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Black and Latinx communities have been disproportionately affected by the coronavirus pandemic while facing challenges throughout the economic crisis. For Berkshire Bank’s Malia Lazu, community banks will have a key role in working with these populations to help them rebuild and thrive in the economy.
“I think it’s critical for banks to sit and listen, and then whatever is planned, it’s planned in partnership with the community,” Lazu, Berkshire Bank’s executive vice president and chief culture and experience officer, said during an online town hall event last week about the economic impact of COVID-19.
Berkshire is based in Boston but maintains a substantial presence in Connecticut.
The town hall was one of two panel discussions on June 4 and 5 hosted by Berkshire Bank’s Reevx Labs that focused on rebuilding Black and Latinx economies.
During the discussion about the Latinx economy, Lazu said community banks should listen to the priorities of those in the community before trying to act on solutions. The relationship between community banks and Main Street businesses creates an opportunity for them to work together on these priorities, she said.
Among the issues affecting Latinx communities is predatory lending, as undocumented people in particular need to use these services. Lazu said banks, nonprofit organizations and the government could work together to give community members relief from these expensive services.
Lazu also said CDFIs could serve as a ladder to help unbanked communities into the banking system. She added that community banks, CDFIs and minority depository institutions could partner to provide more opportunities for people of color in their communities.
The Paycheck Protection Program was also discussed during the town hall. Especially during the first round of funding, many Black and Latinx businesses were left out of the program. Lazu pointed out that the program involved banks and government were working together, two institutions that people of color often don’t trust. She encouraged businesses to still apply for loans.
Nathalie Molina Niño, an entrepreneur and investor, recommended to Texas Rep. Joaquin Castro, who was also on the panel, that small PPP loans should be automatically forgiven so that business owners did not have to put time and resources toward the forgiveness process. Castro acknowledged the need for flexibility but said there were concerns that scammers would take advantage of the program if forgiveness was too lenient.
