In the hours after some of Silicon Valley Bank’s biggest customers started pulling out their money, a WhatsApp group of startup founders who are immigrants of color ballooned to more than 1,000 members.
FILE - Security guards let individuals enter the Silicon Valley Bank's headquarters in Santa Clara, Calif., March 13, 2023. While Wall Street struggles to contain the banking crisis after the swift demise of SVB the nation's 16th largest bank and the biggest to fail since the 2008 financial meltdown industry experts predict it could become even harder for people of color to secure funding or a financial home that supports their startups.
Bradley said some investors have implored startups to switch to larger financial institutions to stymie future financial risks, but that's not an easy transition. Tiffany Dufu was gutted when she couldn’t access her SVB account and, in turn, could not pay her employees. Banking is based on relationships and when a bank like SVB goes under, “those relationships go away, too,” said Hilliard, who is African American.diversity, equity and inclusion were to blame
Smaller financial institutions, however, have worked to build relationships with people of color. “We cannot lose our regional and community banks," she said."It would be a travesty.” “You’re seeing customer flight of folks that we’ve been serving for a long time,” Elam said. “How many people may not come to us for a mortgage or small business loan or to do their banking business because they now have in their mind that they need to bank with a bank that is too big to fail? That's the first impact of eroding public trust.”
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