It started with an emotional cry from rapper Killer Mike in the wake of the police shooting deaths of Alton Sterling and Philando Castile:
“We need one million people in Atlanta to take $100 out of their existing accounts, put $100 into a Citizens Trust [Bank] account…take that $100 million and promise $15,000 to $18,000 loans for Black businesses or small homes,” the MC said on Atlanta’s Hot 107.9.
People not only tuned in to hear his call, they listened, launching a nationwide trend in which African American-owned banks are seeing significant increases in new accounts. This might mark the beginning of a new type of Black economic power movement encapsulated by simple social media hashtags like #BankBlack and #MoveYourMoney.
Killer Mike singled out the Atlanta-based Citizens Trust, an institution he publicly supported earlier this year through various events, but the rallying cry is positively affecting many other Black banks nationwide. It is also apparently deriving energy from the Black Lives Matter movement and from people who wish to have a tangible, long-lasting impact outside of demonstrations and marches.
Banks like Seaway Bank & Trust in Chicago, Commonwealth National Bank in Mobile, Ala., City National Bank in Newark, N.J. and Boston-based OneUnited Bank all say they are benefiting from the movement. Partly driven by Killer Mike’s call and also by the calls of other celebrities, including Solange Knowles and Jesse Williams, the point is for African Americans to be more aware of who holds their dollars.
The result with Citizens Trust alone has been 8,000 new applications in the space of a week and as many as 2,300 new accounts and growing, according to the bank’s president and CEO, Cynthia Day.
“Recent happenings have caused an awakening,” said Day, whose bank board once included Black economic power advocate the Rev. Martin Luther King Sr. “This is a productive part of the conversation. People are reigniting the movement, but I call it revitalizing the core of the communities where we live. We feel very inspired and motivated by the awareness that people are understanding the importance of economics.”
As assets grow for the bank, it enables them to lend more money to small businesses, potential homeowners and others who will then reinvest that cash back into the community, cyclically compounding Black wealth.
“This is something we’ve been saying for a number of years,” said Day. “It’s wonderful that people are starting to get it.”
Jay Bailey, chairman of the Citizens Trust Next Generation Advisory Board, says what is happening is really about creating a lasting statement.
“If we took a 95-year-old, $400 million bank and turned it into a $1 billion bank it sends a message,” he said. “People are angry and they are thinking about what will last longer than the latest protest.”
But the effect of the #BankBlack movement isn’t limited to Citizens Trust. Michael Grant, president of the National Bankers Association, a non-profit trade organization that advocates for minority and women-owned financial institutions, said the financial phenomenon is something that has been brewing for quite some time.
“Killer Mike tapped into an undercurrent,” said Grant. “So the killings that people are talking about were catalysts that caused a volcanic eruption, but the lava was already boiling.”
Financial empowerment, Grant said, is the next phase of Black America’s centuries long evolution in which many had preached the gospel of economic independence.
“Once we got civil rights, the toxic side effect was we directed our money outside of the community more,” he explained. “But there’s been a yearning for decades to get it together economically.
“You’ve got your civil rights, your laws are protecting you. You have the same rights as anyone else,” Grant continued. “So what’s next? It’s time to take responsibility for our own survival in terms of economics. We can’t expect the majority to take care of our needs. Who’s responsible for the economic condition of Black people in America? It’s us.”
Despite the influx of cash to banks like Citizens Trust and the positive trend that many have waited years for, Black banks have a long way to go in order to catch up with other minority-owned financial institutions.
According to FDIC figures, of 162 banks that self-identify as Minority Depository Institutions (MDIs), only 24 are Black-owned. That’s down from 44 in 1986. Collectively, the entire group of MDIs carries $199 billion in assets, while the Black banks combined hold just under $6 billion. Of those, the two largest are Carver Federal Savings Bank with $743 million in assets, followed by OneUnited Bank with $621 million.
By comparison, the two largest banks on the MDI list are the Asian-American-owned East West Bank, with $33 billion in assets and the Hispanic-American-owned Banco Popular de Puerto Rico with $27 billion. The nation’s two largest banking entities are JPMorgan Chase with $2.4 trillion in assets and Bank of America with $2.1 trillion.
That’s quite a gap for a Black population of 42 million that has more than $1 trillion in collective buying power in an America with a gross domestic product of $18 trillion.
But the gap will widen if Black financial institutions are not strengthened. In fact, it could be disastrous, says Ken Smikle, president of Target Market News, a Chicago-based news and information company that monitors African American consumer trends.
“We have to at the minimum make sure that [Black banks] are able to attract sufficient numbers of deposits from new and old customers to maintain the FDIC minimum requirements,” he said, noting that the new trend is positive. “It’s extremely encouraging.”
“I think that gives everyone a reason to be optimistic about the future,” Smikle added. “Not only Black financial institutions, but the customers that they and sometimes only they serve.”
Smikle, who puts out the annual “Buying Power of Black America” report, remarked that the shock of recent police violence is something that typically serves as a crisis catalyst, pushing African Americans into action.
“This is our way of marketing to our folks,” he explained. “It has to come with messages that contain a sense of urgency. We don’t have the resources to politely ask folks to patronize our businesses when we are up against multibillion dollar competitors like Bank of America and Citibank who are just as desperate to have those same Black customers.
“We are living in a different era,” Smikle said. “Marketing to Black consumers by Black institutions has to be more aggressive and tied to our common mission and common survival.”
The call for Black people to invest in their own community is not new. As far back as Reconstruction, the drum has been beaten for economic self-awareness. The Freedman’s Trust Bank was established by Congress for the deposits of the formerly enslaved in 1864. It only lasted 10 years, but it spawned others like Maggie Walker to call for Blacks to save and invest their money in themselves and open up what became Richmond, Virginia’s Consolidated Bank and Trust in 1903 (now merged into Premier Bank).
Eventually other Black banks emerged, which allowed African Americans to borrow the cash needed to open businesses, buy homes and employ each other as was (and still is) the trend for most American ethnic groups. Banks of note include Capital Savings Bank in Washington, founded in 1888 (closed in 1902). But others continue to survive today including Mechanics and Farmers Bank in Durham, N.C., founded in 1907; Carver Federal Savings in New York, founded in 1949; First Independence Bank in Detroit, founded in 1970; and Liberty Bank in New Orleans, founded in 1972.
Like other banks, the Black-owned institutions rode the economic ebb and flow of the country. Between the end of the Civil War and the Great Depression, as many as 134 of the Black banks had opened, according to the Federal Reserve Bank of Richmond, and many have struggled to keep their doors open up to the present day.
What Killer Mike tapped into is undoubtedly a step in the right direction for Black banking and the Black community. Social media and Internet technology has simplified the call to action, said Teri Williams, president and chief operating officer of OneUnited Bank.
“With technology we can do it all online and we can amass all our dollars and channel all our dollars into the community,” she explained. OneUnited has attracted $3 million in deposits since the call to action, Williams said, adding that the call has the potential to turn into one of the biggest economic mass actions since the Montgomery Bus Boycott.
“I think this is that big,” she said. “We will see it evolve before our eyes. I see it with people who are lined up at our branches to open accounts. This is taking an action that is positive and at the same time expressing a no-confidence vote in the paradigm in terms of how Black people are treated in this country.
“It would be transformative,” Williams continued. “It would allow us as a community to have a seat at the table.”
Madison J. Gray is Managing Editor of EBONY.com and JETMag.com. Follow him on Twitter @madisonjgray.