Harold Butler, Managing Director in Global Public Sector & Head of Minority Depository Institution at Citi and Dominik Mjartan, Optus Bank President & CEO, joins Yahoo Finance Live to discuss expanding banking and access to credit in Black communities.
ALEXIS CHRISTOFOROUS: Switching gears now, and minority entrepreneurs seem to be at a tipping point as the number of Black-owned banks in the US continues to dwindle. Consider this. In just the past two decades, the number of Black-owned and operated banks has been sliced by more than half to just 20 now.
Citigroup is working to change that. It is partnering with minority depository institutions, MDIs, to help expand banking and access to credit in Black communities. It's all part of Citi's $1 billion investment to help close the wealth gap. Joining us now is Harold Butler, managing director in Citi's Public Sector Group, and Dominik Mjartan, President and CEO of Optus Bank, which is one of those MDIs I just referred to. It's great to have you both here with us on the show.
Harold, I want to start with you. Why do you think it is that we've seen a drop in these minority-owned and operated banks? And what's the larger implication for low-income minority communities?
HAROLD BUTLER: Well, thank you first for having me. And it's a great question. And I think it really boils down to access to capital. You know, in many ways, the banks that serve underrepresented communities, and most of them have been around for a very long time, you know, don't have the capital that they need in order to be truly successful and to be a benefit to the communities.
So-- and the other part of your question, I think really the risk here is how we touch those communities. You know, for Citi, we're really focused on working with banks like Optus Bank and how we touch those communities because we don't have a presence there. So being able to help close the wage gap and to help support communities of-- underrepresented communities of color with access to credit, fair and equitable lending, all that-- all those activities and more really need to go through the financial institutions that know the communities best and have a heartbeat of activity in those communities.
- So then, Dominic, I want to come to you because you are the president and the CEO, as Alexis was just mentioning, of one of those MDIs, Optus Bank. When you get that infusion of capital through a partnership like you're doing with Citi, what can you do to strengthen and grow your institution to touch some of those communities that have historically been underserved and under-banked? What can some of those communities expect from Optus Bank, as an example, going forward when it comes to those financial services?
DOMINIK MJARTAN: Thank you very much for this opportunity. And in simple terms is they can expect more wealth building services and capital flow into communities and businesses that have been historically underserved. In our case, as Harold was talking about the banks, we represent one of 18 African-American-owned banks today. And a big reason for that significant decline and for the fact that there are so few of us in this country is really we bank intentionally in places, and we bank people that may not fit the traditional financial model of large institutions.
So we rely on key strategic partnerships, like that we have with Citigroup and with Harold, to fill those gaps. So that capital that has really represented now the single largest infusion of capital that we have received, is now being deployed into communities that have historically been starved for capital. We leverage that capital with deposits, and we loan it out. In our case, over 90% of all of our assets are carefully invested in communities of color or businesses that are women-owned or minority-owned or minority-owned homes.
So your question is the most pertinent and relevant. What is this going to do for that person or their small business on the ground that's fighting the 400-year legacy of systemic disadvantages? And in our case, and in the case of our partnership with Citi, it means they now have a real partner. They now have a real chance to build economic opportunities for themselves and their families.
ALEXIS CHRISTOFOROUS: Harold, I don't know if you sort of have your finger on the pulse here of what demand has been like from minority communities. Over this past year, this very tough past year, have you seen an uptick in the number of people in minority communities going out and trying to find loans? Or is it that just activity has sort of, you know, come to a standstill because of the pandemic?
HAROLD BUTLER: Well, I think it's a little bit of both. I think it really depends on geography largely, you know, because part of-- the other part of the equation is making sure that, in addition to access to capital through the financial institutions, that the word gets out. In a lot of cases, in areas that may be a bit more remote, you know, it's not as well known that there's an opportunity that banks like Citi are supporting local community banks in their effort to be able to put capital to work in those communities. You know, it expands even to, you know, our clients and being able to get that word out about large corporate clients and their desire to make an impact in those communities.
So I think-- and you're correct that while I don't have a direct pulse on the amount of business owners looking to get loans, for example, I can say that, you know, the increase and desire from the banks themselves, and from corporates, small corporates that have reached-- that reach out directly to Citi, for example, that's certainly has been an uptick over the last several years.
ALEXIS CHRISTOFOROUS: And it certainly is a sign that things are moving in the right direction. Harold Butler, Managing Director at Citi's Public Sector Group, and Dominik Mjartan, CEO of Optus bank, thank you both gentlemen. Have a great weekend.