Episode 1: A deeper look
JAMIE SMITH HOPKINS, HOST: A few years ago, ReShonda Young offered to help a neighbor in her Bible study group.
RESHONDA YOUNG: One night she had sent a text message to the group and just said that she wasn’t gonna be able to do the small group Bible study because they fired someone, and she was going to have to work longer hours.
HOST: Her neighbor worked at a small investment firm, with a few employees, just outside ReShonda’s hometown of Waterloo, Iowa.
RESHONDA YOUNG: I was like, OK, I’ll send her a message to see if she needs some help. … And so she’s like, OK, well, give me three months.
HOST: Three months of work, part time. ReShonda was already busy with her own business and running an online apparel store, selling T-shirts and sweatshirts. And ReShonda is also a landlord. She has that entrepreneurial energy: She’s usually juggling a bunch of different projects, and she prefers working for herself. But she wanted to help her neighbor.
RESHONDA YOUNG: I’m like, all right, I’ll give you three months.
HOST: ReShonda’s job was to be the first point of contact for clients. She helped them get ready to talk to an advisor about their investment portfolio and retirement planning.
Within the first month, she noticed something about the clients she was meeting …
RESHONDA YOUNG: Everyone was white, mostly.
HOST: White people in town had the assets to show up at an investment firm, looking for ways to grow their money, or their family’s money.
RESHONDA YOUNG: There was a lot of pass down, you know, of wealth from older generations to the next generation or younger. … There was one couple … that had gotten like a million-dollar inheritance from the husband’s grandfather and it’s like, wow, that’s pretty nice.
HOST: ReShonda ended up working at the firm for two years, and she kept seeing the same kind of people come through the door.
The money they had was a world away from what ReShonda, who is Black, saw growing up in her family’s neighborhood.
RESHONDA YOUNG: These families, and generations of white families, have, you know, they have such a head start. And you know, our parents and grandparents, they’ve run hard. But when I think about it in my mind’s eye, I’m like, I see this racetrack. And I see my grandparents running, but they weren’t even on the track, you know, they hadn’t even got to the track. They’re running to get to the track and you’ve got this, you know, other people in the race who — they’ve been on the track. They’re so far ahead, how do you catch up?
HOST: This inequality wasn’t news to ReShonda. But at the investment firm, she spent two years staring at it. Up close. And she kept asking herself …
RESHONDA YOUNG: How do I make a difference?
HOST: ReShonda was already teaching people in her community about investing and managing finances …
RESHONDA YOUNG: But it’s like, I’ve got to do more. How do I do more? You know, and that was the prayer. Like, “OK, God, how do I do more?”
HOST: The solution she landed on?
Open a bank.
I’m Jamie Smith Hopkins. And from the Center for Public Integrity and Transmitter Media, this is The Heist.
This season we’re focusing on a monumental American heist. A heist pulled off through centuries of discrimination and exclusion. A heist that has left its mark on every town and city and bank account in this country.
The wealth gap between Black and white Americans.
There are lots of numbers that illustrate this gap. But here’s one that sticks with me — the median net worth of a white family is eight times that of a Black family.
Most people don’t think of themselves as “wealthy.” But what “wealth” really means is having a safety net when things go wrong.
It’s owning a house you could sell or having some investments you could cash in. It’s having money in your savings account. It’s being able to call up a parent or grandparent to ask them for money when things are tough.
There are people all over the U.S. — people of all races — who don’t have that.
But when a white family with median net worth needs to pay for a sudden medical expense or send a kid to college …
Or when they want to build more wealth by buying a house or starting a business …
They have around $188,000 in assets to lean on. A Black family with median net worth has around $24,000.
That adds up to a total wealth gap of at least $11 trillion. Not billion. Trillion.
It can seem like an impossibly big problem.
I’ve been reporting on inequality for years, and it’s easy to feel like there’s nothing a single person can do to move the needle, that it’s going to take a big, national effort to balance things out. But some people are working on solutions, day after day, in their communities. I wanted to get to know someone like that.
That’s how I ended up talking to ReShonda Young. ReShonda wants to address the wealth gap by opening a bank that will help Black people get further down the racetrack.
If she succeeds, it will be the only Black-owned bank in Iowa.
And it could be the first one to open in more than 20 years anywhere in the country.
[BREAK]
You might dream about starting a small business. You may have even done it. But a bank?
Who decides to open a bank?
Money’s been on ReShonda’s mind since she was a kid.
Her mom worked as a maid. The most she ever earned was $5 an hour. She didn’t want to spend the money she had on clothes, so she would keep her work uniform on to go to the grocery store or run errands.
ReShonda hated asking her mom for anything.
RESHONDA YOUNG: As soon as I could work, you know, age 14, I wanted to be able to work. And detasseling corn was like the only job that I could get.
HOST: To detassel corn, you have to walk through fields pulling the caps off corn stalks. It’s hard, physical work.
RESHONDA YOUNG: And so, you know, that first day when I went out, I’d never been in a corn field … and then the corn will cut you. And so you’re trying, I’m trying, to avoid the cuts that you get, like along your neck and your face and your hands and your arms, from the corn.
HOST: Making money, even with a tough job detasseling corn, mattered a lot to ReShonda. She wanted to help her mom out.
RESHONDA YOUNG: So I was really slow that first day. And one of the managers at the end of the day, he’s like, “All right, well, you don’t need to come back tomorrow.”
HOST: But ReShonda wasn’t going to just give up. She made a plan to go back the next day, this time with long sleeves, gloves and a bandana to protect herself from the cuts.
RESHONDA YOUNG: I literally dreamt about detasseling corn that whole night, like that was my whole dream is me detasseling corn. And that next day it was like second nature. And they split you into three crews. … And I was on the fast crew by the end of the summer and ended up working that whole summer. … So I was able to buy all my school clothes and all my own stuff like my school supplies that year, which was really helpful for my mom.
HOST: She bought her mom clothes, too.
It always bothered ReShonda that her mom worked so hard and for 29 years never made more than $5 an hour.
She never had the chance to build much wealth. And neither did her parents, ReShonda’s grandparents.
They were sharecroppers in Mississippi — part of a system designed to keep poor farmers poor, especially Black farmers. The whole family worked long hours in cotton fields, and sometimes the kids missed school. They moved to Waterloo in the ’60s.
ReShonda says the people her grandparents sharecropped for withheld Social Security payments from their earnings but never sent that money to the government. Which meant ReShonda’s grandparents ended up getting very little from Social Security.
Earlier in her grandparents’ lives, farm workers were completely excluded from the Social Security system. That disproportionately affected Black Americans.
So when ReShonda’s maternal grandparents died, there was no wealth to pass on.
RESHONDA YOUNG: My grandfather died September 29 of 1996.
HOST: His funeral cost around $11,000.
RESHONDA YOUNG: You know, family has to chip in. And so instead of that passing on of wealth, it’s, you know, monies that have been saved having to be passed up.
HOST: ReShonda’s grandmother passed away a couple months later.
RESHONDA YOUNG: Obviously there was no money left for her, her burial. And so one of the scholarships that I had for college that covered like my room and board and some extra expenses, I ended up, you know, giving all of that to help with her burial expenses. And then I moved off of campus.
HOST: She went back home and commuted to campus for the rest of her senior year.
Right out of college, ReShonda wanted to be an entrepreneur. So she bought her first rental property at 25. She worked for her dad’s contracting business in Waterloo. And she started a business of her own, which she ultimately franchised.
Through it all, ReShonda noticed that, whether she was trying to get a loan to buy a rental property …
or open a business …
or help her dad’s business expand …
Banks were an obstacle.
There was one interaction back in 2019 that ReShonda remembers being particularly bad. She was looking for a loan from a bank where she’d been a customer for six years.
ReShonda says a bank employee called her, and the conversation did not go the way she was expecting. She says he threatened her with foreclosure on a mortgage she already had at the bank.
RESHONDA YOUNG: “We’ll take everything you have.” … And I’m just like, “What are you doing?”
HOST: After the call, ReShonda says the bank sent her a letter saying she had failed to pay her mortgage that month.
RESHONDA YOUNG: Which was not true. I would actually walk in every month and, you know, talk to the tellers and one of the bank managers, and I actually had been dealing with the bank manager that day.
HOST: ReShonda remembers the manager taking the mortgage payment and giving her the receipt. But ReShonda says she discovered the money had been put in a checking account rather than applied to her mortgage.
RESHONDA YOUNG: I don’t even use the checking account there.
HOST: She says she thinks the bank did this on purpose.
RESHONDA YOUNG: You know, you know why they’re doing it … You know as a Black female. I just remember saying to the bank, I was like, “Is this really the conversation that we’re having right now? And if I were one of the white male business owners around here that I know they have a banking relationship with — if I were him, would you be speaking to him like this?”
HOST: This is how ReShonda remembers this. She negotiated a settlement with the bank that prevents her from naming it. So we can’t ask the bank what they have to say.
But this wasn’t ReShonda’s first bad banking experience. When she went to a bank, she often felt the banker wasn’t there to help her. They were there to find a reason why they shouldn’t help her.
JAMIE SMITH HOPKINS: What was the point where you’re like, “Oh, wait a minute. This is just flat-out discrimination that I’m facing”?
RESHONDA YOUNG: So one of my friends is vice president at a local bank and … at that time I was running my dad’s businesses and we were talking about some of the lending needs that we had there and the struggles that he was having, just being able to get a loan. You know, he’d been in business for more than 20 years and couldn’t get a loan to save his life, it seemed like. And so he’s like, “Oh, I’m sure we can work with him.”
HOST: Then the conversation turned to her rental properties. What happened next was so unusual for ReShonda that it was eye-opening.
RESHONDA YOUNG: So he brings me in and he sits me down and he’s — the commercial lender, his name was Paul — and he’s like, “Hey Paul, this is my friend ReShonda.” And … going on and on about how much fun we’ve had and then he’s like, “Just take care of her.” … And it was like, “OK, we’ll just wrap all these up into one loan for you.” And then he’s, I mean, he’s giving me all these options for me to be able to structure this in the best way for me. And then at that point, I’m like, yeah, there are different rules for different people. It’s about who you know and how much into their inner circle you really are.
HOST: Eventually, ReShonda started dreaming of a bank that doesn’t revolve around inner circles and who you know. A bank that doesn’t discriminate.
RESHONDA YOUNG: And from my own experience between running my dad’s companies and my own, I just feel like it’s so much easier to create a culture that you want than to try and change a toxic culture that’s been in place for decades.
HOST: ReShonda already has a name for her bank — the Bank of Jabez. It’s an Old Testament name.
RESHONDA YOUNG: So it says, “Jabez was more honorable than his brothers. His mother had named him Jabez, saying, ‘I gave birth to him in pain.’ Jabez cried out to the God of Israel, ‘Oh, that you would bless me and enlarge my territory, let your hand be with me and keep me from harm so that I may be free from pain.’ And God granted his request.”
And so as I was, like, downstairs in my laundry room, when the Holy Spirit just brought this to me, like he went with, Jabez was more honorable than his brothers. And it was like, this bank … is going to be more honorable than what’s already there. There won’t be the discrimination based on your race. … We’ll give people fair returns. …
And then it says his mother had named him Jabez, saying, I gave birth to him in pain: And the thing that hit me hardest — like, yeah, there’s been some pain that I’ve gone through, but when I really felt like the Holy Spirit just said, like the pain that He’s birthing this out of, the pain that He feels when He sees His kids doing each other wrong … and that’s what this is birthed out of. Not just my pain or the pain of a race of people, but His pain as well.
[BREAK]
RESHONDA YOUNG: Before you guys came I actually had kind of a lively morning. I had a dryer delivered this morning, so I was hoping that they got here before you guys did.
HOST: ReShonda lives in a three-bedroom, eggshell blue house.
[Sound of door opening]
In the kitchen, there’s a popcorn machine and a painting of a whisk that says “whisk-y business” on it.
In the living room, there’s a fireplace …
RESHONDA YOUNG: Love fireplaces, but I can’t strike a match, which is so funny. Like, I love to have a fireplace, but somebody else needs to start the fire. [Laughs]
HOST: There’s also a covered porch, with Christmas lights to turn on when ReShonda sits out there, working late nights.
If you zoom out from ReShonda’s house and look at her neighborhood from above, you see rows of neat, green blocks, roofs rising up among lawns and trees.
Zoom out further and you can see the house ReShonda grew up in. And railroad tracks. They cross through a bunch of Black neighborhoods in this part of Waterloo — and ReShonda remembers trains idling by her high school on these tracks. They were dangerous to cross on the way to and from school.
Zoom out again and you see the Cedar River. It’s Waterloo’s dividing line. It splits the city into an eastern section, where most of Waterloo’s Black residents live, including ReShonda, and a western section, which is mostly white.
When ReShonda and I drove through Waterloo, she pointed out the difference in wealth between these two parts of town. In neighborhoods in East Waterloo, we saw a lot of small, older homes.
Then, when we drove across the river to West Waterloo, we saw big, spiffy, manicured houses and lush, landscaped lawns.
Waterloo is a deeply segregated city — and a deeply unequal one.
Around 70,000 people live here. About two-thirds of residents are white and about 18% are Black.
In 2018, a financial publication called 24/7 Wall St. ranked the Waterloo metro area as the worst place in the U.S. for Black Americans to live. It got this ranking partly because of big economic disparities.
The median income for white households in Waterloo is about $52,000. That’s 80% higher than the median income for Black households, which is about $29,000.
The homeownership rate for white residents is double that of Black residents. Meanwhile, the unemployment rate for Black residents is almost four times higher.
The report highlighted these kinds of disparities.
ROBERT SMITH: Actually, the first time I saw it was on my phone and, you know, I was like, wow.
HOST: When I wanted to hear more about the 24/7 report, ReShonda told me to talk to Robert Smith.
Robert is the executive director of the University of Northern Iowa Center for Urban Education. He helps low-income students get GEDs and enroll in college. He’s also very connected in Waterloo — he’s been on the school board, hospital boards, and the board of a local bank.
Robert says many leaders in Waterloo were embarrassed by the report. It put a national spotlight, a negative national spotlight, on the town.
ROBERT SMITH: When it comes from the outside, it’s like the outside world is looking. You know, it’s hard for people to move when it’s just in-house. … Some Black community members had always been talking about, “We got problems,” but you know how that goes. It’s people who are not influenced by for whatever reason or not impacted by it, oh, it’s, you know, “Maybe they’re just kinda making this up. It’s not that bad, you know.” But when those numbers came, people’s eyes opened and they felt like, “Hey, we better get on this and do something about it.”
HOST: Robert and other Black leaders wanted to use the momentum from the report to do something about Waterloo’s wealth gap.
They created an organization called the 24/7 Black Leadership Advancement Consortium. It helps Black residents grow their own businesses and learn how to invest.
The group asked ReShonda to run their small business accelerator. They couldn’t think of a better person to do it — she already had a reputation for helping small businesses in town.
Robert wants Black people in Waterloo to know more about how wealth works. He’s learned a lot about how wealthy families use the financial system, starting when he interned at a bank during college.
ROBERT SMITH: Probably the biggest thing, man, is I realized they wasn’t working for it. [Laughs] This whole thing about work hard. No, it’s money working hard for you. So probably the biggest thing I remember, you know, over time learning, like, God, you guys are not working hard. You guys are just putting your money in places that’s working for you. But when you’re growing up poor, you always hear it: You work hard.
So, you know, I had this mindset that people with $10, $15, $20 million — man, they worked hard. Well, sometimes they just had a good idea and had access to resources, but they wasn’t working to create that money. That money was working for them.
HOST: When you have wealth, you’re probably already participating in the things that build more wealth. The stock market, real estate investments, retirement funds.
ROBERT SMITH: How do I help more people figure out how to get to the table? It’s just try to, you know, be on the inside, learn as much as I can and try to do the best job I can to try to communicate that. … To say, “Hey, this is how you got to try to get yourself inside.”
JAMIE SMITH HOPKINS: That is profound because that’s thinking of the system like this building, you know, where maybe all the doors are closed. It’s not obvious how to get in, you know, and you’re trying to figure out, “How do I get in, and how do I help other people get in?”
ROBERT SMITH: That’s it, somebody has got to be on the inside. To be able to say, “This is what it looks like. Here’s where all of the pieces are. And then if you get yourself in, these are the hurdles that you’re going to have to jump.”
HOST: The hurdles are big and systemic. And Robert says ultimately the government has to help clear them.
ROBERT SMITH: So I’m a realist. You know, there’s some things, it’s not going to change because that’s what the foundation was set on. So figure out a way to benefit from it and do what you can to help others do it. So, yeah, I believe government certainly has a responsibility to do right by Black people, but at the same time, what we can do for ourselves, I’m saying let’s do what we can. …
You just, at some point you realize, man, I can’t keep beating my head on the wall, you know, listen to some politician come and tell me they’re going to do all of this. And then you walk outside, you drive down, you know, East Fourth Street, it’s not a whole lot’s changed.
HOST: That’s why Robert has focused on giving people the tools they need to navigate banks in town …
ROBERT SMITH: So you go in a credit union or a bank and you’re empowered. You should never feel like they’re doing you a favor. You are actually doing them a favor by trying to do business with them, because that’s how they make their money. But most of our people don’t know that. They didn’t have a dad or a mom or had a neighbor or somebody you can go call and say, “Hey, I’m trying to go do” — there’s not even a Black banker in this town. You can’t go to one Black person that I’m aware of and say, “Hey, I want to borrow $5,000 or $10,000,” not one.
HOST: Robert likes ReShonda’s idea of opening a bank. He thinks it’s one way of bringing people who have been locked out of the banking system into it.
But he’s seen how hard it is to start a bank.
ROBERT SMITH: Just the things you have to go through just to file applications, to even begin to try to run a bank: I mean, it’s just, it’s almost like trying to become an FBI agent or something. It’s a lot of expectations and work, but the biggest thing, you gotta have a couple of heavy-hitters. Some people with some deep pockets to get behind you, to make sure, you know, that you get resources that you need. …
So I gave her some names of some people to talk to, but the best advice I could give her is that you’re going to need capital. Running a bank or credit union is purely money. [Laughs] It’s strictly about money.
HOST: It’s about a lot of money. ReShonda is trying to raise $10 million in investments.
Ten million might not seem like a lot of seed money for a bank. It’s not a lot of money when you think about a huge bank like Chase or Wells Fargo. It’s not a lot of money if you have access to a sprawling network of wealthy investors.
But ReShonda needs to raise $10 million in a community that doesn’t have much wealth. In a town where the median income for Black households is $29,000 a year. In a town that has been ranked as one of the worst places in the U.S. to be Black.
And there’s something else: ReShonda might seem like an unlikely person to take on this particular challenge — an unusual banker.
Sure, she owns real estate. She’s worked in finance and insurance. She’s a successful entrepreneur, and she helps other businesses in Waterloo get off the ground and grow.
But she’s never worked at a bank. And she’s filed for bankruptcy protection twice.
ReShonda’s recruiting a team, including bankers, to help her. But she believes her experience, all the ups and downs, is exactly why she should open a bank.
RESHONDA YOUNG: I’ve been through a lot. And I know that, or I believe that, many of the lessons that we learn, they may be for us, but they’re just as much for other people as they are for us. And so I like to share those lessons because it would have been amazing to have had someone to share them with me.
HOST: But if wealth works by multiplying money where it already exists and sucking it away from people who don’t have it, how do you even get the money to start a bank in the first place?
How do you raise $10 million to open what could be the first Black-owned bank in 20 years — and do it on the east side of the river?
Can you?
Next week on The Heist …
ReShonda has an encounter that leaves her reeling.
RESHONDA YOUNG: I was outwardly very calm but inside I’m just like, you gotta be kidding me. Like, I was really, really frustrated.
[CREDITS]
HOST: This season of The Heist is hosted by me, Jamie Smith Hopkins, and brought to you by the Center for Public Integrity and Transmitter Media.
This episode was written and produced by Camille Petersen. Sara Nics is Transmitter’s executive editor with additional editing by Shoshi Shmuluvitz.
Wilson Sayre is our managing producer and Gretta Cohn is our executive producer.
The Center for Public Integrity team is Jennifer LaFleur, Matt DeRienzo, Lisa Yanick Litwiller, Janeen Jones, Ashley Clarke and Alex Eichenstein.
Our fact checker is Peter Newbatt Smith.
Rick Kwan is our mix engineer.
Special thanks to Jordan Bailey.