Rep. Maxine Waters And Others On House Financial Services Committee Say Banks Profited From Slavery And Should Redress Past Wrongs

Rep. Maxine Waters And Others On House Financial Services Committee Say Banks Profited From Slavery And Should Redress Past Wrongs


Dr. William 'Sandy' Darity, left. House Financial Services Committee Chairwoman Maxine Waters. (AP Photo/J. Scott Applewhite)

Banks were complicit in the atrocities of slavery by funding enslavers and should begin atoning for their participation in one of America’s original sins. That’s the viewpoint of Maxine Waters and other House Financial Services Committee members.

Waters is chairwoman of the committee, which held a hearing on “The Role of Financial Institutions in the Horrors of Slavery and the Need for Atonement” on Wednesday, Dec. 7.

“Large banks and insurance companies have profited from the unjust economic legacy [of slavery], yet the debt to the descendants of enslaved people remains unsettled,” Waters said in her opening remarks at the hearing.

“The results from the committee’s inquiry into some of the highest and the biggest, the largest banks and insurance companies, demonstrate that more work needs to be done to ensure that the damages resulting from slavery have been remediated and the racial wealth divide addressed,” Waters continued. “Quite simply public apologies and acknowledgments are not enough.”

Georgia Congresswoman Nikema Williams also shared her idea on how banks could start implementing tangible steps towards atonement.

“Where do we start? I think passing my abolition amendment, which will end an exception in the 13th amendment that still allows slavery as a punishment for a crime,” Williams said. “Even with 191 bipartisan co-sponsors on my federal bill, we can’t get it done alone. As the financial industry thinks about atonement, joining our push to eliminate this exception is a no-brainer.”

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Expert Witness Testimony on Banks Role In Slavery

Renowned reparations scholar and Duke University Professor of Public Policy and African American Studies William “Sandy” Darity was among the expert witnesses who testified at the hearing.

He detailed how drastic the wealth gap between Black and white Americans is because of slavery and provided examples of how enslaved people were set back economically in various ways because they were deprived of the opportunity to work for hire and receive financial compensation for their inventions.

“Financial institutions were key supporters and beneficiaries of American slavery,” Darity said. “The full scope of creditor-debtor relationships interlocked with the slave plantation system has yet to be documented adequately.”

“For the record, details are needed about which organizations financed the New England textile industry, which bank or banks had Brooks Brothers, producers of plantation wear for both the enslaved and the enslavers as a client, and who were the lenders to the southern Planters themselves. This will require thick, archival research that has yet to be undertaken.”

Darity also outlined a variety of insurance companies that provided slave owners with policies to protect them if their human property fell victim to “death or damage.” He said it would take $14 trillion to close the racial wealth gap.

Other witnesses included Denia B. Francis, assistant professor of economics at the University of Massachusetts Boston; Lily Roberts, managing director of poverty to prosperity at the Center for American Progress; Seth Rockman, associate professor of history at Brown University; and Sarah Federman, assistant professor of conflict resolution at the University of San Diego.

Francis said that even if America was free from systemic racism and oppression after emancipation, the wealth gap would still be immense today because formerly enslaved Americans had no property or wealth when they were freed.  

She referenced a simulation expert economists completed that traced what the racial wealth gap would be if there were different scenarios from 1860 to 2020.

“The gap in wealth and emancipation was so large, that simulation suggests that even if Black households had the same capital gains and savings rates as white households from 1870 onward, white households would still have three times the wealth as Black households today,” Francis said. “Barriers to access to wealth and opportunity are not just in our past; they’re ongoing.”

“The financial and insurance institutions that benefitted from those [economic] injustices should have to reckon with the economic disparities of today,” Francis added.

Federman detailed how the practices of banks, insurance companies and other financial institutions during and immediately after slavery still permeate and impact the wealth of Black Americans today.

She explained the collapse of The Freedmen Savings and Trust Company chartered by Congress in 1865. She noted, “more than 61 thousand remaining depositors, many of them recently freed people, lost the equivalent of nearly 81 million dollars” due to mismanagement and fraud of the bank.

“Depositors lost significant assets and many Black families and communities lost faith in financial institutions with good reason,” Felderman said. “The disaster and its lack of significant consequences for those who contributed to it, demonstrate a systemic exclusion of Black Americans from the financial system and of a cultural willingness to accept the destruction of assets and wealth that is accumulated by the Black community.”

Suggested Ways Financial Institutions Can Atone

The expert witnesses offered solutions they believed would help financial institutions atone for their roles in slavery.

Darity, a staunch reparations advocate, reiterated the need for Black Americans to receive compensated for the many harms they’ve endured.

“I don’t think that the issue of the racial wealth gap in the United States can be addressed in any significant way without the federal government adopting a program of reparations for Black American descendants of U.S slavery,” Darity said.

Federman said financial institutions could give housing and education grants instead of loans and do consistent local community outreach to Black communities.

“People in these communities know what they need, we can walk into these communities and know what they need, so it’s not terribly mysterious,” Federman said.

“We’re going to want to look at a plan that includes the housing and, in the wake of George Floyd when we saw a lot of American financial institutions give money for racial equity, they often did it in the form of loans that they could profit from,” Federman continued. 

She added “I think it’s very important as we engage these corporations going forward that we’re talking about grants, housing grants, student loan grants as well, not just more loans because people are so buried into debt.”

Roberts said financial institutions are not ignorant to their histories and should be accountable for their past and present actions that have helped deprive Black Americans of wealth.

“Financial institutions are fully capable of learning their own history and understanding their own roles in past injustice,” Roberts said. “Next, they must work to ensure that they counter contemporary wrongs and avoid the easier instinct to think of historical context as separate from current circumstances – and be held accountable in doing so by the federal government, by shareholders, and by customers.”

PHOTOS: Dr. William ‘Sandy’ Darity, left. / House Financial Services Committee Chairwoman Maxine Waters, D-Calif., arrives for a news conference to talk about housing funds in President Joe Biden’s government overhaul, at the Capitol in Washington, Tuesday, Oct. 12, 2021. (AP Photo/J. Scott Applewhite)