♪ ♪ ♪ >> Kenneth Kelly, chairman and C.E.O.

of First Independence Bank, next on "The Chavis Chronicles."

>> Major funding for "The Chavis Chronicles" is provided by the following.

At Wells Fargo, we are committed to diversity and understand our responsibility in supporting and empowering diverse communities.

Diversity and inclusion is integral to the way we work.

Supporting the financial health of our diverse customers and employees is one of the many ways we remain invested in inclusion for all today, tomorrow, and in the future.

American Petroleum Institute -- through the core elements of API's Energy Excellence Program, our members are committed to accelerating safety, environmental and sustainability progress throughout the natural-gas and oil industry in the U.S. and around the world.

You can learn more at api.org/apiEnergyExcellence.

Reynolds American, dedicated to building a better tomorrow for our employees and communities.

Reynolds stands against racism and discrimination in all forms and is committed to building a more diverse and inclusive workplace.

At AARP, we are committed to empowering people to choose how they live as they age.

♪ ♪ >> Kenneth Kelly, welcome.

>> Thank you so much, Dr. Chavis.

Thanks for having me today.

>> Tell us how you became chairman and C.E.O.

of a Black-owned bank.

>> Well, Dr. Chavis, you know, there are only 17 now left in the country out of approximately 5,000 banks.

>> Well, let's say that again.

Only 17?

>> There are only 17 African-American-owned and controlled banks in this country out of nearly 5,000 banks in our country today.

And so, to your point, it does come with a lot of responsibility, one that I take dear heart and great care in thinking about on a daily basis.

But I was fortunate enough to sit in this seat because of the vision of a man named Don Davis, who was a cousin of mine.

He actually bought this bank some 42 years ago.

And, unfortunately, we lost him in 2014.

And now we have the opportunity to really carry on his legacy and being sure that we provide financial services to the area of Detroit, Michigan, and now recently in Minneapolis, Minnesota.

>> So, tell us, how does a brother from Alabama wind up having an impact in Detroit?

>> Well, as you know, and you said it well, Dr. Chavis -- many African-Americans looked for opportunities in the '20s, '30s, '40s, and '50s, and they started that migration up North.

Detroit was one of those hotbeds.

In fact, I say to people all the time, one thing you can be sure of, if someone's from Mississippi, Alabama, Georgia, or South Carolina, they likely have someone who has been to Detroit or lived in Detroit.

And that was true for our family, too.

A segment of my family moved to Detroit many years ago.

And the cousin that I mentioned earlier, he was a part of that.

And so the bottom line is, we have family there in Detroit, and that's a deep root system for us, along with Chicago, Pittsburgh, and some of those other industrialized cities when people move for better jobs from the ag system to the industrial system.

>> How do you measure inclusiveness and diversity and equity in the financial-services community?

>> I'll say it this way.

When I think about what you just asked, I look at the reports associated with the Federal Reserve of Chicago, the Federal Reserve of Boston, and the FDIC, and each of them have demonstrated when you have institutions that reflect those communities, you have better outcomes.

It's the old secret-shopper model.

It is what we're seeing now with the appraisal process and the stories that have been in the news where African-Americans get one appraisal, you can take that same home, ask a friend who is Caucasian, and they can go and get a different appraisal.

The point I'm making is, we have a natural affinity to deal with individuals who look like us.

And when you think about capitalism in a very, very basic sense, money is the oxygen for capitalism.

And so we have to be a part of that.

We believe this institution represents that.

And actually encourage others to get into the financial services because we see things like the wealth gap, et cetera.

>> There are national -- a lot of national pundits, they always make a reference that African-Americans spend over a trillion dollars in the American economy on an annual basis.

But how does that translate, though, to Black-owned businesses, particularly Black banks?

Tell us the importance of having a Black-owned bank in America today.

>> Well, I would tell you it symbolizes a beacon of hope, from my perspective.

I've said that many a times.

You can't go to any city and not see one of the tallest buildings in that city have a bank name on it.

And so when you think about capitalism in that $1.6 trillion or whatever that number is, the reality is, many of us have large purchases that do not flow through African-American communities.

And that is one of the challenges.

We know that the dollar in the Asian community circulates the greatest.

We know it also circulate about the same for Hispanic and Caucasians at about 20 days.

And the African-American community, the statistics is, the dollar circulates about 6 hours.

And so we have to think about our own personal bank account.

How many of our dollars actually support small African-American businesses?

You can take a lot of those big bills out, such as houses, in some cases, cars, et cetera.

But I think we have to have a higher level of consciousness about where our dollars are spent if we're going to ever invigorate what I would call an African-American business-owner economy.

>> You know, there are a lot of big banks and small banks.

Do any of these big banks try to help minority-owned banks?

>> Dr. Chavis, I had the pleasure of serving as the chairman of the National Bankers Association.

It's been around since 1927, be coming up on 100 years.

>> That's the Black bankers.

>> That's the Black bankers.

But it also now is broader than just Black bankers, also.

We include other minorities.

But what I would tell you, when I served as chairman in that role -- in fact, just three years ago, in 2019 -- we convened a table and had eight of the top 10 banks sit around the table to at least hear our story.

And this was data by Milken Institute that African-American banks were undercapitalized, which means they can't be as effective in their community.

And so from that, what we have seen, and even the catalyst of George Floyd's murder, we have seen investments from many of those large banks now.

And so the point I'm making is, I think there's a clear recognition in this day and time that minority institutions, specifically Black institutions, needed capital to be successful in supporting the communities that they really care about.

>> I hear from a lot of millennials, generation Z, a lot of young people say they want to "stack their paper."

>> Yes.

>> Can you talk about the importance of investing one's financial resources?

>> Well, I would tell you, then I got to come to a story about gen Z in just a moment that's very personal to me.

Many may not know these statistics, but very fundamentally -- And I don't care how much money you make, it doesn't matter.

The question is, can you articulate that money into a lifestyle that pushes you into and through retirement?

And so, by my studying -- and we have a tool on our website -- you could run the numbers, but it averages about 18%.

So if you saved and invested 18% of your income, from day one, at the age of 22, 23, whenever you start working, into your retirement, regardless of how much money you make, that amount of income will support you to continue the same lifestyle by the time you turn 60, 61 years old.

And so you can run this calculator on our website for yourself personally.

But those are the very fundamentals of the math and how it works out.

So my message here, Doc, is that when you think about this, it doesn't matter if you are working in sanitation or if you're an engineer or a C.E.O., if you appropriately account for 18% of your salary, by the time you get to your eight your age of 61, 62, you will have enough of a nest egg to live on that will carry you into your 80s and 90s without having to worry about working.

So those are statistics we need to talk about from a financial literacy perspective.

Regarding your question on the gen Z, about three-plus years ago, we started a -- at that point in time, we called it a Millennial Advisory Board.

They have renamed themselves the Next Generation Board.

But the point is, for a bank like ours to remain relevant, we have to realize we've got to cater to and understand the younger generation.

And so that group, I would tell you, I'm very proud of.

There's a story written up about that in Forbes magazine, that next gen, many of them are running businesses themselves.

But they're getting a chance to share with us what we need to do to be relevant to them.

But most importantly, we're trying to provide leadership so that they can sit at the table and be bank directors or directors of other companies going forward.

So I'm very proud of that, and I'm glad you brought that up.

>> You mentioned the importance of having adequate capitalization.

A lot of our entrepreneurs, they have great ideas but don't have the capital to really get them started, to have sustainability in the marketplace.

How do we enable the next generation of Black-owned business owners?

>> Well, I certainly want to be very thoughtful about how I answer this, but here's what I would tell you.

Banks are actually -- they work off of collateral.

And so we don't have the ability to just say, "Oh, I think I have a great idea, support it."

We are a collateral-based bank, and it is one of the challenges that our banks, in particular Black banks, have had for many years now and just one reason you've seen some changes.

But what we have put forth recently is a program to look at focusing on even smaller businesses like you just said.

So in two aspects -- one, to start a business, and, secondly, to acquire an existing business so you don't have to start from scratch.

And it is my fundamental belief if we can buy businesses that are already operating and then expand them, it is an easier way to grow capital, so to speak, from a business perspective.

And so we've just recently approved two programs at our board level at the bank this year to be able to do lending at the level of $100,000 and $150,000 for a new business and buying an existing business.

So it is our belief that if when you think about capital, it is really a collection of moving all the way from can I collect coins from my family and save all the way to being bankable, meaning you have the collateral.

And so we're trying to figure out how to fit that and be innovative in that approach.

Some of that is going to come with some governmental support and guarantees that will allow us to do that.

But we're very proud of looking at trying to reach deeper into that market.

>> How is the industry itself moving?

Do you see more diversity, equity, inclusion in the overall financial-services industry?

>> I've had a chance to speak before the subcommittee and testify on some of these issues.

I will tell you, it's a slow process when you think about this issue of inclusion and diversity.

I also sit on the board of the American Bankers Association, which represents the total industry of financial services.

I'm one of the executive sponsors of the Black Banker Employee Resource Group, something that's very new to the American Bankers Association.

But it says that we are signaling the right way to go about making change, which is going to be systemic, and it will last for the long haul.

Is it fast enough for me?

Absolutely not.

I think we need to talk about these topics more.

We need you as a leader asking those questions of the media from the media's perspective of "Are we having enough progress?"

'Cause our goal is, when we look 5, 10, 15, 20 years from now, we can see substantial change.

But when you look at it across the diversity of leadership, it's inadequate today.

When you look at it across lending and impact in the communities, it's inadequate today.

But we've got to continue to talk about it, we've got to continue to force that.

And what has been great is, over the last few years, we've seen the leadership in Congress really put this on the forefront and create a level of accountability.

We've also got to do that from the public and from the media in talking about these issues.

>> You've written a book.

>> Yes.

>> Tell us about your book.

>> Well, it's to the point you just brought up -- it's about wealth.

When I look at and think about wealth and what I just shared earlier about whether you make $30,000 a year or $5 million a year, your wealth is still your wealth.

And what I found is, in particularly in the African-American community, only 3 out of 10 African-Americans have a will.

That's a failure for our community.

And some of that is cultural.

We do not want to deal with our own mortality and morbidity.

I write about my story in dealing with that and how that almost became a mistake in my family.

But I also write about a lot of well-known people that we all know and respect.

And let me say this -- I write this as lessons learned, not a detriment of any of their characters, because I respect each and every one of them as individuals.

But Chad Boseman's story has been in the news.

You know about that.

That was in my book that we finished at the latter part of the year.

James Brown's story -- 15 years, 12 lawsuits, 15 years to settle his estate.

Prince's estate.

At the time, I documented in the book, the attorneys alone -- the attorneys alone -- had billed his estate $10 million.

Those $10 million would not get to his heirs and the people he cared about.

John Singleton, leader, "Boyz N the Hood," the coming of age of me as a young man, had some of those same challenges.

But we also write about everyday people in our book -- the schoolteacher who worked all her life, paid for a house died without a will.

Two kids, they get roughly about $10,000 apiece.

That house is turned and flipped and sold for almost $200,000.

That is wealth that is lost in our community every day.

And so I'm here to strongly encourage everyone to have a will, a healthcare directive, and a power of attorney.

So we write about that in the book.

But I also write about stories, Doc, to show that sometimes it's not about the material things, it's about philosophy.

So the latter part of my book is this discussion about "what's important to me and my philosophy that I want to leave my kids," not just the material things.

Oftentimes, we don't take the time to write that.

And to prove the point, there was a lady named Oseola McCarty.

Oseola McCarty was a washerwoman.

All she did all her life was wash people's clothing.

>> What city?

Where was she from?

>> She's from Hattiesburg, Mississippi.

Never owned a car.

And later in her life, she left the University of Southern Mississippi $150,000 for African-American kids to have scholarships to go to the University of Southern Mississippi.

President Clinton, at that point in time, acknowledged her, and it became a national story, and others contributed to and fully endowed those scholarships in her name.

So she left a legacy, and that's my point.

We all have a legacy to leave, and we can make a difference.

And so, for Oseola McCarty, who never owned a car, left $150,000.

Reporter asked her, "Didn't you want to do something for yourself with that money?"

She said, "I just did."

That's the level of sacrifice and principal centered that's not about material things but what does your life mean and stand for is the reason that we wrote that book.

And so this is an area we're passionate about, if you can't tell, Doc, but it's one I think we can certainly change the wealth gap as it -- as it -- in particularly as it relates to African-Americans.

>> There's been a study to show that African Americans are still losing land -- Land Loss Project.

And then, when it comes to the redlining and the whole issue -- controversy of evaluating an appraisal, getting a fair appraisal of the properties that we own, what are the three most important things that our viewers need to pay attention to to begin the pathway toward wealth-building?

>> Yes.

>> Out of poverty, toward wealth-building.

>> Yes.

I will tell you, going back to what we talked about with the book, land ownership for African Americans, at one point in time in this country, was 15 million acres of land.

That number now is speculated to be somewhere between 2 million and 5 million.

A lot of that is lost through the migration, when many people left the South, and just really lost contact and said they'd never go back, don't pay the taxes on it.

And most importantly, when it's not passed properly.

So it becomes heir property.

You can't do anything with it.

You can't sell, you can't even take advantage of federal programs.

I'm gonna give you one example on that.

During Katrina, when FEMA came in to help support, there was heir property that was there, and those individuals couldn't qualify for the resources for rebuilding.

And so those are examples of wealth that gets squandered.

And so I want to talk about that, because to your point about this land issue, I would tell anyone, if you have land in your family, think of how you can solve that today.

I have it on both sides.

I can raise both my hands.

Both sides of my family, there's property that has not properly passed, and so it is now heir property.

And those are things we all need to deal with, especially as African Americans.

>> But heir property is now -- Apparently, it can be changed, right?

Or is it permanently heir property?

>> It can be changed, but it takes time and effort to do that.

In fact, to your point, there's a whole effort going on right now looking at assessing that, attorneys who are providing projects and doing work, in some cases pro bono, to try to get that, let's call it wealth, unlocked, because it is wealth that is locked up for a lot of families.

So that that is one issue.

To your second question, regarding redlining, we know that that was a real issue in the '50s, '60s, '70s.

It looks differently now where people don't just outright discriminate, but they do it through subtler ways.

But we've got to address that and we've got to talk about that.

How many mortgage lenders who look like me that you know?

Probably very, very few.

How many people do you know that look like me who are appraisals, who would have the cultural competence to understand what a house value actually is, not just based on it having a Black homeowner versus a white homeowner -- or perceived white homeowner?

Those are areas I think we have to be very strategic about.

And so if you ask about those three things, that's what I would suggest to you.

>> In your role also now with the American Bankers Association, you get a chance to see the whole panoply of what big banks are doing.

How would you evaluate their relationship?

>> What I will tell you, the intent is, this is a long-haul discussion, Dr. Chavis.

The relationships are getting off to a good start.

They were critical to our move to Minneapolis.

Many may know, your listeners, Minneapolis is where George Floyd was murdered.

The leaders in that market came together and said, "We want to do something different as banking institutions."

They checked their badges at the door and sat around the table.

Because I had a previous relationship with one of those banks, they invited me in to hear my thoughts about that because of our relationship in Detroit.

And from that conversation, the discussion of looking at opening the first African-American-owned and controlled bank or branch in Minneapolis came about.

Took us a year and a half to execute on that.

But those are some of the examples that I hope -- >> That's very positive.

You know, a lot of times after these tragedies, like what happened to George Floyd, after the media goes away, community is left not only traumatized by what happened with the tragedy, but there's been no real relief.

But for you to say now that First Independence Bank is not only in Detroit, but now you're in Minneapolis... >> That's correct.

>> ...that's very significant.

>> And I will tell you, thank you for saying that.

But I will tell you, I was -- it was unprecedented to see banks that represented 80% of that market, in terms of they represented 80% of the deposits, to say welcome to another bank coming into that market.

But it just goes to show that there are some genuine individuals and leaders out there who are looking to make real change.

And I'm -- I can tell you, I'm proud to be associated with them.

Now, the good news for us is, yes, we're there, and we have gotten the pledges.

We've got a lot of work to still do in that market, but that group is now still meeting and looking at other ways that we can be helpful in creating change that could be impactful.

>> Are there other members of your family in financial services?

>> No.

Well, my sister, indirectly.

She ironically works for one of those banks in Minneapolis, Bremer Bank.

She spent her whole career, went through accounting at Auburn University, and worked for several banks, now works with Bremer.

Her husband actually transferred into Minneapolis.

But she's the other individual who works in this space.

>> The reason why I ask the question is, intergenerationally, there needs to be a pipeline so that we can have other Kenneth Kellys.

>> Well, thank you.

>> You know, we don't want you to be a -- >> A unicorn.

>> That's right.

And so are there workforce development programs, are there training programs so that young people can consider the financial-services industry as a career path?

>> Let me share something with you that we can share with your listening audience.

I think I shared with you I met with the president of Saint Augustine.

>> Yeah, Raleigh, North Carolina -- great HBCU.

>> That's correct, Dr. McPhail.

And part of my meeting with her was helping to set up through really the North Carolina Bankers Association, me and this gentleman are actually on the ABA board together at a point.

We're setting up, actually, a pilot program at your HBCU that will create certification for students who go through the program there so that they can come out and actually be a credit analyst moving into the banking industry versus having to go and then get that accreditation later.

That pilot program, as I understand, will be with four universities in North Carolina.

The first of its kind in the country right now.

But Saint Augustine is one of those.

And so I had a chance to sit with your president of the university just a little bit over a month ago to talk about this issue.

And she welcomed the opportunity.

And so those are the kinds of pipeline legacies I think we have to begin putting in place to make financial services not an anomaly but something that all of us can have access to.

>> Right.

There are 110 HBCUs, and I'm hopeful that what you started at Saint Augustine's college can be replicated at all of the HBCUs, 'cause I think, young people, when they're making career decisions, need to know about these opportunities... >> That's correct.

>> ...in financial services.

Kenneth Kelly, what gives you your greatest hope for America?

>> Oh, you're asking who I am and whose I am now, indirectly.

Dr. Chavis, I have two kids.

I know one day I'm gonna leave here.

My greatest hope is that they live in a society that appreciate them, as Dr. King said, for their character, that they be contributors to society.

And I'm pouring all I can into them and others.

As I wrote about in my book, talking about who I am, I set up endowments and scholarships for African-Americans to be engineers from my hometown, Eufaula, to go to Auburn University before I even had the funding available for my own kids to go to college.

Because I have seen that education can be life-changing.

>> So giving back is a part of your own evolution.

>> I say it more simply -- giving is a part of living.

And for me, in what I consider now my legacy-building years, in terms of being able to give as much of myself for others to be able to carry on, I inherit a legacy.

I have four generations that's buried in Barbour County, with the oldest that we know of who was a slave brought by a Scottish banker, ironically, from South Carolina to Alabama.

And so that's who I am.

That's whose I am.

And I will tell you, my greatest hope is that America will continue to evolve on this topic of inclusion, on this topic of recognizing what Dr. King asked of us in his dream, that individuals be recognized for their character and the content of their character.

>> Kenneth Kelly, chairman and C.E.O.

of First Independence Bank, thank you for joining "The Chavis Chronicles."

>> It's my pleasure, Dr. Chavis.

Thank you for having me.

Thank you.

>> For more information about "The Chavis Chronicles" and our guests, please visit our website at thechavischronicles.com.

Also, follow us on Facebook, Twitter, LinkedIn, YouTube, Instagram and TikTok.

>> Major funding for "The Chavis Chronicles" is provided by the following.

At Wells Fargo, we are committed to diversity and understand our responsibility in supporting and empowering diverse communities.

Diversity and inclusion is integral to the way we work.

Supporting the financial health of our diverse customers and employees is one of the many ways we remain invested in inclusion for all today, tomorrow, and in the future.

American Petroleum Institute -- through the core elements of API's Energy Excellence Program, our members are committed to accelerating safety, environmental and sustainability progress throughout the natural-gas and oil industry in the U.S. and around the world.

You can learn more at api.org/apiEnergyExcellence.

Reynolds American, dedicated to building a better tomorrow for our employees and communities.

Reynolds stands against racism and discrimination in all forms and is committed to building a more diverse and inclusive workplace.

At AARP, we are committed to empowering people to choose how they live as they age.

♪ ♪ ♪ ♪ ♪