Racialized Administrative Burdens to Cares Act Relief: Evidence from Interviews with Bank Employees

Background and Purpose

Banks played a crucial role in administering parts of the Coronavirus Aid, Relief, and Economic Security (CARES) Act by processing small business loan applications and facilitating stimulus check deposits. This paper explores how administrative burdens in banking impacted the accessibility of public relief efforts during the initial months of COVID-19 and addresses how bank employees justified and internalized administrative burdens as rational and legitimate, even as those same burdens played exclusionary and discriminatory roles (Baekgaard, Moynihan, & Thompsen, 2021).

Methods

We completed 41 interviews with banking employees during March and April 2020, at the same time as the early stages of CARES Act implementation. We coded interview transcripts deductively and inductively using Atlas.ti. First, we developed an initial set of codes reflecting the themes we expected to see based on the theory of racialized administrative burdens (Ray, Herd, & Moynihan, 2020), including codes to capture the racialized costs of administrative burdens, employee justifications, and how discretionary decisions relieved or exacerbated burdens. Then we noted unanticipated themes and ideas through an inductive coding process. This approach enabled empirical data to guide the process of theorizing and appropriately allowed for unexpected findings (Vaughan, 2014).

Results and Concluding Implications

Using tenets of racialized organizations (Ray, 2019) and racialized administrative burdens (Ray, Herd, & Moynihan, 2020), we uncovered how banks’ organizational practices and policies differentially shaped the agency of racial groups, legitimated unequal resource distribution, and enabled racialized discretion in who was accessing COVID-19 assistance. For example, employees described how providing more information could ease the processing of small business loan applications. The faster customers could fill out their paperwork and the more information they could provide, the faster they could receive their money. As one bank executive described, “At a bank, we’re not just gonna pass out money just because you fill out a form. We have to do due diligence on our end. If you're gonna provide more—the more information you provide, the easier it is for us to process it, and then you'll get your money sooner.”

However, while employees used “due diligence” as a facially neutral phrase, requiring more information likely created differential costs across racial groups. One employee described what they called “coronavirus underwriting...They ask a bunch of questions like, ‘Oh, are you a[n] American citizen? Is your company in America?...Just more due-diligence questions.” In this example, asking questions about citizenship likely prolonged the process for customers who were immigrants. Moreover, given valid concerns about government surveillance and deportation, questions about citizenship could have discouraged customers from applying to receive the public funds to which they were entitled.

Public Administration and Organizations literature has begun to examine how administrative burdens are racialized within already racialized organizations (Ray, 2019; Ray, Herd, & Moynihan, 2020). This paper advances these ideas by applying a racialized burdens lens to the private banking industry in its delivery of public services provided by the CARES Act of 2020, and we discuss their implications for the welfare state.