Redemption Bank builds an anchor for Black wealth-building – in Utah

I'm David bank and from Impact Alpha. This is an Agents of Impact podcast.

0:02

If you're not African American, you can walk into any bank or go on any website that does lending. And you probably never crosses your mind that you would may or may not get access to what you're looking for because of your race. It's just something that doesn't make any sense. It doesn't even register you as a possibility that it could happen. But if you're an African American, you absolutely think about that.

0:07

That's Ashley Bell of Redemption Holding Company. Redemption last year acquired Utah based Holiday bank and Trust. The first time black owners had acquired a non minority owned bank from a Salt Lake City suburb. Bell is building a national financial institution. He told me Redemption will be releasing its own credit card bank king to honor Dr. Martin Luther King Jr. Timed for this year's Juneteenth celebrations. Bell also heads Ready Life, which is taking on the racial gap in home ownership. Let's jump right into our conversation.

0:28

Ashley Bell, welcome to the podcast.

1:03

Thank you for having me, David. Really good to be with you.

1:04

We've been tracking along with Redemption Holding Company for a couple years now as you bought a bank in Utah. So tell us about Holiday bank and Redemption.

1:07

Yeah, this past June 19, which was a, you know, year four or five of us having that federal holiday celebrating the emancipation of the rest of the African slaves and the first step towards full participation in the American dream. And what a fitting time to really take this next step in that journey. And it's been a special one given, you know, how far we've come when it comes to creating, you know, equality and access to markets. And this has been notable because it's the first time that you have a African American owned bank west of Houston, headquartered west of Houston, and obviously the first in the Rockies, obviously the first in Utah. And I think for that to be possible, it's just a testament to what we wanted to celebrate that June 19th and we will continue to celebrate every year forward which is hopefully more progress in that area.

1:18

And what does it mean, you know, what abilities do you have now that you have that you own a bank? I mean, that gives you a charter and it gives you a sort of mandate and a resource base. But tell us sort of what the vision is.

2:20

Well, you know, having a classification of the bank of a mdi, which is minority depository institution. They're a special class of financial institutions that historically have served the marginalized. And you know that that is a very broad statement, but really when you look at it, you know, we still have some pain points in our economy where MDIs are able to really solve for. And I think we will be a good part of that, that story as well. When you look at African American homeownership, right, and obviously I have another company, Ready Life, that focuses on homeownership. But when you look at homeownership, they're, they're, in a nutshell is to, is the race inequality when it comes to wealth in our country, we have 73% of white Americans own a home, but 43% of black Americans own a home. And that gap is, is what has really created the numbers to show that African Americans have 10% of the overall net worth of white Americans. It hinges on their ability to own a home. And when you look at the approval rates of homeownership and you try to figure out, okay, where are the, the pain points? The pain points have been discrimination and lending. When you look at the top 20 banks in America, meaning that we can call by name, half of them in the last 30 years have been under a federal consent decree and or fined by the Department of Justice for discriminating against women or minorities of all sorts when it comes to housing. And when you look at African American owned banks, they approve African Americans to own a home at 83% when non black banks approve it 43%, which is the national average. So I think when you try to look at what's possible is that there's a leveling of the playing field. So what's great about having a black bank in Utah is that one, there's not enough African Americans in Utah for the bank to exist just off African Americans. So you have to be good at representing and serving everybody. And what's great about that is, is that the playing field is level. If you're not an African American, you can walk into any bank or go on any website that does lending and you probably never crosses your mind that you would may or may not get access to what you're looking for because of your race. It's just something that doesn't make any sense. It doesn't even register you as a possibility that it could happen. But if you're an African American, you absolutely think about that. You think about, I have to be strategic about where I go because some people, because of the color of my skin, historically and verifiably, through court orders up until 2020, 2025, have historically not lent money to me. And so going to a place where you know that at the bottom line I can walk in redemption, and I know that they won't deny me because of the color of my skin. Makes a level playing field for you, for me and anyone else to walk through the door.

2:32

That's great. And I want to come to how you came. You put that deal together and your. Your partnership with Bernice King, Dr. King's daughter. But I want to start back with you. Just how did you, Ashley Bell, come to be a bank owner in Utah?

5:19

Well, Dr. King and I have been working together for several years now, and I think it all goes back to the work that we did together when I was at the White House. I actually was working in the White House on the coronavirus task force and a task force that helped create and implement the payroll protection program, which was instrumental to saving millions of American businesses and the economy during the first phase of COVID And it was implemented through the sba. And I think it was a great testament that the deputy administrator of SBA came to our ribbon cutting and talked about the work that we did together. And during that time, Dr. King and I both noticed that the powerful and the influential, when the green light turned on for the payroll protection plan, which was free money from the government to people to pay their payroll so they could keep the economy going, that those who were the most influential and who are the most powerful were first in line, and the money ran out very quickly. And the rest, the least, the last and obviously left behind, didn't get access to the first phase. And we saw that enormous inequity, and we said, you know, most of these companies that are getting access to big law firms, big philanthropy, all came with massive amounts of cash and savings, billions of dollars in endowments. But because they could use their power and influence, they took advantage of the system and they took the money first. And those that actually needed didn't get it. And the big part of that reason is that the small banks generally just did not have the technology or the ability to do that kind of lift, to help their own, to help their people. So we saw that there was a technological gap that was between the smaller banks, many minority owned, and otherwise. That wasn't just inconvenience, it was existential, existential threat to those businesses by not having access to banks that they could trust, that could get them access to the resources they need. And so Dr. King and I began a journey to figure out what's the best place to do that. Utah has a couple of markers that make it the most attractive, especially for unsecured lending, when you look at a regulatory environment. There's a reason that the biggest office in Goldman Sachs outside of New York City is in Utah. There's a reason American Express is in Utah. It's a reason most of the student loans are in Utah, most credit cards in Utah.

5:36

I have some knowledge of the fact that Orrin Hatch, the former senator from Utah, might have had something to do with some of that to make it such an attractive place.

7:55

Yeah, it is, it is. It's definitely attractive from a regulatory standpoint. And I think that, you know, that's sort of first thing you got to think about when you're going into a highly regulated industry is, you know, give me one less thing to worry about, I'll take it. You know, if you could get one less thing. And I think Utah at the state level, the UDFI has had a historically very good relationship with the banks that are here that are, they're in Utah and there's just not a lot of them. So it's really not easy to get into the state. And so we were looking and came across Holiday bank and Trust, which was a bank that was really well run, really small, but it was clean, it was profitable, it was in a neighborhood, in a community. And Holiday, which is one of the most affluent in America and that was important to us. We needed an economic base by which we could build a platform that was strong and diversified. What separates us from every other African American owned bank in history is that all of the previous banks have operated out of and were birthed out of low to moderate income areas and they were surrounded by a lot of economic challenges that made it really hard for those banks to succeed. But we flipped that on its head and started a first black owned bank in a very affluent area with a great deposit base, with a great regulatory environment and we think the sky's the limit for what's possible.

8:04

Yeah, well, let's just pause on that because there were historically hundreds of black owned banks and they've dwindled, as have many small banks. But the ones that have been preserved sometimes by black investors have, as you said, been in low, moderate income communities and without necessarily the asset base needed. And you went the other way. You went and have a black owned bank in an affluent suburb of Utah. What have you found there? What's been the experience in that almost a year now that you've owned it?

9:23

Well, I think it was definitely a risk. It was definitely. Anytime you're doing something that's never happened before, you want to sit down and study why it hasn't happened before. And I think when Dr. King and I really analyze it, in the efforts that other African Americans have had to purchase and, or move or have their banks located in non majority black areas, the phenomenon of white flight has been to their detriment. Meaning that, you know, if you, if, if you bought a bank in a neighborhood and, and African Americans would have taken control or try to, the people there if they didn't feel comfortable with that leadership or that direction or that preference and ownership. It's easy to just go to your bank and say, I would like all my money out and go take it to another bank. And collectively that's called a bank run. And that's the easiest way to take out a bank is instability and deposits can sink any ship. And so that happened several times in American history. So we knew that if it was going to be possible that we could acquire this bank and not be subject to white flight, then we had to pick a place that had not only a good regulatory environment, but also had a community that would be open to and receptive to the concept that the color shouldn't matter about the ownership, especially when the economics are to the benefit of the people who are currently there. We're bringing more money, we're bringing better technology, we're bringing more access to capital. So there shouldn't be any reason that anyone would leave outside of that. And so we worked really hard for two years. We came to Utah 2020, into 22, spent all of 23, spent all 24, working relentlessly in the community to get to know all the stakeholders, to get to know as many people as possible, to not only invite them to be a part of our journey, but to be a part of our cap table. We're honored that we had some of the biggest names in Salt Lake City and Utah who've been responsible for a lot of the growth and opportunity of the state of Utah join us. And we think that made the difference.

9:59

Well, one of those is well known to folks around Impact Alpha, the Sorensen Impact foundation, and also other local investors. And I remember the Sorensen folks told us they would have invested in redemption, you know, buying a bank anywhere, but because it was in Utah, that made it all the, all the, all the, all the sweeter to have it local.

12:00

Yeah, absolutely. I think, you know, you know, Jim has a lot of impact around the world and he understands this at a level that most people don't. Jim Sorensen and I think that, you know, there's an ecosystem though, in Utah that is very, very different. You know, I don't believe we could have done this many other places, but I do believe that Utah and Salt Lake City is the most likely and that when you take a deeper dive into the sort of like the peopleness of it all, like who are the people there? I think that when you look at the LDS church as a whole, we've received tremendous sort of support from the community, from the church, which is very prevalent and influential in that community and so much so. But in 2024, in April of 24, the president of the LDS Church sat and met with myself and Zach and gave us an opportunity to tell him what redemption was bringing to the market, why that was important. President Nelson at the time, who's now passed, was, was very much a big part of our story to, to, to open doors for us to get to know the people in the community. And I think it's very unique that you have a community of so many people that due to their faith and their, you know, connection with the church, have spent two years, most of them on missions and living in other places and many times amongst marginalized people. So our story wasn't that far and it wasn't that crazy for people to understand because they've seen other communities that have needed help and they've tried to help those communities through their faith. And so such a very unique populace. Like, you don't get that if we tried to do this in Tupelo, Mississippi, you don't get that if you tried to go to Raleigh, North Carolina, but you got it in Salt Lake City. And I think that that, that sort of bedroc of community understanding of what we were up against, but also a strong economic, market based approach and a strong community that's focused, that has tremendous business acumen. You put all that together and then that's when you see the Garth family who is critical to us. Garth Automotive that is huge in Utah is when you saw Gail Miller, who was the original owner of the Utah Jazz, brought them from New Orleans to become the Utah Jazz. And you saw the Huntsman family. The Huntsmans have been, you know, amazing partners. And the Echols family, I mean you have just tremendous names. And when you look at the echoes, just to be briefly, the Eccles are, you know, I think they're, you know, one of their great, great grandfathers was like the first Federal Reserve chair ever in our republic. And so there's just a long line of folks that understand this industry well. And all those things came together to create just a perfect opportunity for us to start and build something special.

12:18

All right, well, what do you need now? I know you're trying to grow and build the assets. Where are you at?

15:06

Yeah. So we bought the bank. We've started our journey. We're eight months in at this point. We're 10% bigger than we were when we started, which is great because it gave us an opportunity to settle and to bring in a new culture, to bring in additional human capital as well as actual capital. And now we're going back to market to begin what we think will be the next, the next phase of redemption. And that is to create more impact and to better reach more people. One of the things that we're doing that I think is just tremendous is we're probably going to go to market and raise out $20 million, which is not a crazy amount of money, but definitely helpful for us. Part of that is going to. We want to be able to do bigger loans. We have a lot of people coming to us that just need more capital than we have the ability to do right now. So we be more impactful. But I think one of the things that really sets us apart is we're launching this Juneteenth, which will be the one year anniversary of the bank, as our King cards. And so we have a card that's coming out called Bank King B A N K space K I N G Bank King. And this Bank Impact card will do something that no other card has really done. And it's sort of, it's being led by our senior vice president for corporate affairs and partnerships, which is Dr. Bernice King, the youngest daughter of Martin Luther King Jr. This is her baby. And so this will be the first card. And with her own words, she talks about shifting people's minds from hoarding points to sort of pushing for and investing in hope. And so when you invite, you and I go to lunch and it's $100 to get lunch in Salt Lake City, instead of pulling out my amex, I can pull out my Bank King card. And in that there's two ways credit cards make money. One is off interest that carries over and the other is on transaction fee. The redemption bank is going to give 50% of the transaction fee to a network of guaranteed income programs for single women who have children that are living in poverty across the nation. This is going to be the first of its kind, consistent revenue stream, supporter of programs that exist all the way from LA to St. Louis to Atlanta, where women who are in poverty have kids can go to these nonprofits that we'll be Supporting through these funds, get a guaranteed letter saying that for the next one year to 18 months, they'll get $1,000 to $1,800 a month guaranteed. What that does allows them to do the first thing that's most critical in breaking the cycle of poverty is many times move out of an area where the school systems are bad, where the crime is high, to a place where they have better school systems, less crime. And then during that 18 months to 12 months, those nonprofits help them with job training so they don't need the guaranteed income at the end. Many of the studies have shown this has been the most consequential poverty breaker in American history. This jolt out of poverty gets people a sense of what it's like to not be in it. And they don't go back. Over 90% of the participants don't go back. The promise that these programs aren't funded enough and there's more demand than we can keep up with. So how do we do that? We help people like you and me who have a great, who want to do good and do well, be able to do that. And how we offset the points is that. That you won't get from Amex is that this will be one of the cheapest interest rate credit cards in the country. We're talking 12% interest. Most people, if you're paying Amex or you're paying whoever you're paying in the 20s, many times depending on. On. On your volume of spending. But flat rate doesn't move. 12% interest rate. And on top of that, half of your transaction fee, which you don't cost you a dime, you get the chance to support people who you'll never know, but who will. What we both know and what we all know is the betterment of the American dream, which is providing more access to opportunity for more people.

15:15

So I think we actually broke some news here, Ashley. The Bank King card coming in June, and I think if people weren't already interested, I think when they hear 12% interest rate, they'll be super interested.

18:56

And I got to give credit to a friend of ours who came up with that name is actually this guy

19:09

who, as David Bank, I'm entirely in favor of it.

19:13

That's good. That's good, that's good. There's a friend of Dr. King's who I got to know. Tyrese, came up with the name of that guy from Fast and Furious. He came up with a call one night, so I got to give him credit for the name.

19:18

Well, just pause a little bit. And I know you're partnered with Bernice King on redemption. And Dr. King, in one of, I think his last addresses was talking about black owned banks. So there's a definite through line to this redemption.

19:30

Yeah, absolutely. Dr. King's final speech in Memphis, he called out a bank by name. It was Tri State bank, which is now a part of Liberty bank, which is a dear sister bank of ours. And he talked about a banking in movement. But that banking in movement was just a call to action to say, bank your values. If you are banking at a place that supports policies that don't allow people to have access to a free market and free systems, then if you don't believe that, then you should make sure you should put your money in a bank that does align with your values. If you're banking at a place that historically hasn't give women and minorities opportunities to get access to the American dream and to capitalism, then maybe you should pick a bank that does. And so what we're just trying to do is continue that message and say that redemption is an opportunity for you to bank your values. We all are capitalists, but we have to make sure and we have to work hard every generation to make sure capitalism can get one step closer to working for everybody. We started off this American journey with a capitalist system that 15% of the population wasn't free, and that means they had to work for free. That's not capitalism. We had to go to a point where women couldn't own property. That's not capitalism. We're getting closer. But to do that, what we can do, all of us, is look in our wallets and make sure that the financial institutions that hold our hopes and our hard earned cash are doing their part in making sure that everybody has access to America. That's going to unlock so much potential for our country. $1.3 trillion, we know, doesn't make it to our economy because of these missteps that financial institutions make and not allowing people who are worthy of credit to get it. And we can do our part to change that.

19:50

Okay, Ashley, let's just take one beat on Ready Life. I know it's another venture that you're involved with and we've been tracking home ownership as a path to wealth building, as you say. And Ready Life has got a take on how to unlock some of that wealth.

21:33

So Ready Life is a public private partnership with local land banks. And so what you see, what's great about our economy is that we have a bunch of small micro economies. So we've been Focused primarily in the Midwest. Cleveland, Ohio is where we kind of got started. The point there was that you had places like the old auto belt, places that used to have tons of people working there. But because of the cost of labor, because of a lot of issues with the automotive industry, a lot of those companies moved to, right to workstates places where the labor restrictions and what that did was leave massive amount of abandoned homes and dilapidated homes where people moved out and never came back. Well, what we're doing is we're going into those communities that have an oversupply of homes that have been dilapidated, that are in disrepair, that the government has taken either through state eminent domain or through local tax forfeiture. And we go in and partner with the local government and say, hey, we will take some of these homes off your books. We will use hard money private capital to rehab them and we will sell them to local people below market rate. And the reason we sell it below market rate, and let's use easy numbers, we just sold a house the other day that was, you know, it cost us a hundred thousand dollars to rehab it. It cost 250. It was appraised at $250,000. When we were done, we sell it for 190. Now we can do that because we're not developers. We're not the fix and flip. Let me get every dollar that's extractive out of this home. Our job is to do one thing that's clear and that's to get people who can't afford a home to live in a home. So when we fix the house up and the government helps us do it, we reward the government for that partnering with us by saying, I'm going to offer this to somebody from below market. And by offering it below market, that means that these people have 20 to 25% equity day one. And when you have 20 to 25% equity day 1, you don't need a down payment. And the credit restrictions and the ability to lend become way more flexible because you just completely de risk the whole project.

21:50

So sometimes people think we don't provide enough news you can use. But on this one podcast, we've got 12% credit cards and below market homes. But that's a tremendous opportunity, Ashley, for preserving and creating sort of affordable housing and home ownership. So hats off on that, Hats off on Redemption. We're going to be tracking both of those stories closely. So we hope you'll come back on the podcast and keep us in the loop.

23:51

Absolutely. You can follow us at Bank Redemption to keep up when we drop the King card and also at ReadyLife US. Both platforms will be talking about when this stuff gets dropped, but Bank King Card June 19th will be when it goes live. But you can. We'll start letting people sign up pretty soon, so really appreciate the opportunity and thank you for letting me be with you today.

24:23

Thank you so much, Ashley. Great to see you.

24:40

You too.

24:42

That's going to do it for this Agents of Impact podcast. Big thanks to Ashley, to our producer, Isaac Silk, to the whole team at Impact Alpha, and to all of you agents of Impact, with gratitude for all that you do.

24:44

Sam.

25:07