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Calls have grown in recent months for banks to consider how systemic racism affects their customer service and lending practices.

A survey of 342 Black entrepreneurs released in May found that anti-Black systemic racism, particularly at banks, creates widespread barriers. The survey, commissioned by the African Canadian Senate Group and Senator Colin Deacon, revealed that only 19% of Black entrepreneurs said they trust banks to do what is right for them and their community.

That mistrust correlated with a lack of access to loans: almost all survey respondents said they started financing their businesses through personal savings or credit cards, with only 15% using a bank loan.

“The reality of anti-Black racism is that it impacts you in every institution you come into contact with. The banking industry is no different,” said Nova Scotia Senator Wanda Thomas Bernard, a member of the African Canadian Senate Group.

Another report released in April found that 78.5% of Black female entrepreneurs had trouble accessing financing.

“The bank has been a barrier to the Black community gaining any kind of generational wealth,” said Charline Grant, co-founder of advocacy group Parents of Black Children and partner with Kedz Consulting, an anti-racism training organization based in Vaughan, Ont. “Getting good service for a Black person [at a bank] is a lottery draw. My outcome is based on who I get and how they view me.”

Grant said banks have shown a lack of understanding of her experiences and the businesses she runs, which has made it difficult to access financing.

“Underwriters don’t look like me when they’re doing the mortgages. Loan officers don’t look like me when doing business loans,” she said, adding that lenders have not understood the growth prospects for her businesses that serve the Black community.

She also criticized the “discretionary practices” lenders employ when deciding who gets a loan and at what rate.

“Wherever there is discretion, there will always be discrimination. Who will be discriminated against? Black folks and Indigenous [people]. Because every narrative tells everyone to be afraid of our Black skin. And that’s what we face when we walk into the bank.”

Girish Ganesan, global head of diversity and inclusion with TD Bank Group, acknowledged banks have work to do, particularly in light of a series of incidents at an Ottawa TD branch that made headlines in April.

“We know that eliminating bias and removing impacts of racism is not a passive effort. It requires us to be actively anti-racist,” Ganesan said. “In addition to educational programs, we know we have some work to do in terms of eliminating bias that might exist in procedures. That’s not just limited to TD; this is about the industry. We are looking at a variety of strategies on how to work on that.”

Ganesan said that as of late April, 94% of TD employees had completed training modules titled Understanding Black Experiences and Anti-Black Racism/Anti-Racism.

Breaking down barriers

All of the Big Six are part of the Government of Canada’s Black Entrepreneurship Loan Fund, which began accepting applications on May 31.

Banks are also taking steps to root out bias from customer service experiences.

Brent Chamberlain, associate vice-president of inclusion and diversity with CIBC, said the bank has revamped its unconscious bias training in the past 12 months.

“I’ve heard team members describe our previous approach like a car wash: you go through your unconscious bias training and you come through squeaky clean on other side. But that’s not true,” Chamberlain said.

To change that perception, CIBC has evolved its training from “a one-time thing into an experiential journey that lasts a number of months and has reinforcing steps along the way.”

CIBC also launched a banking program in February that aims “to remove barriers to access for business owners from the Black community” as a supplemental program to the Black Entrepreneurship Loan Fund.

Dominic Cole-Morgan, senior vice-president of total rewards at Scotiabank, said the bank has launched inclusion training for all customer-facing employees in Canada that “includes tips or strategies to help manage through several scenarios, including if a customer says something racist to an employee.”

The training is part of the bank’s overall commitment to inclusion and “a fundamental part is that our customer-facing employees understand that [a customer’s] experiences may be different to their own,” Cole-Morgan said.

A Bank of Montreal spokesperson said that more than 90% of the bank’s front-line and branch staff have completed training modules related to Indigenous perspectives and unconscious bias. The bank will launch training on racial justice and the Black experience for all employees “in the coming months.”

RBC, which did not respond to interview requests for this article, announced in July 2020 that it would lend $100 million to Black entrepreneurs over five years and make anti-racism and anti-bias training mandatory for all employees.

National Bank of Canada declined to be interviewed. According to the bank’s diversity and inclusion booklet, 97% of National Bank employees had completed diversity and inclusion training as of Dec. 31, 2020.

Making things right

In March, Amalgamated Bank became the first major bank to endorse U.S. legislation for a commission to develop reparations for Black Americans.

Do reparations have a place in Canada’s banking industry?

“If you think about the multigenerational harm caused by systemic anti-Black racism, then yes, reparations are certainly important and due,” Thomas Bernard said.

She said many banks are already taking reparation-like action, such as funding scholarships for Black students and donating to Black community organizations.

“There are many different kinds of strategies that can be used to advance reparations,” Thomas Bernard said. “Part of that is an acknowledgement that systemic anti-Black racism is wrong; for the institutions to say, ‘We know that we’ve been a part of this, and now we want to be part of the solution.’ Part of that can be engaging with the community to change the cycle of inequality and to create cycles of opportunity.”

Grant said she would like to see steps such as discounted banking fees or business loans that can be partially forgiven, similar to the Canada Emergency Business Account offered by the federal government during the Covid crisis.

“There’s nothing I’m saying that hasn’t been done for other communities,” Grant said, noting that banks have discounted fees for minor-league hockey teams.

Thomas Bernard emphasized that marginalized communities are looking for “opportunities to help them to reach their full potential,” not a handout. “If we have more equity in the opportunities that are given, we will have more equity in the outcomes.”

Read our companion article that checks on the diversity and inclusion commitments made by banks and other financial institutions since May 2020.