CNBC Transcript: Amalgamated Bank President & CEO Priscilla Sims Brown Speaks with Andrew Ross Sorkin from the CNBC Evolve Global Summit

July 13, 2022

The following is the unofficial transcript of a CNBC interview with Priscilla Sims Brown, Amalgamated Bank President & CEO, from the CNBC Evolve Global Summit, which took place today, Wednesday, July 13th. Video from the interview will be available at 

All references must be sourced to the CNBC Evolve Global Summit.

Realtime Transcription by

ANDREW ROSS SORKIN: Tyler, thank you for that introduction.  Priscilla, it is great to see you.  There is so much to talk about.  You have been one of the most outspoken CEOs on so many different issues, very controversial issues, and I want to get to all of those.  Before we even get into that, though, I do want to unpack a little bit of what we’re seeing in the economy right now, specifically because of the CPI data that we just had this morning.  Let me get your sense of where we are and maybe where we’re headed.

PRISCILLA SIMS BROWN:  Well, I can’t say that I’m an economist or able to prognosticate, Andrew, but it certainly doesn’t sound good for the average American, at least in the near term, as relates to inflation.  We’re very concerned about that.  As a socially responsible entity, we certainly think that those who are unbanked, underbanked and otherwise vulnerable stand to really be impacted the most by this, and we’re looking at opportunities to help them. But before we go too far into anything, I just want to thank you, Andrew, because you’ve certainly opened our eyes, dating back to 2018, to some of the problems that we can, within our swim lane, address in banking, particularly as it relates to guns.

ANDREW ROSS SORKIN: Well, thank you for that.  And we’re going to get to guns in just a moment.  Before we go there, I just want to ask you this.  And it relates to inflation in terms of how you see it.  A lot of people look at inflation, actually, as a regressive tax, especially on the American worker; but, at the same time, when you think about the tools that the Federal Reserve has, in almost a perverse way, to try to dampen demand, they have to make everything else more expensive.  How do you think the American public should think about that dynamic?

PRISCILLA SIMS BROWN:  That’s a very good question.  I think it certainly is true that inflation spikes are potentially a necessary impact here.  I think the everyday person, the person who doesn’t have a lot of options and can’t make a lot of choices because they spend their day working and they make enough to pay their bills, I think those individuals are really concerned and should be as we go forward.  I think it’s really important for us to not only look at how we provide literacy for that community, but also how we do more as a financial services industry to support that community as we go forward.

ANDREW ROSS SORKIN: Priscilla, you focused so much on social issues.  One of the things — and as you know, I’ve written about many of those issues and think that they are uniquely important.  But some of the latest polling shows that people these days care more about jobs, the economy inflation, than social issues.  And how do you think we should all square that?

PRISCILLA SIMS BROWN:  Look, I think those things are interrelated.  You can’t ignore what’s going on in the economy and think that it doesn’t hurt the most vulnerable the most. So the social issues that we talk about are inextricably linked to what’s happening today in the economy, as well.  When we talk about a woman’s reproductive rights, when we talk about the economic impact of that, we talk about what happens to communities when there’s gun violence, all of those things are linked to consumer confidence, they are all linked to people’s ability to just survive and thrive.  And you really — what we’re helping people to understand, we hope, is that you really can’t separate them.

ANDREW ROSS SORKIN: Right.  Do you see a shift, though, among CEOs in America about speaking out?  And the reason I raise this issue is I think over the last several years there really was a movement taking place in large part lifted by employees who were pushing their executives to speak out on issues like voting rights, on issues like Roe v. Wade, LGBT issues, so many, Black Lives Matter and others. And yet over the past, say, 12 months, there appears to have been a shift back in part because politicians, specifically on the right, have started to use whatever leverage, in some cases economic leverage they have against those companies, I’m thinking Disney in Florida and Governor DeSantis, for example.

PRISCILLA SIMS BROWN:  Yes, that’s a great example.  I’m sure people are taking note of that and other actions. Look, I think every evolution, every change occurs in steps.  We take steps forward, we take steps back.  We generally move in the direction of this — of the new change.  And I think in this case, Pandora’s box is open.  Not only did employees and individuals ask of their employers and the businesses with whom they do business to act responsibly, they also demanded that you not only talk about it, but you actually take action.  And whether that’s in climate, whether that’s related to all of the social issues we’ve just mentioned, in all of these cases, employees and consumers want to see real action.  And I think that that, over time, will continue.  It doesn’t mean we won’t, at points, have resistance to that change.  And it will come from all sectors, and that resistance will have moments of glory. But I do think over time we’ll move in the right direction.

ANDREW ROSS SORKIN: You offered some nice comments towards me around some of the coverage of guns and those issues that have been confronted in the country at the top of this segment. I want to offer them back to you, because unbeknownst to me, it appears that you’ve taken up that cause, in fact, and applied to one of the standards organizations to try to deal with this issue in terms of how guns are financed through credit cards, though thus far unsuccessfully. Tell us about that.

PRISCILLA SIMS BROWN:  Yeah, and I want to say that this goes a little bit to your last question in that there are things that all of us can do within the areas that we focus in our businesses. In my case, and in the case of those of us in the banking and financial services industry, that relates to payments, it relates to car purchases. So every entity, every retailer, has a merchant code associated with that business, and that merchant code doesn’t go to the SKU level.  It doesn’t tell us what you purchased within that business, but it tells you that you’ve made a purchase from a particular type of business. We’re all used to and actually benefit from the use of merchant codes and other information, the use of data to prevent fraud, to prevent things like human trafficking, to prevent mortgage fraud. When you get a text message or a call from your bank, either from your — the bank that holds your bank account or from your credit card company that asks you whether or not you made the charge that was just made on your card, that is the result of using intelligence and data in order to identify aberrations or patterns that are inappropriate or unusual or worthy of at least the question. In the case of gun stores, there are no merchant codes.  While there are merchant codes for the hair salon and the shoe shine place and every other retailer, there’s no merchant code for gun stores.  If we did have a merchant code for gun stores, we could detect patterns that would indicate that there had been something unusual going on. So straw purchases, for example, if I asked you to buy a gun for me because I can’t legally buy that gun, and you do so and the gun costs $1,000, and $1,000 then comes into your account from me within a day, that’s an aberration. And if we saw those patterns, we would file what’s called a suspicious activity report.  The appropriate legal and law enforcement entity would find that and then take action that they would deem appropriate.  It wouldn’t be appropriate for us to go any further than that, but at least we would identify that suspicious activity. In the case of a number of these mass shootings that have occurred, there were a lot of merchants being — a lot of purchases being made of guns and ammunition on credit cards by the perpetrators of these crimes.

ANDREW ROSS SORKIN: Thus far, the standards organization has denied creating one of these codes.


ANDREW ROSS SORKIN: And we should note that Visa and American — or MasterCard have employees on the board of this that have to approve it, and at least I can suggest in my own reporting of this issue, that they have been against creating a merchant category code for gun stores.  Do you know why?

PRISCILLA SIMS BROWN:  Well, they’ve given several reasons.  We think every one of those reasons would be something that could be managed. So one of the reasons they give is, what about the stores that don’t — that sell things other than guns and ammunition, you know, a big-box store that sells other kinds of apparel and things, for example.  Their concern is that somehow this disadvantages the small store that only sells these guns. We think the answer for that is you can certainly have more than one merchant code, including one for those that are pure play gun stores and those that aren’t.  So there are a number of ways that we could manage this problem if we wanted to.

ANDREW ROSS SORKIN: Are you surprised that there’s been this pushback? Because the other component of the reporting that I would suggest is the case is that there’s such an anxiety, a political anxiety frankly, by some of the credit card companies and even some of the banks about going down this road because they are worried, specifically in red states, that they will be prevented from doing business there. We’ve seen this now in the state of Texas, for example, that has made it very difficult for Citigroup and J.P. Morgan to underwrite municipal bonds, for example, without committing to a letter saying that they don’t discriminate in any way against guns or anything else.  The state of Louisiana has put together its own bill related to this.  So you’re starting to see this across the country.

PRISCILLA SIMS BROWN:  Yes.  I think those people who are concerned about that should listen to my friends who are legal gun owners, because what I’m hearing is that people own guns for a couple of reasons.  One is sport.  When they own guns for sport, or if they own guns for protection, they are doing so in a legal manner, and they want to be sure that guns are only used in legal manners. And so I think many of those friends would tell you that they’d love to see a merchant code.  They would be a lot more comfortable — in fact, feel less pressure — if they knew that the gun purchases that were made were made legally.

ANDREW ROSS SORKIN: Right.  I also want to just pivot the conversation to the issue of unions.  Your company’s largest shareholder is Workers United, which is an affiliate of the SEIU, of course, and there is what appears to be a movement across the country, at least anecdotally when it comes to headlines, for increase in the unionization movement. Having said that, the numbers don’t support it, and I’m trying to square that circle and understand what we really think is happening right now.

PRISCILLA SIMS BROWN:  Look, I think this is certainly a market where workers are concerned about their rights.  We see it not only in the proliferation of union votes; we see it in every way.  We see it in earnings going up.  We see it in unemployment.  We see it in the movement of people among employers. So there’s a lot of activity going on, and workers care about making sure that they have the quality of life and the compensation they deserve for their work. I do think the numbers are going up.  You have a lot of entities voting for unions.  They still have to get through the process, right?  They still have to put contracts in place.  Those contracts then have to be voted on. So there’s a little bit of a lag effect, perhaps, in the pure number of union members, but I do think the numbers are going up.

ANDREW ROSS SORKIN: What do you tell skeptics of the union movement?  And, specifically, a number of them point to, for example, Workers United’s efforts inside Starbucks.  This is a company that has been remarkably progressive, I think, over the years. When you look at benefits, I think it is literally in the 100 percent — you know, it ranks a hundred percent on benefits relative to any of its peers, and yet they have become a target of the unions.  And some people look at that and say, you know what?  This isn’t really actually about making workers’ life better, this is a political power grab to some degree.

PRISCILLA SIMS BROWN:  Yeah, Andrew, this isn’t my area of expertise.  I’m not involved in the union movement. We certainly are proud to be a bank that was founded by workers 100 years ago, who were part of the Amalgamated Clothing Workers Union.  We’re really pleased to have members of Workers United on our board. But I would say that I think every situation is a bit different.  I can’t speak to Starbucks specifically; I’m just not involved, I’m just not knowledgeable.  But I would say that, in every situation, you’re going to have healthy conversation going on that, in the end, will result in what’s best for workers, because I think that’s where the power base is moving.

ANDREW ROSS SORKIN: Let me bring it back to, then, the banking industry, but also ESG, which I think is a component part of what your bank is trying to represent. One of the things, and it goes to guns and goes to so many other issues, is there’s a view among some, and this is probably the critical view, of whether banks should be in the business of de-platforming, or “debanking” is the phrase, certain industries or certain types of products, depending on their social implications. How do you think about that?

PRISCILLA SIMS BROWN:  Yeah, look, I think people do care about where their money sleeps at night, as many say, and they do care about making sure that their investments are being placed in ethical places, whether that is related to climate, whether it’s related to any number of other areas.  And I think that that is a right that investors should have.  I think if you are concerned about that, if your values are strong in some particular areas, you should have the right to invest and have your money be placed to support those businesses. I also think that the growth in ESG reflects really a strong movement toward people caring that it isn’t just the return, but it’s also the quality of the return.  And I think as this movement continues, you’ll start to see higher returns in these particular areas.

ANDREW ROSS SORKIN: How much do you think about your bank and how it approaches differentiating itself from a J.P. Morgan or Bank of America or any other bank in the country when it comes to the social issues, versus the product, meaning how you price the mortgage, what the app looks like, all of the sort of day-to-day issues that banks and their customers deal with?

PRISCILLA SIMS BROWN:  Yes, of course.  The customer experience is important, no matter what entity you are.  Customers’ expectations around that experience are growing, and we certainly face that challenge as do a number of other banking institutions and fintechs, in fact, everyone does.  I think that that’s important.  I think the changing buyer behavior is really important.  It also presents for us real opportunities with so much data available to us about customers.  We actually have the opportunity to not only serve customers better by looking at a myriad of factors when we think about mortgages, when we think about other financial products, but we also have the ability to help our customers make better choices. So to the extent that a customer is looking to do something that is inconsistent with their buying practices, we should have the ability to suggest to them that they might do things slightly differently. So I think the definition of product is really moving more into service and relationship with our customers.

ANDREW ROSS SORKIN: Priscilla, I want to thank you for the conversation, for the work that you’re doing, and I look forward to following your progress.  We’re at quite a moment, and your bank is a microcosm of so much of it.  Thank you.

PRISCILLA SIMS BROWN:  Well, we’re happy to see everyone else coming to this realization, as well, and we think we’re all better if everyone starts to think more about ESG.

ANDREW ROSS SORKIN: Thank you so very, very much.  I’ll send it back to Tyler.

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