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Whether you’re a person or a major business, banking services are critical to economic success. However, African-Americans have historically been underserved by the American banking industry. Even today, African-Americans own less than 10 percent of all businesses operating, and more than 20 percent of black households are unbanked altogether.
However, there are some institutions that, while often struggling, are helping to meet the financial needs of the African-American community. In many cities and towns over the past several decades, Black-owned banks have stepped up to support African-Americans and provided access to the banking and credit these communities need to be successful.
Let’s take a closer look at these banks, the critical services they provide, and areas where they continue to struggle even today.
A Short History
The beginning of Black-owned banks in America started at the conclusion of the Civil War. In 1865, Congress wrote a bill calling for the creation of the Freedman’s Savings and Trust, better known as the Freedman’s Saving’s Bank. President Lincoln signed the act into law and the bank was established in March 1865.
The intent of the bank was to provide millions of recently freed former African-American slaves access to the credit they needed to emerge from the economic ruin of the war. Freedman’s savings bank ultimately grew to 19 branches in a dozen states. However, this banking system struggled constantly due to mismanagement, and ultimately failed in 1874.
The banks that have followed in its wake have shared the same vision and often experienced the same struggles as the Freedman’s Savings Bank.
Despite their many challenges, these banks often play an essential role in African-American communities. For example, African-Americans accounted for approximately 75 to 100 percent of all mortgage originations in Black-owned banks from 2004 to 2018; these banks actually increased their support to Black homeowners during the housing crisis of the Great Recession, too.
In many cases, the Black-owned banks in African-American communities may be the only choice in town. Altogether, there are nearly two dozen Black-owned banks with assets surpassing $4.7 billion.
A Constant Struggle
Despite the important role they serve in African-American communities, Black-owned banks have often faced struggles to remain solvent. Before the Great Recession, over 44 Black-owned banks were operating across the country.
The economic woes that shook the Black community during the downturn were devastating to Black-owned banks as well; overall, by 2020, only 24 Black-owned banks remained, many with considerably fewer assets on hand than they had before the recession.
Nonetheless, while facing many challenges, these banks continue to be a dominant force in their communities.
Signs of Renewal
Some bright spots indicate Black-Owned Banks aren’t going away anytime soon. For example, in 2016, rapper and activist Michael Render (aka Killer Mike) brought attention to both the importance as well as the plight of these institutions by starting the #BankBlack movement; Killer Mike’s actions definitely helped to raise awareness of and interest in Black-Owned banks at a critical time.
Additionally, these banks have also displayed a willingness to innovate and find new ways to support the African-American community as well. For example, over 14 years ago, OneUnited Bank became the first Black-owned Internet bank in the country, providing a new way for Black communities to access critical financial resources.
Other Black-Owned banks, such as Industrial, continue to invest up to 60 percent of assets in support of development in low and middle-income African-American communities as well.
Black-Owned Banks Near Me
Find a bank in your area offering local services below.
List Of Black-Owned Banks
Black-Owned Banks In Atlanta
- Unity National Bank
- 1st Choice Credit Union
- Credit Union of Atlanta
- Citizens Trust Bank
Black-Owned Banks In Chicago
- South Side Community Federal Credit Union
- GN Bank
Black-Owned Banks In New York
- Industrial Bank
- Urban Upbound Federal Credit Union
- OneUnited Bank
- Carver Federal Savings Bank
Black-Owned Banks Texas
- Faith Cooperative Credit Union
- Mount Olive Baptist Church Federal Credit Union
- Oak Cliff Christian Federal Credit Union
- OneUnited Bank
- Unity National Bank
Black-Owned Banks of Note
Here is a list of banks you should definitely be aware of.
- OneUnited. While we discussed OneUnited earlier, it is also important to note that the Boston-based bank is the largest Black-owned and FDIC-insured bank in the United States.
- The Harbor Bank of Maryland. The Harbor Bank of Maryland serves African-American communities in the Baltimore Area. In addition to the standard (and critical)savings, checking and loan services, this bank also imitated Harbor Financial Services, which enables greater access to investment resources.
- First Independence Bank. First Independence Bank is based in Detroit. While it offers the standard services that most banks do, this bank provides exceptional banking support to college students as well.
- Citizens Trust Bank. With multiple branches in Georgia and Alabama, Citizens Trust Bank is one of the top banks in the American southeast. This bank is known for having exceptionally competitive credit card rates.
- Broadway Federal Bank. If you’re located on the West Coast, Broadway Federal Bank in Los Angeles, and Inglewood California is definitely a bank you should consider checking out.
While Black-owned banks often face steep challenges to keep going strong, they often provide essential support to African-American communities across the country. Fortunately, many people are finally starting to recognize this.
For example, the highly successful streaming service Netflix recently committed to moving over $100 million into Black-owned banks, a very welcome cash injection. Many rappers and other celebrities have done the same. So, as you look for ways to support African American communities and help them thrive, try to find a bank in your local area.
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