{"id":37272,"date":"2023-03-27T19:20:17","date_gmt":"2023-03-27T23:20:17","guid":{"rendered":"https:\/\/test.greenmoney.com\/2025\/?p=37272"},"modified":"2023-04-27T21:43:12","modified_gmt":"2023-04-28T01:43:12","slug":"three-ways-financial-advisors-can-advance-racial-and-gender-equity","status":"publish","type":"post","link":"https:\/\/test.greenmoney.com\/2025\/three-ways-financial-advisors-can-advance-racial-and-gender-equity\/","title":{"rendered":"Three Ways Financial Advisors Can Advance Racial and Gender Equity"},"content":{"rendered":"
>> Back to April 2023 Issue<\/a><\/div>\n

\"MaryWhen looking to meaningfully address the gender and racial wealth gap, investors should consider parking their funds at financial institutions like HOPE Credit Union (HOPE) that are in the communities where this work needs to happen.<\/span><\/p>\n

At the onset of the pandemic, as market rates dropped and the country responded to the murders of George Floyd and Breonna Taylor, HOPE experienced an uptick in corporations and other deposit aggregators calling to make deposits. The conversation was easy. The rate of return was barely concessionary, and these organizations had a very direct and easy way to publicly show investment in advancing economic justice. Now, some are choosing to pull deposits because the rates are too low.<\/span><\/p>\n

HOPE\u2019s priorities and the reality of our borrowers have not changed. We still need these deposits to fuel growth in deploying capital to disadvantaged communities. Consider the story of Courtney Tobias. Ms. Tobias needed capital for her start-up, Lunchroom Coffee, an organic fresh-roasted coffee distributor in Louisiana. Like too many women and business owners of color, she met resistance from traditional financial institutions. Ready to give up, she thought she was \u201cdone with lending institutions because they weren\u2019t structured for people like me.\u201d<\/em> Before giving up, she was referred to HOPE and was provided a $10,000 loan structured to support entrepreneurs affected by the pandemic. Today, her product is sold in 13 retail outlets and she maintains a robust online presence. Looking ahead, she wants to expand by purchasing a trailer and, ultimately, building her own manufacturing facility.<\/span><\/p>\n

\"Courtney
Courtney Tobias, Lunchroom Coffee founder received a startup loan from Hope CU after being turned down by traditional financial institutions.<\/em><\/figcaption><\/figure>\n

These loans are made possible because HOPE is a trusted partner in the community and also representative of the community it serves. Nearly 70% of HOPE associates are people of color and 72% are women, and this extends to HOPE\u2019s senior leadership as well. We know from FDIC research that Black owned banks locate in Black communities at much higher rates than White owned financial institutions. And not surprising, they lend at much higher rates to Black homeowners and small business owners seeking credit.\u00a0<\/span><\/p>\n

Further, the loan is made possible through HOPE\u2019s core deposits, many of which are available through HOPE\u2019s <\/span>Transformational Deposits<\/span><\/a> program.\u00a0<\/span><\/p>\n

Transformational Deposits Stand In For Core Deposits<\/span><\/h2>\n

Core deposits (regular checking and savings) come with lower rates of return while fueling loan growth in mainstream institutions. HOPE and other community development depositories differ in access to these deposits. Two out of three HOPE members \u2013 on any given day \u2013 have less than $1,000 in their savings account. HOPE must use Transformational Deposits \u2013 money market accounts and certificates of deposit (CDs) with below market returns as \u201cstand-ins.\u201d According to data from Callahan & Associates, HOPE\u2019s core deposits compared to total deposits is just 20%, whereas peer credit unions in Mississippi and across the U.S. consistently have core deposits that comprise 40%.<\/span><\/p>\n

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