products that really are designed to suit borrowers who currently can't get the loans that they offer.

That would be how individual institutions can really change their missions. The solution that I talk about in the book, though, is bigger and broader. I believe, after doing a lot of reporting and talking to people who are way smarter than me, that the financial institutions, the financial industry really needs to embrace the concept of reparations. By doing that, they would be having to explain to their literally millions of employees what went wrong and what it would really take to fix our society. I think that the cultural change that could be brought about by that embrace would be very important.

Melissa Harris-Perry: Emily Flitter is author of the White Wall: How Big Finance Bankrupts Black America. Emily, thank you so much for joining us today.

Emily Flitter: Thank you for having me, it's been a pleasure.

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