When you choose a bank, do you consider who owns it? Do you consider who receives loans from that bank and who does not? A recent movement, characterized by the hashtag #BankBlack, went viral in mid-2016 and has driven support for black-owned banks.
The #Bank Black Movement
In the summer of 2016, police shot Alton Sterling in Baton Rouge, Louisiana. The next day, an unarmed Philando Castile was also shot dead by police in Minnesota. An uprising of protests followed in many U.S. cities calling for the end of the criminalization of blackness and social justice reforms. In a televised town hall a few days later, rapper and activist Michael Render, known as Killer Mike, advocated that the BLACK LIVES MATTER movement should take control of the community’s wealth through investments in the black financial community. He asked citizens to support small black banks with whatever commitment they could manage.
The #BankBlack movement took off.
A History of Black-Owned Banks
Social media spread the word advocated by Killer Mike through the hashtags #BankBlack and #MoveYourMoney. The movement resulting in an estimated $60 million being moved to black-owned banks in just nine months. The movement reflected a long history of calls for black financial empowerment that dates back to a bank established by Congress in 1864 to serve former slaves. In the many decades since, other banks have emerged to help the African American community start businesses, buy homes, and invest in each other when other banks were not doing so. Some of those banks are still around today.
In June 2019, the FDIC released a new research study on minority-owned depository institutions (MDIs). The findings show that MDI financial performance has significantly improved since 2015 in terms of revenue generation and loan performance. However, from 2008 to 2018, the number of MDIs declined by approximately 30% while community banks declined by 33%. From 2001 to 2018, the number of Asian American, Hispanic American, and Native American MDIs increased and the number of African American MDIs declined by more than half. African American MDIs represented 15% of all MDIs at year-end 2018. Here are the five biggest black-owned banks in America, their locations, how many millions they hold in assets and deposits, and how they serve their communities.
- The #BankBlack movement went viral in mid-2016 and has driven support for black-owned banks.
- Within nine months of the movement's initiation, $60 million had been moved to black-owned banks.
- In June 2019, the FDIC found that MDI financial performance has significantly improved since 2015 in terms of revenue generation and loan performance.
1. OneUnited Bank
- Assets: $661 million
- Headquarters: Boston
- Deposits: $376 million
- Number of branches: 6
Founded in 1968, the nation’s largest black-owned bank’s slogan is “part protest, part progress.” OneUnited is a government-designated CDFI serving low- to moderate-income communities. The bank holds workshops and events to increase financial literacy in the communities it serves. OneUnited Bank offers affordable financial services to meet its customers’ needs including a secured credit card for rebuilding credit and a second-chance checking account.
2. Liberty Bank and Trust Company
- Assets: Over $594 million
- Headquarters: New Orleans
- Deposits: $549 million
- Number of branches: 22
Liberty Bank, a Community Development Financial Institutions Fund (CDFI) with branches in seven states, has increased its assets from $183 million a decade ago to more than $594 million today. Its Liberty Foundation pursues philanthropic initiatives, such as expanding access to secondary and higher education and increasing the availability of affordable housing. The bank’s chairman since its founding in 1972, Dr. Norman C. Francis, has also served as president of Xavier University since 1968.
3. Citizens Trust Bank
- Assets: $411 million
- Headquarters: Atlanta
- Deposits: $348 million
- Number of branches: 10
Founded in 1921, this robust and growing bank increased its assets, loans, and mortgage originations in 2016. Its deposit accounts increased at six times the normal rate in 2018 due to an increased awareness of Citizens Trust generated by social media. The bank offers an affordable housing program for buyers who need down payment assistance; it also offers financial counseling.
Citizens Trust has also offered a program for middle- and high school students called "How to Do Your Banking," which uses learn-by-doing exercises to provide lessons on the importance of saving even small amounts, using a budget to achieve financial goals, how to bank online, how to keep checking accounts in balance, and how to manage basic investing.
4. Industrial Bank
- Assets: $423 million
- Headquarters: Washington, D.C.
- Deposits: $335 million
- Number of branches: 8
Industrial Bank, a CDFI founded in 1934, received approximately $2.7 million in deposits through more than 1,500 new accounts last July as part of Washington DC’s #DivestToInvest movement designed to support African American-owned banks and businesses. In 2015, the bank earned a Bank Enterprise Award worth $253,000 for increasing the number of loans it made in low- and moderate-income communities. More than 60% of its assets have been invested in these communities for more than 10 years.
5. The Harbor Bank of Maryland
- Assets: $282 million
- Headquarters: Baltimore
- Deposits: $219 million
- Number of branches: 7
Opened in 1982, Harbor Bank primarily serves the Baltimore area with a variety of checking accounts, savings accounts, and loans. It is the country’s first community bank to have an investment subsidiary, Harbor Financial Services. The bank has announced plans to open a co-working incubator at its downtown headquarters to support local black-owned startups as well as community development and advocacy groups. It also received $70 million in federal funding to revitalize low-income communities.
The number of black-owned banks' mortgage loans that went to black borrowers. Fewer than 1% of community banks' mortgage loans not run by minorities went to black borrowers, according to the FDIC.
The Bottom Line
Compared to the nation’s largest bank, JPMorgan Chase, these black-owned banks are tiny. Chase had over $2.7 trillion in total assets as of March 2019 dwarfing OneUnited’s $661 million. However, a bank does not have to be big to be successful and serve its customers well although a lack of resources can sometimes hinder smaller institutions from doing all that their communities might like them to do.
Further, despite the average statistics, any particular black-owned bank does not automatically mean that it does a superior job of serving the black community or that it is free from the corruption that has plagued big banks. Consumers should thoroughly research an institution before they trust that institution with their money, even when social change is a priority of that bank. To find a black-owned bank near you, see the spreadsheet compiled by Bank Black USA, which contains details about each of the country’s black-owned banks and ranks them according to the products they offer, their impact on the communities they serve, and the benefits they offer to minorities.