Reading Time: 14 minutes

[Sound of people walking]

RESHONDA YOUNG: And then off from here is the living room. And [laughs] so it’s kind of funny: Sometimes when I’m working, I just get a little tired. … Then I will come right here and take a nap. [Laughs]

JAMIE SMITH HOPKINS, HOST: ReShonda is showing me a chair in her living room that she has all set up with a blanket and a pillow. 

RESHONDA YOUNG: Instead of me actually going upstairs and going to bed because that could be dangerous. I’d be there maybe for hours. But that’s like my little 20-minute nap spot. 

HOST: Lately, she’s been working so much that she sometimes has trouble staying awake. 

RESHONDA YOUNG: And I have a bad habit of, like, falling asleep … sitting at the table or at the desk. And I literally, on more times than one, have like thrown my neck out and ended up in the chiropractor. 

HOST: She’s got a lot on her plate. For one thing, she’s starting the bank, but she’s also advising small business owners and running a business accelerator and working on a microloan program. 

[Sound of door opening] 

HOST: And she does it all from her front porch. 

RESHONDA YOUNG: So this space is the front pretty much three-seasons porch.

HOST: It’s a bright, airy room, with three walls of windows. There’s a freezer in the corner so ReShonda can always get some ice. In the summer she runs the ceiling fan, and when it’s cold she switches on a space heater. 

And right next to her desk, there’s a treadmill.

RESHONDA YOUNG: You know, there are a lot of times where instead of taking a nap, if my energy is low, I’ll just like crank the treadmill up and I’ll, you know, get to walking or a light jog or something for, you know, 10, 15 minutes. And … gives me a little bit more energy.

HOST: A lot of ReShonda’s energy these days goes to the Bank of Jabez. 

JAMIE SMITH HOPKINS: Can you take us through the process? … What steps have you already taken and what’s still to go?

RESHONDA YOUNG: Yeah. So my partners and I have been working with banking consultants and they basically outlined this 72-step process.


RESHONDA YOUNG: There’s a 72-step process. … And most of the steps are not, they’re not small, they’re not quick, they’re not necessarily easy. 

HOST: She sent me her list. There are actually 74 steps she has to get through. 

[Host reads collage of the steps, including “execute consulting agreement with consultant” and “selection of bank office location(s) and negotiate lease(s)”] 

RESHONDA YOUNG: We’ve completed like 38 of the steps, so — and yeah, so I guess that’s over halfway. [Laughs]

HOST: I’m Jamie Smith Hopkins. From the Center for Public Integrity and Transmitter Media, this is The Heist. This season, we’re focusing on the startling wealth gap between Black and white Americans. And one woman’s attempt to address it in her community. 

In the U.S., you can’t really build wealth without using a bank. If you want to buy a house or start a business, you probably need a bank. 

At its most basic level, a bank stores your money for you and it lends that money to other people. And a key way a bank makes money is by charging interest on those loans. Borrowers agree to pay back more than they borrowed. 

But where it gets a lot more complicated is how banks decide who to give loans to. Banks do this by determining risk. 

They consider your income, your assets, your credit score and a whole set of other factors, all to judge whether they think you’ll be able to pay back the loan. Some of it’s math, but there’s also human judgment in the mix. 

And that’s where discrimination comes in. That’s where, all else being equal, Black people are far less likely to pass the test. Far less likely to be deemed trustworthy. 

One investigation by the news organization The Markup found that Black applicants were 80 percent more likely to have their loan application denied than white applicants with similar qualifications.

And that risk assessment piece: that’s one of the areas where ReShonda is trying to make a change. At the moment when the bank decides … can we trust you? 

She wants her bank to do things differently. 

JAMIE SMITH HOPKINS: Could you introduce yourself? 

NICOLE ELAM: Yes. My name is Nicole Elam. 

HOST: I wanted to get a sense of what’s possible for ReShonda’s bank. So I called Nicole Elam. 

NICOLE ELAM: I’m president and CEO of the National Bankers Association, which represents the nation’s minority depository institutions all across the country.

HOST: That’s the kind of bank ReShonda is trying to start. An MDI, or minority depository institution. It’s a federal category that Congress created in 1989. 

In the last episode, we learned that ReShonda is hoping her bank can be a CDFI — a community development financial institution. MDIs have similar missions, but they’re owned or run by people of color. 

NICOLE ELAM: It is primarily owned and operated by minorities, it serves minority communities and it is a significant provider of mortgages and small business loans.

HOST: There’s some additional government support for these kinds of mission-driven banks. Once they’re established, there’s a fund that can help some of them grow.

Lately, federal banking agencies have been paying more attention to minority depository institutions as a way to help build wealth in communities of color. 

And they work. 

NICOLE ELAM: Minority-owned banks have really been at the center of wealth creation in these communities and have at times been the only banks that are serving these communities.

And so they’ve been very critical to closing the wealth gap. 

And so when you think about, you know, what it takes to close the wealth gap and what the three leading contributing factors to wealth creation are, it’s access to financial services, owning a home and entrepreneurship. … And minority banks have been at the center of all of that.

JAMIE SMITH HOPKINS: And of course, as you’re describing the role that these banks have played in their communities, you know, the question I have is: What about all the other banks? 

NICOLE ELAM: So the interesting thing is when you think about non-MDI banks, the communities that they’re sitting in, only about 6% of them are Black population, if you think about kind of a non-MDI. But if you think about a Black MDI, they’re sitting in populations where 60% of them are Black. And so, it’s a difference of where they’re sitting. And if you’re not sitting in the community, it’s unlikely that you’re serving that community.

JAMIE SMITH HOPKINS: How do you see Black-owned banks in particular serving the community differently?

NICOLE ELAM: I think it’s a different level of engagement, community engagement. 

HOST: Apart from loans or savings accounts, Black banks usually provide other services — like education about financial health or how to invest. 

NICOLE ELAM: So they are doing a lot of that building of financial acumen, a lot of the hand-holding that’s required to become bank-ready, to become capital-ready, to become mortgage-ready. 

All of that requires a significant amount of time and energy that oftentimes you’re seeing those relationship-driven minority depository institutions are doing. They’re providing that level of technical assistance to get folks from start to finish.


HOST: If you look at a map of Waterloo and plot out all the banks, the first thing you’ll notice is how unevenly distributed they are. There’s a big cluster of branches out on the west side, but on the east, there are only two. There are some credit unions on the east side, but more of those, too, on the west.

What would it mean for people on the east side of the river to have a bank that’s based right in the neighborhood, that’s born on the east side? What would ReShonda’s bank do for them? 

[sound of opening door]

MARVIN EVERETT: Have a seat, have a seat.

HOST: I spoke to Marvin Everett on his back porch on a warm September afternoon in Waterloo. The sun was starting to set, and the crickets and lawnmowers were waking up. 

JAMIE SMITH HOPKINS: That’s the 9 to 5 that you do? 

MARVIN EVERETT: I’m a third-shift worker. I chose third shift because I figured we were opening a business, I can run my business in the daytime, I can go to work at night until my business provides an income that I no longer have to work. 

HOST: Waterloo is not the kind of place Marvin ever thought he would live. He’s Black, a born and raised New Yorker. But a couple years ago, he moved to Waterloo to be with his wife, Rosemary, and he got a job at a distribution center in town. 

MARVIN EVERETT: I went in last night. My wife says, “Why are you leave so early?” I leave this house at 10:35. …

I’m at work. … I put my boots on and I wait. New thing they started, they don’t want us punching in five minutes to. …

I have a boss right now riding me on my job. … The first thing he said, “Oh, you were late.” I said, “No, I’m not late. How am I late? … Clock-in is 11 o’clock.” 

“Oh,” he goes. He comes back to me and says, “Yeah, you was 25 seconds late.”

HOST: 25 seconds late. 

MARVIN EVERETT: How am I late when I was here 15 minutes to 11? … I worked through the whole entire COVID. That should mean something to a company.

JAMIE SMITH HOPKINS: I can see why you’d rather be running your own business. 

MARVIN EVERETT: We’re in a time of entrepreneurship. People don’t want to work. People want to own businesses because they know that the time they get old, 65, and Social Security may not be around, they can still take care of themselves.

HOST: In 2019, Marvin saw an opportunity to start his own business. Something that could make him more money and eventually mean no more bosses, no more clocking in. 

He wanted to buy a laundromat. And there was one for sale nearby. 

Marvin’s wife runs a small business called Rosemary’s Cleaning and Laundry Service. She cleans and does laundry for local businesses and residents. She was already using the laundromat, and she says she was managing it for the owner. Owning the laundromat would be a way to make her business more efficient. 

Marvin says he had good credit and a steady income, and he had a clear plan for his business. So he went to the bank and asked for a loan. 

And he says he got approval but the interest rate they gave him was high. His monthly payments would have been more than he felt comfortable with. The laundromat needed some repairs, too, so Marvin decided he couldn’t do it without a lower interest rate. 

MARVIN EVERETT: So in my thinking, I said, “Maybe it’s my credit score. Let me wait for a little while. Just keep working on my credit. Just keep working at it.” A year later, almost, I come back.

HOST: In 2020, Marvin came back with a higher credit score. 

And this time, he says, the bank just said no. He said the reason they gave him was the pandemic, but that didn’t make any sense to Marvin. Weren’t people still washing their clothes? 

MARVIN EVERETT: I put the hard work in. So I’m here. I got a great credit score. I got stable employment. 

HOST: But this bank wasn’t going to help him. 

Marvin has a criminal record, and it’s possible the bank came across that and factored it in. But there’s really no way of knowing for sure. 

What’s frustrating to Marvin is that it just felt like the goalposts kept changing. And he was never sure what he needed to do for the bank to trust him. 

MARVIN EVERETT: Save for retirement — I’m 56, never had nothing, decided to take a chance on life. And here I am. And all I’m asking for is the opportunity. 

There are a lot of steps in qualifying for a loan — maybe not 74 steps, but it takes work. And sometimes a loan officer will help someone find their way through all those steps. Rosemary says she doesn’t think the banks in Waterloo would do that for them. 

ROSEMARY EVERETT: A regular bank around here, they would never tell me, “Do this, this, this, and that, and come back to us in three months and we’ll reconsider.” That would never happen. …

But this is how life is here in Waterloo.

RESHONDA YOUNG:  I don’t know what all of the institutions here do, but the ones that I’ve dealt with, it’s pretty much like, you know, either you’re accepted for a loan or you’re denied and there’s no working with you to say, “OK, how do we make this happen?” 

HOST: ReShonda believes that if the Bank of Jabez were open, it all would’ve gone differently. 

First off, Marvin would’ve walked into the bank and seen people working there who looked like him. 

The loan officer would have asked questions about Marvin’s financial situation, but also about his hopes and dreams for the business, his history with money, maybe even the ways that he’s felt excluded from banking. 

All this doesn’t mean that Marvin would automatically get approved for a loan at the going rate. The Bank of Jabez will still need to make loans that make money for the bank. They’ll need to do the math on whether a business plan looks like it’ll succeed. 

On top of that, they’ll need to follow banking regulations — MDIs aren’t exempt from those. But ReShonda’s bank would have some leeway. 

Like with credit scores. Banks can decide how much they want to factor those into lending decisions. 

And most importantly, ReShonda says the Bank of Jabez will do something that Marvin and Rosemary wanted the other bank to do for them: Help customers figure out how to qualify. 

Marvin and Rosemary know ReShonda — Rosemary is ReShonda’s cousin. And they know about ReShonda’s plan for the bank. Remember the 24/7 Wall St. report? The one that listed Waterloo as among the worst cities in America for Black people? Marvin and Rosemary think that a Black-owned bank would really change that. 

MARVIN EVERETT: I think a Black-owned bank is vital. It’s essential. Because … this is not the worst place for Black people. What makes it worse is because they cannot get financial help to grow.

ROSEMARY EVERETT: One of the other hurting things is that, you know, you get turned down. But then three months later … a white guy, he buys the laundromat.


JAMIE SMITH HOPKINS: Why are there so few Black-owned banks in the U.S. and what is the consequence of that? 

NICOLE ELAM: Yeah. So, you know, at its peak, there were over a hundred Black banks. 

HOST: Nicole Elam from the National Bankers Association says today, there are just 19 Black banks in the country. In the last two decades alone, 30 Black banks were either acquired by other banks or shut their doors entirely. 

The 2008 financial crisis was a big part of that. A huge number of banks failed — about 500 in total. 

The biggest reason Black banks fail, and are hard to start, is because of undercapitalization. It’s the same problem ReShonda had with her business, Popcorn Heaven. 

NICOLE ELAM: You know, it is extremely hard. … And we know that Black and brown people have a more difficult time, you equate it to a small business, they have a more difficult time raising the capital because capital tends to come from family and friends, which is not the same, you know, family and friends that others who’ve been able to build up generational wealth may have. …

And I would note that the capital that’s going into these banks, two things: One, that capital is not flowing equally to all MDIs. Typically you’re finding that this capital is flowing to some of the largest MDIs, who are in some of the largest markets, which is a great thing.

But what about our MDIs that may be in Mobile, Alabama, or Jackson, Mississippi? They’re not seeing the same influx of capital.

HOST: In a small city like Waterloo, raising a lot of money is tough. But without a minority depository institution, Nicole says the racial wealth gap there could get even worse. 

NICOLE ELAM: Because if you only focus on these larger markets where you’ve got huge concentrations of Black and brown communities — the Atlantas, the Baltimores, the New Yorks, the, you know, the D.C.s — if you only focus on those markets, what’s going to happen is that the wealth gap is going to grow. And those smaller markets aren’t going to get the investments. And, you know, it’s not as sexy, the headline isn’t as big, the impact isn’t as big. But if you’re not, again, if you’re not careful, the wealth gap is going to grow.

[Sound of knocking on a door, a chime, door opening, ReShonda Young saying “hello”]

HOST: ReShonda has to show a need for her bank — that’s one of the 74 steps. So she’s been knocking on doors on the east side, asking people if they’d use the Bank of Jabez.

RESHONDA YOUNG: Okay, so as you maybe heard, maybe not, I’m in the process of starting a bank, a community bank here in Waterloo …

HOST: The overwhelming answer is yes. But before anyone can open an account, she needs investors: She needs to raise that $10 million dollars in seed funding. And at least 51% of it needs to come from Black individuals. 

And she’s not going to find many investors by going door to door.  

RESHONDA YOUNG: It’s money that’s at risk. You know, you may not get this money back. And so you’re going to have a lot of people that will shy away because of that. And I don’t blame them. 

Yeah. I definitely don’t blame them for that.

HOST: But in 2021, ReShonda heard about a group of investors who might be game. 

Investors who know something about the banking business.

Waterloo’s Community Bank & Trust, a mostly white-run bank, might be willing to invest in the Bank of Jabez.

Stacey Bentley is the president and CEO of Community Bank, and she helped open it back in 1997. 

STACEY BENTLEY: We wanted to start a community bank. You know, we wanted to make a difference in our community and not have clients have to call 800 numbers or talk to people on the east or west coast or whatever. We want them to be able to call Stacey Bentley, even my cell phone or whatever, you know, and just try and make a difference here, and I think we have. 

HOST: Stacey, and most of the other people who work at Community Bank, are white. 

STACEY BENTLEY: Where ReShonda and I have talked is, we know we’re not serving everybody in the community. While we’d like to, we know we’re not. We also know there’s barriers to coming into certain institutions, financial institutions and banks. …

When I had to get a loan recently, a couple of years ago — it was for my son — and so, didn’t have him bank here, so I had to go in with him to get a loan. It’s intimidating. And I’ve been a banker my whole life, and so I know the steps in the process and why they ask the questions, or why we ask the questions that are asked and all that, but to sit there and … you’re kind of spilling your soul out. You feel intimidated.

HOST: She’s heard that firsthand from people of color in Waterloo. 

STACEY BENTLEY: Once in a while, they’ll say, they’re not going to come into the bank. You know, “My friend does not — they’ve had a bad experience with the bank, they’re not going to come in. But maybe if you meet them for coffee, they’ll tell you what they need or their issues.” And maybe I can help then.

I’ve had many times with that and I’ve done that, but that’s just a few, you know, that’s a very small — not even a percentage of helping people.

JAMIE SMITH HOPKINS: You’ve had these opportunities to be able to sort of like one-on-one … 

STACEY BENTLEY: One-on-one. 

JAMIE SMITH HOPKINS: … you know, deal with the sense of broken trust or, just the concerns that people are having. But your concern is that’s not enough, that all the one-on-ones you do would never be able to reach everybody who needs to be reached?

STACEY BENTLEY: Wouldn’t make a difference. Right. So, I mean, I make a difference in maybe — I hope we make a difference in one life or that life, but it’s not enough for our community. … We’ve got a very beautiful, diverse community here, but there’s not a trust of all banks here. And so I think ReShonda will bring a trust in, that a traditional bank maybe doesn’t have. I just think that she’ll make a bigger difference in our community than I can.

HOST: When I talked to Stacey, she’d already invited ReShonda to come in and pitch the executives at Community Bank’s parent company. Maybe they could help ReShonda get closer to that $10 million mark.

It seemed like a huge deal for ReShonda’s bank. But it also felt kind of sadly ironic. 

Because ReShonda’s trying to start a bank that would better serve the Black community in Waterloo. But first, she needs to ask a roomful of white bankers to buy into that vision. I asked her what the pitch was going to feel like. 

RESHONDA YOUNG: I think a little nervous. Not because I doubt anything with the bank. Like there’s no doubt that it’s needed and will be successful. I just have trouble asking people for money [laughs], you know? 

HOST: In the summer of 2020, thousands of people marched through downtown Waterloo, protesting the murder of George Floyd, which happened just a few hours north, in Minneapolis. 

ReShonda says that the protests got a lot of people asking, again, why this small city in the Midwest, with a Black mayor and a Black police chief, kept being listed as one of the worst places for Black people to live. 

And more than she’d ever seen, white people started asking what they could do. 

RESHONDA YOUNG: More and more people are pitching in. Even with the bank. I’ve had people that were in my groups that, you know, have sent money to donate into the bank and, you know, just really wanting to be a part of making sure that some of these problems get resolved or at least addressed in a meaningful way.

HOST: So ReShonda’s hopeful. But only to a point.  

RESHONDA YOUNG: So even when I felt like the window of opportunity was open last year, in my mind, I’m like, OK, people generally only have so much of an appetite for anything. But this type of thing, especially.

And so I think the window of opportunity is still, it’s still fairly wide open. But do I feel like it’s closing some? I feel like it’s closing some. 

HOST: Next week on The Heist …

ReShonda: But even seeing this and then knowing what things are like today, it’s like, change may be slow, but it should not be this slow. Oh my gosh.

HOST: How did the wealth gap become so huge? And what will it take to really fix it? 


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 Mitchell Johnson. 

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.

Help support this work

Public Integrity doesn’t have paywalls and doesn’t accept advertising so that our investigative reporting can have the widest possible impact on addressing inequality in the U.S. Our work is possible thanks to support from people like you.