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Could The Black Banking Industry Help Fix Wealth Gap?

When we think of the tremendous wealth gap between blacks and whites, have we ever considered that part of the connection could rest upon the banking industry. Is it not coincidental that Dr. Martin Luther King, before being assassinated, urged black people to strengthen the black banking institutions.  

Let’s consider the black movement towards entrepreneurship, one of the major challenges facing black entrepreneurs is access to capital. Yet, take for instance a black owned bank such as Carver Federal Savings Bank. Named after the black scientist and founded in 1948, Carver Federal Savings Bank  has been said to be the cornerstone of the black community. Despite facing several challenges including the recession, the bank issued more than $421 million in real estate loans and $43 million in small business loans to the black community.

For many years, black owned banks were said to have been the backbone even during times in which we could not bank elsewhere. They were the chief lenders to our churches, businesses, and community when we needed funding. Especially when we understand that major banks typically give less than 1 percent of their mortgages to African Americans or display discriminatory acts like pushing expensive fees and higher rates than to white borrowers with similar credit history.

In 1980, there were 60 black owned banks and now presently we only have a merger 22. The Congressional Black Caucus Economic Development and Wealth Creation Task Force  took on the mission to save MBDP ( Minority Bank Deposit Program) after reports in the Wall Street Journal found that Black-owned banks could disappear entirely within the next 8 to 12 years.

U.S. Representative Bobby Rush, D-Illinois, has introduced the Rescue Act for Black and Community Banks. The bill was initiated in January 2019 and is set to save black own banks in hopes to boost the wealth of the black community.  Read more about the new bill here at Black Enterprise.

What will the disappearance of black owned blacks do for our community? When we are already facing financial disparities and a massive wealth gap. The words of Dr. Martin Luther King Jr. still rang “We’ve got to strengthen black institutions”.

Teri Williams, the chief operating officer of Boston’s OneUnited, the largest black-owned bank in the country, said, If one million people opened a $100 savings account in a black-owned bank, we would move $100 million. Now that is black economic power.

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