Last month, I did something revolutionary: I walked into the branch headquarters of Carver Federal Savings Bank in New York City and opened a checking account. This may sound like a simple financial move, but three-quarters of the nation’s African-American banks have disappeared in the past 30 years. And, as a result, we have suffered. Banks depend on deposits from customers so they can pool the money to make larger investments, which in turn create funds for small business loans, lines of credit and customer mortgages. Fewer accounts mean less money to lend back to the community for aspiring entrepreneurs, potential homeowners and folks looking to make other financial moves. Supporting Black-owned banks is inextricably linked to supporting Black economic empowerment.
Studies show that during the Great Recession, Black-owned banks paid higher interest rates on certificates of deposit than nonminority-owned banks in order to help insulate customers from the damaging effects of the economic downturn.
“Your dollars create opportunity for you and your community. We are shooting ourselves in the foot by not recognizing the economic power we have,” says Michael Grant, president of the National Banking Association, which represents 37 of the nation’s minority- and women-owned banks.
Read more in the August 2015 issue of EBONY Magazine.