Black-Owned Banks
The most recent Black Lives Matter protests following the killings of George Floyd and Breonna Taylor have not only resulted in policy actions to improve Black American’s lives but also brought attention back to the #BankBlack Movement.
Learn how you can “bank black” to support the Black community and discover a list of the leading black-owned banks in the United States.
#BankBlack: A Hashtag That Sparked A Movement
In July 2016, the Bank Black Movement was ignited by rapper and activist, Michael Render (a.k.a. Killer Mike), who gave an emotional speech encouraging the Black community to move their money into black-owned banks in the wake of yet another fatal police shooting where two African American men lost their lives.
“We don’t have to burn our city down. But what we can do is go to your banks tomorrow. You can go to your bank tomorrow. And you can say, ‘Until you as a corporation start to speak on our behalf, I want all my money. And I’m taking all my money to Citizens Trust.'”
Killer Mike told listeners on Atlanta’s Hot 107.9 radio.
Following his call-to-action, the hashtags #bankblack and #moveyourmoney started to trend on Twitter, and the Bank Black Movement was born. And Citizens Trust, a black-owned bank based in Atlanta, subsequently experienced an influx of new depositors, along with several other African American-owned financial institutions.
Why Are More African Americans Choosing to “Bank Black”?
People who want to support the financial empowerment of Black America are increasingly choosing to “bank black,” as part of a broader movement of supporting black-owned businesses.
The idea is to take deposits out of majority white-owned financial institutions and place them in black-owned banks and credit unions instead that predominantly provide financial services to African Americans and serve black-owned businesses.
“If one million people opened a $100 savings account in a black-owned bank, we would move $1 million. That’s real economic power.”
Teri Williams, President and Chief Operating Officer, OneUnited Bank
It is also important to note that Black Americans have been under-served by the existing financial system. According to the New York Times 1619 Project, African Americans hold only 3% of wealth in the US, even though they make up 13% of the population. A lack of access to capital is one of the factors contributing to this wealth inequality for African Americans.
According to an Urban Institute report, black-owned banks and credit unions focus lending on small businesses, nonprofits, and African American home-buyers, while maintaining a focus on predominantly Black communities. For example, during the housing crisis between 2007 and 2013, black-owned lenders increased mortgage lending to Black borrowers while other institutions retreated.
Moreover, black-owned banks have had a greater share in lending to low and moderate-income borrowers in the last 14 years than other types of financial institutions. This shows that black-owned banks are on the front lines in the battle for more wealth equality in the United States.
100% of black-owned banks are community banks, which means they specifically serve the community in which they are located. That also means that they understand customer needs better than multinational banks with headquarters on Wall Street.
Black-Owned Banks
Black-owned banks and credit unions are financial institutions that either have a concentration of ownership or a concentration of board membership and usership among Black Americans.
According to the Q1/2020 list of Minority Depository Institutions (MDIs), out of the 143 minority-owned financial institutions, 19 are black-owned. From a total of $254 billion in assets held by all 143 MDIs, $4.935 billion is held by black-owned financial institutions.
Below, you will find some of the black-owned MDIs.
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The History of Black-Owned Banks
While the Bank Black Movement started less than five years ago, black-owned banks have been around for much longer. The first black-owned bank dates back to the post-civil war era.
What Was the First Black-Owned Bank?
President Abraham Lincoln and the US Congress established the Freedman’s Savings and Trust Company, popularly known as Freedman’s Savings Bank, in 1865 to economically empower the newly-freed African American communities.
Although the bank only operated from 1865 and 1874, the lender was able to establish itself as the leading financial institution for Black Americans at that time. At its peak, the bank maintained 37 offices in 17 states, supporting 70,000 customers. However, Freedman’s Savings Bank did not meet today’s criteria of a black-owned bank due to its ownership structure.
Freedman’s Savings and Trust Company
The former Freedman’s Savings Bank on Pennsylvania Avenue NW in Washington, D.C., popularly known as Freedman’s Savings Bank.
The first chartered black-owned bank was the True Reformers Bank, which was established by former slave and Union Army Officer, Reverend William Washington Browne, in 1888. Interestingly, the True Reformers Bank is widely considered the first black-owned bank, but it was Washington-based Capitol Savings Bank that was the first black-owned financial institution to open its doors in late 1888, six months before the True Reformers Bank.
What Is the Largest Black-Owned Bank in America?
OneUnited Bank
OneUnited Bank is America's largest Black-owned bank working to help develop urban communities & to build Black economic power in America.
OneUnited Bank is currently the largest black-owned bank in the United States, with over $650 million in total assets. The Boston-based financial institution is also the first Black internet bank and a Community Development Financial Institution (CDFI). Founded in 1982, the black-owned lender has remained true to its mission of providing affordable financial services to support economic development in Black communities.
Liberty Bank
Liberty Bank was chartered in New Orleans in 1972 with a focus on service, integrity, and an interest in community & business development.
The second-largest black-owned financial institution is Liberty Bank. The New Orleans-based lender controls over $624 million and has one of the largest physical footprints among black-owned banks in the United States.
Carver Federal Savings Bank
Carver Federal Savings Bank has been proving New Yorkers with access to banking solutions regardless of their income level since 1948.
The third-largest black-owned bank is Carver Federal Savings Bank. The New York-based lender has been serving Black communities that have had limited access to mainstream financial services since it opened its doors in 1948. It continues to fulfill this mission today.
How to “Bank Black”
If you want to empower the Black community by moving your money into a black-owned financial institution, you can either walk down to the nearest black-owned bank in your city or sign up for an account online banking account.
Today, the majority of black-owned banks offer online banking to enable Americans across the country to “bank black” even if they are not located near any physical bank branches.
So if you want to start “banking black,” sign up for an account at one of the leading black-owned banks and deposit your money today.
