Are Credit Scores Racist? with Ashley Bell

Today's episode features Ashley Bell, CEO of Readylife, a new Black-owned bank that is making homeownership more achievable for those often left out of the global economy. 

 In this episode we discuss:

• the racist history of the American banking system
• the truth behind how credit scores are created
• how homeownership is a key component for racial equity

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Transcript

Speaker 1    00:00:01    W.E.B. DuBois said that it would've been better if African Americans had have been slaves 10 more years, rather than have their Freeman's Bureau closed. And the psychological effect that would have on African Americans for the rest of the time they're in this country. And that is what's been passed down since 1874. The 2022, A distrust that has been reaffirmed over generation.  
Speaker 0    00:00:27    Please listen carefully.  
Speaker 2    00:00:31    Welcome to Critical Conversations. I'm Abbie Henson, your host and an assistant professor of Criminology and Criminal Justice at Arizona State University. This podcast is a space to learn from change makers and experts on racial, social, and criminal legal issues, and to inspire further dialogue with friends, family, and community in order to impact culture and ultimately achieve equity and justice for all. I hope you enjoy being part of these critical conversations. Now, let's get into it. Today's guest is Ashley Bell, c e o of Ready Life, a new black-owned bank that is making home ownership more achievable for those often left out of the global economy. Today's episode provides a deep dive into the racist history of the American Baking System, and introduces an innovative new strategy for enhancing generational wealth in minoritized communities. I've found this conversation fascinating as it's a topic I don't know too much about, but it really fits perfectly into this broader narrative we have of social and racial justice as economic justice is a key component for equality.  
Speaker 2    00:01:43    I hope you enjoy this episode, and if you do, I really hope that you leave a review because it's one of the best ways to enhance the growth of this podcast. And if anything comes up for you that you would like further discussion on, please email cc office hours@gmail.com. And don't forget to check out those breakdowns that Joan and I do in our YouTube series, office Hours. The link can be found in the show notes. Okay, let's get into it. Your current venture right now is Ready Life. What exactly is the tagline of Ready Life?  
Speaker 1    00:02:17    You know, the tagline is Pay with Ready, own a home, no credit score necessary. And when you unpack that, it's offering a pathway, a new pathway to closing the racial wealth gap in our country through providing access to, you know, the anchor of wealth and a system like ours, which is the ability for people to own their home. And it's a company that we founded that I founded with Dr. Bernice King, who is the youngest daughter, Martin Luther King Jr. And the current c e o of the King Center for Non-Violence.  
Speaker 2    00:02:48    Can you talk about why this is important, particularly for minoritized communities and kind of give the history on mortgage lending and home ownership in America and the racialized history in particular.  
Speaker 1    00:03:03    It's not just, it's, it's not just mortgages, it's the concept of credit, right? Right. Um, the concept of credit is the foundation of what our banking system is built on. Um, when you have a capitalist system, it is built on the ability for money to flow and multiply, and credit is how money multiplies. And so credit is like water where you see credit flow, things grow. When you go to a community that does not have access to credit, then you don't see opportunity growing in those communities for the people that live there anyway. So when you take that concept, the credit is like water. And you go back to that being a fundamental premise behind building a capitalist society. You, you, you go back to 18, uh, 72 where, you know, uh, around that time Congress debated and eventually passed the Freeman's Bureau. And for those that don't know who the Freeman's Bureau is, it would technically was the first bank for black people in our country.  
Speaker 1    00:04:02    And this bank was built to do something that has never been done before, which is to take people and turn them into capitalists. And that means that people that once were assets on the balance sheets of corporations and people of farms and cool, were capital, and then you tell them that now they go from being capital to becoming capitalists. And so there was this great idea that to take these people and educate them on what it means to be American in the sense economically, then we gotta create a bureau, a freedman's bureau for Freedman. And this bureau would do one part education, teaching them, uh, how to be frugal, how to save, and then it would create a Freeman's bureau bank that would allow them to put their money into an institution. So the Freeman's Bureau was created to be the first black bank bank for black people who were recently incarcerated.  
Speaker 1    00:04:50    And so the issue begins with the formation of this bank. The bank was prohibited by law from extending credit to free slate. All it could do was create savings account. Hmm. So knowing very clearly the creation of credit is how wealth is created in our country, it was denied from free slave at the outset. And so then this bank becomes a savings without loan institution. And, you know, a lot of Freedman's bureaus popped up around the country, close to farms and plantations to educate folks. And it worked. People, African Americans got, you know, inspired by it. They saw pictures of Abe Lincoln on flyers across the country, and they said, look, this is, wait, let's, let's put our money that we're saving from Sharecrop into these, this, this bureau. And the bureau started losing money. So Congress, you know, decided, well, why don't we go get a, a black person actually run this black banker?  
Speaker 1    00:05:37    They went and got the great abolitionists. Frederick Douglass. Frederick Douglass does not know anything about banking, but in according to his own words, he said, you know, I felt obligated. He said, I walked by the Freedman's Bureau in DC and I saw these black people that were in nice suits, and they were tellers, and they were educated and black people bringing their money. And I felt like, I don't know anything about banking, but it, it would behoove me to figure out a way to figure this out to lead this bank. So he goes in there and doesn't understand much about banking, but he says, what I'm gonna do is take $10,000 of my own money. And that just goes to show Fred Douglas was a very successful man. He takes $10,000, puts it in a bank, and just watches where it goes to see what happened to it.  
Speaker 1    00:06:15    Mm-hmm. <affirmative>. And he, he traced it and saw that his $10,000 ended up speculating on land out west to build rose in junk bonds ultimately. And so once he realized that the money of free slaves, and at the time the Freeman's Bureau held 80% of all black wealth in our country, and he realized that it was a P scheme, he goes to the floor of Congress and tells the United States Congress, I can't, in good conscience, I ask anybody black to put any money in this bank because the money is being thrown away and it's not really there. Mm. Congress listens to him. And in 1874 with the stroke of a pen, the Freemans bureau was abolished. And no former slave got a dime back. The Freeman's bureau at that time had 80% of black wealth, and it all evaporated with the stroke of a pen, Jesus. And when it, and when it evaporated with the stroke of a pen, w the boy said, and one of his most under heralded lines, but it, it, it, it goes to where we are today. W Dub said that it would've been better if African Americans had have been slaves 10 more years, rather than have their Freeman's bureau closed. And the psychological effect that would have on African Americans for the rest of the time they're in this country.  
Speaker 2    00:07:33    Mm.  
Speaker 1    00:07:34    And that is what's been passed down since 1874 to 2022, a distrust that has been reaffirmed over generation.  
Speaker 2    00:07:43    Right. So essentially there was no opportunity for credit, all of this wealth evaporated. And then following that, in your perspective, why has it remained so difficult for individuals who are minoritized to get a credit card, to gain a credit score? Why is there still this block?  
Speaker 1    00:08:06    Well, you know, a big part of that is you've had since then, the civil rights era was able to achieve significant gains in the access to the ballot, but still not access to credit. And so what you saw was the creation of hud and in the creation of hud, the housing in, in urban development agency, and the ability for the government to subsidize home loan and the subsidization of home loans created what we call suburbs today. Right. They created white flight out of inner cities where poor black folks and now, you know, brown folks and black folks to move into inner cities, into neighborhoods that were abandoned by the white families that lived there to create suburbs. And those suburbs were created by housing that was guaranteed by the government. And it wasn't until the late seventies, early eighties that African Americans became eligible for this product.  
Speaker 1    00:09:01    So you legally had on the books, federal, federal regulations that prohibited African-American ability to get loans that are government guaranteed that other people had. And so this is, this is what redlining comes in. And for those that don't know, redlining essentially was areas where loans couldn't go. Where if you, if you had a house inside of Red Lines, your house could easily depreciate because it was in that red line defined by the federal government and decide and defined by the banks. And so, as you know, I, you can't finance a depreciating asset if it's a house like that. Like cars you can do all day, but nobody's gonna give you a mortgage at any interest rate if the value of your homes going down, not up. So it created this impossibility because African Americans had a red line drawn around them. It created this impossibility for them to create wealth through home ownership.  
Speaker 1    00:09:50    So even when redlining was abolished, you're so far behind because the house that you're living in has been depreciating over the last four decades and not appreciating like everybody else's. This is, this is sort of the underlying pin of where we try to catch up. Right. But then today, you fast forward today, and I think that what's important is that my generation of 41 years old, and I think, um, many people in our generation because of Covid, are awakening to the current discrimination that is still in banking. And, and what Covid did is Covid shined a light on the inequities in our healthcare system, in our banking system, and even in education. And in all of those things, African Americans and Latinx Americans were all at the most vulnerable at those, at, at those, those stats. And so when it comes to lending, what you saw was, and I was at, in the middle of this, you know, working on the PPV ppp, and this is my story working with, with black banks, what you saw was P p P was first rolled out and the big banks were, were calling the people who they wanted to get the first round of P P P, literally calling them, saying, Hey, PPPs coming out.  
Speaker 1    00:10:55    We'll get your application. We'll get it done for you. Get it back out. Now, most of the people that got called did not look like me, did not come from communities. I, I I come from and represent. And the black banks, unfortunately, because they had been under capitalized and they represents such fragile economies, did not have the technology to jump in like JP Morgan did, and send out a hyperlink and upload everybody's stuff. You had black banks representing poor black churches and poor black businesses and some businesses that weren't poor and were making money didn't matter. They had to do their P P P loans by hand, and they're trying to mail them to DC and by the time they got faxed or mailed in, the money was gone from the first Trumps. And that sort of highlighted the fact that, oh, there's two totally different systems.  
Speaker 1    00:11:38    So we get here today where 60% of African Americans in this country go to bed in a house that they don't own. Mm-hmm. <affirmative>, 60%, 56% of Hispanic Americans go to bed under a house. They don't own 30% of white America. So when you look at this and you think of what that actually means, all of the reason that number is 60% is because of what I talked about in the outset. Right. Credit is like water. Those 60% of Americans, black Americans that don't own a home, majority of them live in communities where the people in those communities don't have access to credit. Mm-hmm. <affirmative> and digging into that, to the point that we created Ready Life, even if they have the credit, how many headlines have we seen where African Americans with credit scores and the equal income have still been denied access by the current institutional structure?  
Speaker 1    00:12:29    To, to, to, to hit this nail on the head about why we believe credit scores should not be considered. We believe that credit scores are inherently discriminatory. And the reason that they are is that credit scores are not a reflection of your ability to pay back or mine it is me or you versus everybody else. It is a average against you and everybody in the system. So at any given moment in America, 700 is deemed a good credit score. So if your credit score is over 700, you're deemed to have good credit. But way the credit score system is set up is that 50% of Americans will always have over 700 credit score and the other 50% will have below. Hmm. So if you got a system where you got half are good that you told are good, and half you're telling are bad, where do you think the black and brown and marginalized people are?  
Speaker 1    00:13:20    What half they in? Right? And so when you look at that and you realize that the majority of black and brown folks are on the bottom half of that, and then you try to say, well, I mean that's not, that's fair because you know, they, maybe they didn't pay their credit cards, maybe they didn't do this and that. But as long as the facts show that this country always has economic cycles, it's just part of being in a capitalist structure in a global economy, you're gonna have ups and downs. But every time there's an economic downturn, like the one we're about to see, every time there's economic downturn, like the one we're about to see, African Americans are the first to get fired and the last to get hired back. So if it is inherently the case that black and brown people are the first to get let go, then that means when they get let go, when the recession hits, they can't pay their mortgage, they can't pay their rent, they get behind on credit cards, they get behind on other bills.  
Speaker 1    00:14:10    And so inherently in the system, the credit score does not take into account those things that these people can't help. And so you have a system that puts most of black and brown people on the bottom half, which all that does is say, Hey, you know, for a lot of you, you got 6 26 40 credit scores. We'll give you a loan, we'll give you a loan, however, we're gonna charge you more for. Mm. And that is why it makes it unique in this country that being expensive is poor. Uh, it is poor to be, it is poor to be, I mean, I'm sorry, lemme say it is expensive to be poor it to be poor. You got me. That's exactly what I'm trying to say. Because the lower your credit score, the better their excuses to charge you more money. Right. So, so this is why we don't use them.  
Speaker 1    00:14:53    So we don't have to use 'em. So what we do is, you know, what Radio Life does is we say, look, credit scores, concept is trash. So what we're gonna do is we're gonna ask you questions that actually matter mm-hmm. <affirmative> and actually tell us, give us a better idea of if you can afford a mortgage than a credit score. So we think our system is more secure as it tells a better story of who you are. And how we do it is if you're a renter and you're living in Tempe or Tucson and you say, look, you know, I'm paying $2,000 a month or a three bedroom and we see over six to nine months that you've paid your rent on time, you paid, you know exactly what was asked of you and you paid through our systems, we can count it and you direct deposits.  
Speaker 1    00:15:29    So we see that you got income coming in, we will say to you, we're gonna approve you for a mortgage based off of your monthly ability to pay. Not, you know, just a bigger picture. But we're gonna say, if you can pay $2,000 a month in Tempe, then you can afford a $2,000 a month mortgage. And here's the key, we, for us to create transformational change, we know we can't ask people to do things totally different than what they've already done. We're asking people to do what they're doing anyway. Just do it smarter. If you do it with ready, if you bank with ready and you pay the same thing that you're paying with Ready, we just give you, we think it's a better benefit for people to get a house. Then they get 1% cashback on a debit card, just to make any sense to me.  
Speaker 1    00:16:10    Or no percent cash back on debit card. So for us, we take that $2,000 that you're paying for rent and we give you a mortgage, but that includes your principal interest, PMI of necessary appliance insurance. So you know exactly what you're paying. And we don't, the reason we can do this is cuz we're not asking banks to fund this at the outset anyway. We're getting the money from private equity and big company balance sheets to say, look, these folks are good for it because they've already done it. Right. And it just logically makes sense that if I'm paying $2,000 a month for, uh, my rent, then I have even more incentive to pay the exact same amount of money if it's creating wealth for my family. Right. And I actually own it.  
Speaker 2    00:16:49    How long would they have to pay on time in order to get  
Speaker 1    00:16:53    Approved? It varies, but here's some of the criteria that depends on what makes it shorter or longer. Ok. So a big part of what we have to do, and Dr. King has been a big advocate of this for a long time, is that you have to pree people before they get into a house. You want 'em to know exactly what they're getting into. You don't want 'em getting in and try to figure it out. So for us it's about partnering with third parties as well as some of our own content about educating people on how to be better with money, right? Mm-hmm. <affirmative>, the, the concept of the Freedom's Bureau was trying to do, but it just had no end, it had no positive end for folks. But it was a concept of let's just educate you on basic fundamental financial literacy. That's important because how we underwrite you, it's gonna depend a lot on things.  
Speaker 1    00:17:33    Like if you get paid on the first and 15th of every month, if it gets to the 14th of every month or the, or the 31st and you only have 13 cents in your bank account, then we're not saying we won't underwrite it, but we're just saying I need a longer track record. Right. And you living that close to the edge before you miss out on paying your rent. Right. But if you're somebody that's got $300 in their bank account at the end of the pay period, then I'm like, okay, well this person's managing the money and they're not living so close to the edge. Right? And so our algorithm will be able to dictate that. So, but if we see you're that person that's living on the edge of 13 cents before we pay period, then that's the person we want to take financial literacy classes to understand about how better to save.  
Speaker 1    00:18:15    Right? But not just understand how better to save. But we also will offer them other product. We may say, look, you know, maybe you need to refinance that car that you've been paying off for four years cuz you got a 12% interest rate and you may could get a nine and that could save you a hundred dollars on your payment and maybe you can use that money to save and not spend on something else, but to save that money. So this is the conversations we have to have in educating people because we think that you can completely underwrite off of cash flow. There's, there's nothing more accurate about someone's ability to pay than how they spent.  
Speaker 2    00:18:47    Of course you've kind of skirted around, but can you speak to why exactly home ownership in particular you find to be so important?  
Speaker 1    00:18:56    Yeah, that's a, I mean that's a great question. You know, at the bottom line of it is that, um, it's what's created wealth in this country. And at the core of it, African American at today's date, I have 10% of the wealth as white Americans. And that 10% is because African Americans don't own homes and haven't owned home for generations like a lot of their white counterparts in this country. And cause they white counterparts have owned homes. The federal government has tried relentlessly since Nixon to really deal with this issue. But nothing has changed on the actual numbers as far as home ownership that's been beneficial or something to clap about in the black community when, when your grandparents own a home, well first go back to the GI Bill. The GI Bill provided incredible opportunity for white soldiers to come home and own a home.  
Speaker 1    00:19:41    But it didn't apply to black folks in many instances. They weren't eligible to get it. So you, if your great grandparents own a home and they pass away, it goes to their kid, they can sell it and put equity into roll it over into their home. And that rolling over of equity and appreciation of, of home values creates wealth over time. The most stunning statistic to show you the issue is that the average African American homeowner in America today, the average age of African American homeowner today is 48 years old. And so if you're 48 years old and you own a home and you're a black person in this country, but the average lifespan of an African American is 75. Right. Which means if you sign a 30 year mortgage, you've outpaced your whole life. Mm-hmm. <affirmative>, y'all pay. So the fact that the average homeowner age for every other race of folks is a decade to 15 years younger, just speaks to the fact of how long it takes us to accumulate wealth in one generation versus what everybody else has done over time.  
Speaker 2    00:20:44    Right. Right. And we also see that in terms of just neighborhood stability investment in, uh, afterschool activities and just public school in tax credit, right? Like all of these things are tied to home ownership and st like residential stability. And so we also know that not only does home ownership increase individual wealth, but it also creates community health in a lot of  
Speaker 1    00:21:16    Ways. Absolutely. Yeah. A absolutely, you know, Dr. King, you know, my co-founders says that in our TV commercial, when her father talked about the inseparable twins of racial and economic injustice, you can't separate racial injustice from economic injustice. They're one and the same Where you find one, you find the other. And so because of that, when we try to talk about mortgages, from my perspective, we get to the point of looking at, okay, well in covid people got forbearances on their mortgages because nobody wanted to see people get behind, uh, when their jobs were laying off or they couldn't go to work for us at the outset of getting a mortgage, it's not just giving somebody a mortgage, but it's also giving 'em a mortgage that can set them up for success. So why not in a mortgage of the future should you not have three forbearances built into your mortgage?  
Speaker 1    00:22:04    Because that way when you have a tough time, and it go back to what I said initially, that as long as black and brown people are the first to get fi fired and the last to get hired back, when that happens, they shouldn't be caught behind the eight ball and have two mortgage payments they have to catch up on when they get a job back. You should be able to say, all right, I just got laid off. I need help and this mortgage payment this month, I need to move it. And you get three. So you're being responsible, but you're also saying, all right, I'm gonna just take this one mortgage payment and move it to the back of my mortgage. Mm-hmm. <affirmative> of my 30 year fix. That sort of flexibility was available during Covid cause everybody needed it. But now that we're back to, some people need it, people don't wanna think of that way anymore.  
Speaker 1    00:22:46    It's not as important. But the crisis persists for people of color. So we have to think about all the things that we learned when we all were in crisis to bring that sort of logic for all the justice advocates out there, no matter what your field or industry. We all saw emergency measures being taken because of Covid in every possible way. But the crisis continues in our communities. So we have to take some of the things that we can show policy makers, Hey, this is what you did when there was a crisis, but guess what? There's still a crisis for these people. These ideas still can help create the equity we want. If we recognize the fact that the crisis is still lingering for too many,  
Speaker 2    00:23:25    Those who have felony, misdemeanor, whatever, a criminal record, is there any kind of screener for that? Or are you just all accepting of anyone who wants to bank with you?  
Speaker 1    00:23:39    Right now? Our policy's gonna be seven years from the, if if you're, if you're done with your probation, you're not on probation, you're not on parole, you, you're done with that. Let's say you're done with that and you are seven years away from the commission of the felony. Felony is all we're talking about, then it doesn't matter. Mm-hmm. <affirmative>, as long as you're not currently on probation, on parole and you're seven years out from the commission of the felony, then we won't take into consideration at all.  
Speaker 2    00:24:06    Okay. And what about if you are trying to become financially literate and you wanna learn and yet you just got out of prison, you're trying to get your grounding, you are newly employed. Is there any way to work with Ready Life despite the seven year contingency?  
Speaker 1    00:24:28    We try to meet people where they are and so we partner with other entities that are in that space. And one for people who recently got out. I mean, it just depends on the type of crime, right? If it's something that is non-violent, that's a lot easier to work with. And so if it's a non-violent crime, you can go to companies like Pad Split, which are, you know, partner companies, uh, of ours that we work with. Pad Split is really good about finding rental opportunities for people who are formerly incarcerated to, um, do some really innovative things around putting them in a home and renting and building a rental history. And we would like to hope that as people rent with pass split to kind of start off renting a room or renting par part of a home, um, through a safe, uh, measure where they use algorithms and analytics to put the right personality types together with a very organized structure and, you know, offer very affordable housing.  
Speaker 1    00:25:20    And really with that, that's for second Chance folks. And then living in a world where far too many people have to drive too far to work because they can't mm-hmm. <affirmative>, they're priced out of the communities where they actually do work mm-hmm. <affirmative> and past what really leads into that. Um, it's hard to tell teachers that you can teach my kids, but you can't live in my community. Yeah. So this gives a chance to, to bring those government workers, public service workers, teachers, firemen, guys that are, you know, just, and women that are trying to just do jobs in these places, an opportunity to live there. And so that gets you a good rental history start. And we like to think that those folks can come on the ready and once they get a good rental history, then that can set them up to not use Passport and go into a normal apartment or a place they could rent of where we can get them on a track to home ownership.  
Speaker 2    00:26:02    And so how was that seven year period decided upon? What, what went into factoring that in?  
Speaker 1    00:26:09    You know, a lot of this stuff is just trying to negotiate with investors about the paper and the risk they're willing to take. But I think, you know, from my perspective it was, look, if it's a nonviolent, you know, crime and, and, and for a lot of people, let's just say it's seven years from the commission of crime. I mean, Al Alice Johnson is, is on our board, right? And you know, Alice did 20 plus years, you know, Alice is in jail so long that she got out and didn't even have a credit score. But when she got out, she wasn't on probation, she wasn't in parole. So many times for people that have done significant time, the seven years won't even matter mm-hmm. <affirmative> because they've already either served five or six from the date from the crime because they we're counting from the date of crime was committed, not when we  
Speaker 2    00:26:52    Got out. Oh, I see. Uhhuh <affirmative>.  
Speaker 1    00:26:53    Ok. So, so for most people that time is marginal because, got it. It's from the date that it happened. So I, I used to be a public defender. I didn't add that to my resume. So I was a public defender when we, when I first got started. And, and I know that by the time someone commits a crime, they're go into trial and appeals and all that. You lost a year and a half already. So let's just say from that point, in the time they do after that, we think that gives comfort to our investors to say, look, it's not about the sentence you, you wanna have distance from when you believe the crime was committed. Right. Not from the end of the Senate Inc.  
Speaker 2    00:27:24    I think what's hard that's coming out of this conversation right now is that while you are a black-owned bank, you're still trying to appease to predominantly white private equity spaces. And so do you feel like hopefully Ready life and what you're trying to do is going to kind of shift the cultural perceptions that some of, not necessarily your investors, but just generally investors have in terms of thinking about potential clients?  
Speaker 1    00:27:59    Well, I think that, um, we, we gotta be honest with ourselves and, and I'll say this very bluntly, you know, I don't have to go to big tech or to big businesses or private equity to get these mortgages. Nonprofits can stand up as well, other entities that may have a larger and more robust thought process around justice, they can buy these mortgages too. So if you got a nonprofit out there, you're in a, a place where you're like, Hey, I wanna, I got an endowment and I want to help people. You can buy these mortgages from us, hold them on your books. Mm-hmm. <affirmative>, make money off of them and have an a back buying appreciating asset. We'll work with you to have much less criteria <laugh> criteria than what we're talking about. So the thing is that I think that as we look for the nonprofit world, if you're listening to this and you're like, Hey, I wanna be a part of this, you can come to Ready and say, look, I would like to purchase single women mortgages.  
Speaker 1    00:28:54    If they're a single mom and they have a, they they're getting a ready mortgage, let us purchase that. Mm-hmm. <affirmative>, then that can, we can tee that up and sell that to your foundation. You can hold two 3 million of those mortgages. You can make money off of those mortgages and create capacity for us to go get more. And if you're really thinking about it, what is your endowment investing in that you're, you know, not you're gonna get a better return than a five to 7% return on a mortgage that you know is guaranteed, no stock is guaranteed and you're gonna invest in those. There's nothing you're gonna be able to best in better than real estate that has a secure asset behind it. So I, I tell folks, look, I'm going, you know, let tech, big tech and these balance sheets lead the way, but at the same time I'm pitching the nonprofits who are in the justice space to come get a piece of the pie so that people can have an access to, uh, some ownership.  
Speaker 1    00:29:41    If somebody came in right now and said, actually I don't care at all about the seven year rule. I just wanna help people get out and let them, you know, put them to a program where I know they'll be educated, that they have a chance set up for success. And I will absolutely work with that nonprofit to lessen our rules to get them these mortgages. Because that is exactly to what you're talking about. That is exactly how the future should look, is that if we're going to all be in this space, we gotta understand that if you wanna make tremendous impact, if some big foundation came and said, look, I wanna show the world that a hundred people who are recently incarcerated can pay their mortgage on time and own a home and have a great story to tell. That is what would change the whole industry. But somebody's gotta take a chance on 'em. And I think this is where we all have to put the onus on ourselves in this space, to your point. So we're not always dependent on other people being able to dictate the rules. If we believe that justice is economic justice is inseparable between the racial injustice, then this is where we step up.  
Speaker 2    00:30:39    Right. I mean, do you see this model as kind of the future? Like, do you ever envision a country where credit scores are obsolete and we start looking tracing Yeah. Spending,  
Speaker 1    00:30:54    Yeah. I, I honestly believe that what we're doing is at the beginning of a movement, I don't think anybody is gonna be doing a mortgage with a credit score in 10 years because, you know, I think what we're doing is focusing on middle class folks in the underserved, but I think my, my competitor that will enter the marketplace and probably 18 months or less, is gonna be somebody who's doing this from the top down. Um, high net worth people because it's just easier. Mm-hmm. <affirmative>, it's just easier to do a loan with private money than bank money. It's whole lot less paperwork, whole lot less headache. Everybody who's ever bought a house will tell you it sucks. It, it's a horrible process. People want it to be sim simple. Yeah. So somebody's gonna come in with a big check on the private equity side and say, look, let's go to all the people who would have a 800 credit score anyway that have incredible balance sheets and let's just finance them to buy homes with us a whole lot quicker and cheaper.  
Speaker 1    00:31:53    Cuz lemme tell you, this idea technically exists now for commercial properties. And this is sort of where we got the idea from. A lot of banks realize after 2008, uh, crisis that it was too difficult to underwrite commercial buildings. So the banks created private equity funds and financed commercial buildings with their private equity funds. So they didn't have to go through all the regulations that they had to working with traditional banking rules. Mm-hmm. So all we did was take what the big banks were doing anyway for commercial real estate and apply it to middle class affordable housing. Right. You know, I think the, the funny part about this, like sad, kind of funny if, if there's a such thing as that, the issue for many people are issue for many people of color is non-essential collections. And I give you an example, there's, that's what hurts many people of color is that they'll have some bill, sometimes it's a healthcare bill.  
Speaker 1    00:32:46    So it is essential to their health, which is a problem cuz that just underlines the fact that, you know, we don't have accurate healthcare system. So you have people accumulate debt cause they get sick, but then you also have things like you switched cell phone companies or something and you didn't pay the last bill. And so you get a collection. Right. But the most, the most, the most obvious, which is crazy, is that it's gym memberships. You got people that you know, just, you know, after the holidays you eat too much. January comes around February, you like, look, I'm gonna go get this, this gym membership. And they're like, oh, it's a promotion. First three months are free, it's 10 99 after that and you gotta pay 10 99 a month and people will sign up for it. Then when that march hits, they don't pay the 10 99 and they don't even go back.  
Speaker 1    00:33:30    Cause you know, they just, you know, gyms make most of their money through January and March when everybody thinks they want to get ready for springtime and then, you know, it kind of fades out mm-hmm. <affirmative>. But they still will report you to collections and your credit score can't discern whether you owe the gym $80 or you owe the car dealership 8,000. Mm. It's the same thing. You're gonna take a 40 point hit for not paying your gym membership the same way you're gonna take the same hit if it was thousands of dollars not paying someone else. So those sorts of collections in a person's mind, they're like, well that's not essential. I just didn't go to the gym, you know? Mm-hmm. <affirmative>. So I don't, I don't think about it. And then the credit score system tells you, well, that's gotta be your credit score for seven years, or you gotta go pay it and negotiate them taking it off.  
Speaker 1    00:34:21    It's up to them. So this is why there's absolutely nothing that can go into in, in February, uh, of you not paying your gym membership. Why does that have anything to do with you buying a house? Right. It should not, it fundamentally should have nowhere in the conversation. But, but Dr. King and I pretty much settled on is that, you know, you got the, the existing system can be tinkered with, but we can't just advocate for justice to policymakers advocating just for justice. Over the last, you know, a hundred years of policy in this country has gotten us where we are, which is, home ownership is exactly the same way. It was the night our father was assassinated, the night our father was assassinated. We had 130 plus black banks. Today we've only got 18. So advocacy has only gotten us so far. We are gonna also have to innovate our way outta this.  
Speaker 1    00:35:11    We're gonna have to create things that don't exist. Yeah. And do it in a way that takes advantage of a free-market system, but also use it in a way that's impactful. And we, and we saw an opportunity, you know, when you, when George Ford was assassinated, you had over 50 billion of announcements that came from corporate America proclaiming that we should live in a better world than to see a man unarmed, assassinated on tv. And if we believe in that from all these big corporations, they say, we're dedicating this amount of money and this billions of dollars to equity and, and, and supporting black lives. But that announcement season came to an end and now we're at the, the season of accountability. Mm-hmm. <affirmative> like, where is that money going? Mm-hmm. <affirmative>, what is it going to do? Mm-hmm. <affirmative>. And so I think it's an onus on us and the justice community to have innovative ideas on our own instead of just saying my same thing I've been doing needs more money to do what I've been doing.  
Speaker 1    00:36:10    We gotta come up with something totally different and can't be afraid of stepping into that white space. You know, the system, like I said, I I stick to this, you know, the capitalist system is, is not perfect because it can be, it, it can be extreme and those extremes, it can be, there can be cruelty because of human nature. Right. Uh, capitalism is, is creates inequities because of people and, and, and, and, and what people do, uh, with greed and with, uh, an inhumane heart to operate at the disadvantage and destruction of others. Right. But if you put us in a situation where people of color can use capitalism to liberate themselves, it could give us some parody there. Uh, but the challenge has always been access to capital. Right. You've just got to have access to credit and capital in this country to really move it the ne move the needle economically.  
Speaker 1    00:37:01    And so in this post George Floyd world, we have a small window of time that is, this hourglass is running out very quickly to be able to create generational change in a country that right after George Floyd was hot on the issue of supporting black lives, black women, black people. And that is fading at an astronomical rate. So we can't make like forever changes right now. We're gonna miss a window. It's gonna be what, you know, what Michelle Alexander talked about, you know, in the new Jim Crow was that brief moment in the sun after reconstruction. We had that brief moment in the sun where black people could vote. There are black people in Congress, lasted about seven years. And then what came after that was held to pay. And so we have still this brief moment in the sun, and as America recalibration goes back to a normal odor of business, we have to create institutions that can persist and perpetuate opportunities for economic advancement out of this moment that can outlive the fickleness of the American media and the organizations as they move on to the next hot topic.  
Speaker 2    00:38:12    I think you just dropped the mic. I think we're done. <laugh>. I think this is a really innovative structure that's so human driven and I'm so happy to see it. You know, a lot of people question what is, what could equality look like? And it's, you know, this is it, this is a perfect example of striving towards equity, equal opportunity. And so I'm so happy to see the existence of Ready Life and I hope that it is a model that is adopted on a larger scale. Yeah. Thank you for doing what you do.  
Speaker 1    00:38:46    Well no problem. I appreciate your time and you know, we're out in Arizona every now and then. If I can be helpful, please let me know.  
Speaker 2    00:38:52    Yeah, for sure. Thank you so much for joining me in my critical conversation with Ashley Bell. I hope that you found it as interesting as I did. I loved Ashley's call to action for those in the justice space to take tangible chances on those that they're advocating for. I'm really curious your thoughts. So please email cc office hours gmail.com with any feedback and be sure to check out Joan and my breakdown on YouTube. Please review, subscribe, and share with everyone you know, and I'll catch you next time.