Research indicates that there are currently over 21 Black-owned banks in the United States, and a 2013 article on HBCU Moneys website stated that those banks have assets totaling approximately 0.43 percent of African Americans $1.1 trillion in spending power (which today, has risen to $1.3 trillion).
Comparatively, in 1994, there were 54 Black-owned banks.
While the decline in the number of Black banks is certainly troubling, one bank that is faring well is Carver Federal Savings Bank. Founded in 1948 to serve African American communities, Carver is one of the largest Black-owned bank in the United States with 9 full-service branches throughout NYC.
In a recent interview with SiriusXM Radio Talk Show Host Karen Hunter, Carvers CEO Michael T. Pugh talked about the challenges and opportunities these banks face and stressed the significance of a banks Community Reinvestment Act Rating. Here are excerpts from the interview:
Regarding challenges and opportunities, Pugh noted, I think the biggest challenge for Carver today is making sure we get the word out that we are available and that we are reinvesting in the communities we serve. So many people dont know that bank like Carver, which has been around for over 65 years, has a laser focus on reinvesting directly in our communities. As an example, 83 cents of every dollar we have on deposit gets reinvested to small business owners and consumers residences that live in our areas, and the purpose there is to really focus on economic development, new jobs, small businesses, entrepreneurship, and home ownership.
Melbas restaurant in Harlem is one example of a small business that has benefited from Carvers ability to invest in entrepreneurship. We spend a lot of time looking at ways to provide capital to small business owners, and people who are growing or starting a small business. We recently did a loan for Melba and were able to help her with a fantastic expansion. It has been part of an advertising campaign that has been going throughout the greater NYC area to focus on real people and real experiences highlighting what we do and why we add value to small businesses and entrepreneurs like Melba, Pugh said.
For those considering joining a Black-owned bank, Pugh advised, I would encourage anyone who is interested in reinvesting in their community to first take a look at a community bank especially a bank like Carver. For a number of years we have had an outstanding CRA rating, which demonstrates our ability to reinvest in the communities we serve and to make sure that access to capital is being provided to minorities.
Another Black-owned bank that has been making a big push for African Americans to bank with Black-owned banks is OneUnited Bank. Theyve been getting the message out through their national #BANKBLACK challenge. Their website states, The ask is simple: open a $100 savings account with us from anywhere in the country and challenge 20 of your friends to do the same. Their message? #BlackMoneyMatters. “It is critical for the Black community to utilize our $1.3 trillion in annual spending power to create jobs and build wealth in our community, said Teri Williams, President & COO of OneUnited Bank.
The movement kind of began over the summer and is not just limited to bank owners. Over the summer after several African American people across the country were killed due to excessive police brutality, citizens called for African Americans to put their collective 1.3 trillion in spending power into Black banks. In a USA Today article, dated July 17 and titled Black-Owned Banks Get Rush of New Depositors, it was reported that Citizens Trust Bank in Atlanta, Georgia, which was founded 95 years ago, received 8,000 new depositors in a matter of days following reports of police brutality.
“We cannot go out in the street and start bombing, shooting and killing. I encourage none of us to engage in acts of violence that will cause more peril to our community and others that look like us. I encourage us to take our warfare to financial institutions,” Rapper Killer Mike said during town hall meetings on MTV and BET.
Others took to social media with similar messages. Celebrities Solange, Jesse Williams, Alicia Keys, Beyonce, Usher and Queen Latifah have encouraged African Americans to move their money to Black-owned banks. Time to literally put my money where my mouth is, Solange wrote on her social media pages of 1.4 million followers.
The USA Today article further states that Michael Grant, president of the Washington, D.C.-based National Bankers Association, which promotes minority-owned financial institutions, said that CEOs of black-owned banks have been calling him saying they’re “getting volume that you would not believe” in recent days.