Banking Black: Empowering Communities Through Black-Owned Banks
In recent years, there has been a growing movement towards supporting Black-owned businesses and institutions. And when it comes to banking, the same principles apply. Banking Black not only supports economic empowerment within Black communities but also addresses the systemic barriers faced by marginalized groups in accessing fair and equitable financial services.
The Importance of Black Banks
“The number one reason it’s important for Black banks to be in existence is because the majority of them do work in what the United States designates as low to moderate-income census tracts,” says Rod Chavez, the executive director of the National Black Bank Foundation. This highlights the crucial role that Black-owned banks play in providing financial services to underserved communities.
According to the Federal Deposit Insurance Corporation (FDIC), there are currently 23 Black-owned and run banks and savings institutions in the United States. To qualify as a Black-owned institution, a minimum of 51 percent of voting stock must be owned by individuals or entities that identify as Black, or the majority of people on the board of directors must identify as Black.
Addressing Discrimination in Credit Markets
One of the key reasons for supporting Black-owned banks is the potential for addressing discrimination in credit markets. Professor William Darity from Duke University explains, “If we make the assumption that Black-owned banks are more likely to provide credit on reasonable terms to Black clients than white-owned banks, then their absence is really important in the context of a situation in which Black people are confronted with discrimination in credit markets.”
By choosing to bank with a Black-owned institution, individuals can potentially access credit and financial services that align with their needs, without facing the same systemic barriers that exist in traditional banking systems.
Prominent Examples of Black-Owned Banks
If you’re considering switching to or joining a Black-owned bank, it’s important to conduct thorough research to make an informed decision. Here are nine of the oldest Black-owned banks in the country:
1. Citizens Savings B&T Company: Established in Nashville in 1904, their goal is to provide assistance to low- to moderate-income and minority groups to help them realize their economic dreams.
2. Mechanics & Farmers Bank: Established in Durham, NC, in 1908, their mission is to enhance the wealth and well-being of the communities they serve.
3. Citizens Trust Bank: Established in Atlanta in 1921, their mission is to promote community economic growth and stability.
4. Carver State Bank: Established in Savannah, GA, in 1927, their mission is to provide the building blocks for financial freedom for low-income individuals and residents of distressed communities.
5. Industrial Bank: Established in Washington D.C. in 1934, their mission is to impact economic development in the communities they serve.
6. First Security Bank & Trust Co: Established in Oklahoma City in 1951, their mission is to create innovative and flexible banking products that provide financial capital to small businesses.
7. First Independence Bank: Established in Detroit in 1970, their mission is to be a beacon for capital accumulation for under-served and minority communities.
8. Liberty Bank & Trust Co: Founded in New Orleans, Louisiana, in 1972, their focus is on service, integrity, and a sincere interest in community and business development.
9. Commonwealth National Bank: Founded in 1976 in Mobile, Alabama, their founders’ mission is to serve their own neighbors, friends, and community members.
Banking Black is not only about supporting Black-owned institutions but also about empowering communities and dismantling systemic barriers. While this list provides a starting point, it’s essential to thoroughly research and choose a bank that aligns with your specific banking needs and values. By making a conscious choice to bank Black, you can contribute to the economic growth and well-being of marginalized communities.
