Bringing equal access to the American dream
The Change Company is working to end racial and societal inequities in financial services.
Originally published in FORTUNE
October 11, 2021
Owning a home has always been the cornerstone of the American dream, providing stability and a gateway to financial security and wealth. But for many, especially those in underserved communities, the dream is out of reach due to wealth inequality and a lack of access to capital. The Change Company, a community development financial institution (CDFI) that promotes capital and local economic growth in Black, Latinx, and low-income communities, is working to fix that.
“Our mission is to bank the unbanked, fairly and responsibly,” says Steven Sugarman, founder of the Change Company. “We do this by providing digital-first solutions to the resolution of social and racial inequities in lending and banking. Homeownership is key to breaking the intergenerational poverty resulting from a legacy of unequal access to lending and other structural racial inequities caused by the financial services industry.”
The Change Company, headquartered in Irvine, Calif., operates five divisions that encompass everything from mortgage lending to appraisal management services—all geared toward empowering underserved homeowners, small businesses, and consumers.
Still, tackling existing social and racial inequities in banking is no small feat. According to the Federal Deposit Insurance Corporation, 33% of African Americans and Latinos do not have access to any mainstream credit products, including credit cards, personal loans, auto loans, student loans, or home loans. That compares to only 14% of whites.
The Change Company has funded about $25 billion in loans and more than $7 billion in 2020 alone. In addition, since its CDFI certification in 2018, it has not had a single foreclosure on a loan, demonstrating that doing good can be good business.
To further expand Black homeownership in America, the Change Company and its home loan subsidiary recently partnered with Netflix. The streaming services company invested $10 million as part of its own initial $100 million overall initiative to support Black communities.
“Strong, socially responsible capital partners are critical to our ability to expand homeownership for minority and other underserved borrowers,” says Sugarman. “Our partnership with Netflix allows us to do just that. We are excited to empower real, positive change in America’s communities.”