Jakes was questioned about his decision to partner with Wells Fargo, as the bank was recently ordered by the Consumer Financial Protection Bureau to pay $3.7 billion for unethical and illegal practices, which included misapplying loan payments, wrongfully foreclosing on homes and illegally repossessing vehicles, incorrectly assessing fees and interest, and charging surprise overdraft fees.
These offenses, which affected nearly 16 million consumer accounts, disproportionately affected the very kinds of people Jakes’ building initiative is aimed at supporting.
“That’s exactly the kinds of reservations I had with them,” Jakes said, noting that, until recently, he had refused to do business with Wells Fargo.
Nevertheless, Jakes said, “That settlement that came out, came from the previous administration. They have a new leader now; they have a new administration. And they’re beginning to right some of the wrongs.”
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“This is not going to right it all at once, but it is a start toward…rectifying some of the mistakes that have been made previously,” Jakes said. He also noted that “when other banks stood back and looked, Wells Fargo stood up and said, ‘I’m willing to make this unlikely alliance.’”
Arguing that it takes disruptive thinking to make a transformative impact, Jakes said, “This disruptive alliance between us is designed to lift up underserved, underrepresented communities.”
Jakes went on to explain the disruptive idea behind mixed-income housing as opposed to low-income housing.
“Mixed-income housing means that your neighbor across the street might be a doctor, somebody else might be working for FedEx, and somebody else might be underemployed and a janitor,” Jakes said. “The reason mixed-income housing is vitally important is because we’ve tried low-income communities before, and they’ve fallen to the abyss and become ghettos.”
“Mixed-income [communities] have a much better result—safer, better schools, better opportunities, upward mobility,” Jakes said. He also noted that mixed-income communities can help solve the problem of “food deserts,” which is when no affordable nutritious food is available locally to a community.
Further, Jakes said, having a community where more fathers are present has been shown to improve outcomes even for children in the community who do not have a father of their own—particularly boys.
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“We are the people we have been waiting on. We cannot sit back any longer and wait on anybody to come rescue us,” Jakes said. “We’ve got to come up with these innovative ideas. And people with the influence and opportunity to—like mine—want to lead the way, because I feel like it’s my destiny to help the next generation reach theirs.”
