American minorities need to “strengthen their financial literacy,” Fed Chairman Ben Bernanke told students and faculty at Atlanta’s historically black Morehouse College in Atlanta today.
During an expansive Q-and-A session with Morehouse students after his speech, Bernanke was asked about the household wealth gap between whites and blacks in America.
“It’s absolutely right the difference between minority and white wealth is very significant, and part of that is related to income levels where whites have a higher average income,” Bernanke said. “But even if you control for income level, you find minorities have gathered less wealth.”
Part of the cause, Bernanke said, is a lack of “financial education.”
Too many minorities don’t have bank accounts, he said, and “borrow from payday lenders and cash checks at check-cashing services,” he said, both of which charge high rates for their services.
“They would be better off in the mainstream banking system,” Bernanke said. “So one thing that could help would be to try to strengthen the financial literacy and financial education” of U.S. minorities.