As we look ahead to 2024, we are reflecting on the biggest trends from 2023 that contributed to a more just banking system.
Five trends making banking more equitable for all
1. Regulatory moves, including a final rule on the Community Reinvestment Act (CRA) are helping to set more fair guidelines for banks despite setbacks. California signed a first-in-the-nation law requiring big companies to disclose their carbon emissions, while Washington state is setting aside money to repair harm from decades of redlining.
2. Climate justice is being foregrounded across the banking industry, even as bank financing of oil and gas increased in 2023. 84% of executives think taking Environmental, Social, and Governance (ESG) policies seriously will help deliver a more robust corporate strategy and 85% of investors reported that ESG results in better returns with more resilient portfolios.
3. More accountability came for the biggest banks with the Consumer Financial Protection Bureau (CFPB) taking action against Bank of America, Citi, and Wells Fargo with penalties linked to their harmful practices. The Federal Reserve blamed the collapse of Silicon Valley Bank on lax oversight, while managers at Wells Fargo could become answerable to a union.
4. Equitable practices are being adopted by a growing number of financial institutions. This year, our Underwriting for Racial Justice (URJ) initiative launched a Lender Pilot Program convening 20 lenders to develop solutions to up credit access for borrowers of color. Overdraft income went down and the CFPB is working to remove medical bills from credit reports.
5. New models for economic inclusion are being increasingly tested nationwide. San Francisco approved a plan to create our country’s first city-run public bank, and there has been continued growth in universal basic income (UBI) pilots across the country. Plus, employees in industries long overdue for worker empowerment are turning to unions to improve their workplaces.
We appreciate all of the collaboration in 2023 including with the Advisory Council for our Equitable Bank Standards, and with our co-publishers on our Participatory Investment guide. And of course with our close partners at Beneficial State Bank (don’t miss their latest impact report!).
We look forward to our continued work together in 2024 to nourish our communities, make equitable banking a reality, and to create a more just economy for all.