DALLAS––BankBlackUSA said it is working to create greater awareness of black-owned banks and credit unions that provide a real opportunity for the Black community to overcome the racial wealth gap.
The organization said it acts as a database of 40 Black-owned financial institutions and offers an app to help consumers find and compare Black-owned banks and credit unions, Forbes reported.
“But the site and app also provide other resources that help consumers identify ways to establish financial health, develop economic stability and build wealth using Black-controlled financial institutions,” according to Forbes. “This includes investment in Black-owned banks and company stocks, and access to Black-controlled investment platforms.”
The effort has its roots in OneUnited Bank, the nation’s largest Black-owned bank and first Black Internet bank, which in 2016 launched the national #BankBlack Challenge. The ongoing campaign seeks to galvanize Black Americans and their allies to move their accounts to Black-owned financial institutions, Forbes reported.
The Founders
Among the founders is banking professional Stephone Coward II, who said he and OneUnited Bank’s co-founders began to research ways to support and uplift Black-owned banks and credit unions, which led to the launch of BankBlackUSA. Coward joined with Atlanta entrepreneur Robert Herring III, Yale lecturer and entrepreneur Justin Moore in New York City, and several others in Detroit to start the initiative, Forbes reported.
BankBlackUSA is focused on leveraging the economic strength of Blacks in America, who spend $1.3-trillion annually as a tool for gaining social and racial justice.
“Our initiatives connect Black people and their allies to networks and activities nationwide related to financial empowerment like #BankBlack,” Coward says. “We also provide Black banking news, education and other resources to promote individual, collective and local action to accelerate cooperative economic growth within Black communities.”
Coward told Forbes he believes Black-owned minority depository institutions (MDIs) play an integral role in closing the racial wealth gap and have since the end of enslavement. MDIs are institutions in which 51% or more of voting stock belongs to minority U.S. citizens or permanent residents. Their boards of directors are mostly minority and the communities they serve are minority. But, he told Forbes, unlike white-owned banks, “Black-owned MDIs are woefully under-supported and undercapitalized.”
Assets Lacking
“The largest white-owned banks have billions or trillions of dollars in assets,” Forbes quoted Coward as saying, citing JPMorgan Chase as one holding over $2 trillion in assets. “But not a single Black-owned financial institution has reached a billion dollars in assets, the closest being OneUnited Bank,” headquartered in Boston, with over $650 million in assets.
An impending merger, announced on Aug. 26, 2020, will come close to the $1 billion figure, when Los Angeles-based Broadway Financial and Washington, D.C.-based City First join in a merger of equals with over $850 million in depository assets, Forbes noted.
On the credit union side, as of June 30, 2017, of 580 minority-owned credit unions, 50% were Black credit unions, but they only held 15% of all assets held in minority credit unions.
For the full Forbes story, go here.