Banking While Black: The Business of Exclusion

By Hossein, Caroline Shenaz; Associate Professor of Business & Society et al. | The Canadian Press, May 8, 2018 | Go to article overview

Banking While Black: The Business of Exclusion


Hossein, Caroline Shenaz, Associate Professor of Business & Society, University, York, Canada, The Canadian Press


Banking while Black: The business of exclusion

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This article was originally published on The Conversation, an independent and nonprofit source of news, analysis and commentary from academic experts. Disclosure information is available on the original site.

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Author: Caroline Shenaz Hossein, Associate Professor of Business & Society, York University, Canada

Black Canadians are twice as likely as those in the overall Canadian population to have low incomes, get shot, be unemployed and to encounter systemic bias that interferes with equal access to goods and services. The financial world is no exception.

Black people have a hard time getting access to money to borrow, or are completely shut out. They often encounter horrid service when they do go into a bank. Remember Frantz St. Fleur, a Haitian-Canadian, whose Toronto bank called the police while he was trying to deposit a $9,000 cheque? He was profiled by bankers who called the police, who promptly arrested him. Both assumed his cheque was fraudulent. It wasn't.

More recently, a Nigerian-Canadian entrepreneur reached out to me to share her story. Her bank account was frozen because the bankers thought she had too much activity going in and out of her account. She's a businesswoman. It should be no surprise to her bank that she makes a lot of transactions. It's no wonder Black people want to redo the way banking works.

My current research examines business exclusion for racialized Canadians and how they co-opt resources to create vibrant local economies.

Progressive non-profits such as ACORN don't get it. They speak of financial alternatives but they do not give any solutions. Sure, they speak about credit unions, but credit unions are too scarce to be a reasonable choice and aren't often located in poor neighbourhoods. Like commercial banks, they also deal with their own cultural diversity issues.

A look at the Meridian credit union or the Alterna credit union in Toronto's posh east end says a lot. They are situated in areas that are convenient for white people, and the general reputation of credit unions in Canada seems to be an old white man's bank. They do not look like they are working to attract racialized clients.

An alternative financial service institution is one that provides outside help and one that promises to do things differently from formal banks. Up to now, the fixation by progressives has been on the big bad guys like Cash for Money, Money Mart and payday lenders.

But we also need to be looking at banking alternatives that actually help people. For example, Montreal has a group called Montreal Community Loan Fund (ACEM). It's a community bank that started back in the 1980s to democratize finance and to create an inclusive business environment.

Today, ACEM is an organization supporting thousands of small business people, especially immigrant-owned businesses that cannot access credit, even from the guichet Desjardins, the supposed good guys. This was a credit union that started informally to help the French-speaking Catholic minority in rural Quebec in the 1900s. This original intent to put banking within reach of the excluded is important for Canada. Somehow, the modern-day credit unions have turned their back on racialized minorities who feel cut off from formal conventional banks.

'Banker Ladies'

There Is Another Real Alternative (TIARA) in the form of mutual aid groups and co-operatives. Hundreds if not thousands of hyphenated Canadians engage in mutual aid groups or peer-to-peer banking institutions, officially known in academic circles as rotating savings and credit associations (ROSCAs).

ROSCAs are mutual aid groups. They're informal institutions where members self-organize, decide on the rules and make regular fixed contributions to a fund that is given in whole or in part to each member in turn. …

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