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Empowering the Community: The Importance of Black-Owned Banks

Black-Owned Banks: The Necessity and CriteriaIn the United States, the history of black-owned banks dates back to over a century ago. These banks were established in response to discrimination and racism towards African Americans by the mainstream financial institutions in the country.

Starting in the 19th century, black-owned banks provided a necessary financial alternative that helped black communities grow and prosper. In this article, we explore the history and necessity of black-owned banks, as well as what defines a black-owned bank.

The History and Necessity of Black-Owned Banks

For many years, African Americans faced discrimination when it came to accessing basic financial services such as opening a bank account or obtaining a loan. Mainstream financial institutions, including banks, refused to provide them with these essential services primarily due to the color of their skin.

A study by the Federal Reserve Bank of Kansas City revealed that this discrimination resulted in significant wealth disparities between black and white Americans. For example, the median wealth of white households was $171,000, while that of black households was only $17,600 in 2016.

To address this inequality, black-owned banks emerged in the late 19th and early 20th centuries. In 1888, the first black-owned bank, the True Reformers Savings Bank, was established in Richmond, Virginia.

It was followed by other black-owned banks such as the Citizens Saving Bank and Trust Company in Durham, North Carolina, and the Liberty Bank and Trust Company in New Orleans, Louisiana. These banks provided African Americans with access to financial services, including savings and checking accounts, loans, and mortgages, which mainstream financial institutions denied them.

Over the years, black-owned banks have been instrumental in supporting black-owned businesses and investing in underserved communities. They have also played a crucial role in supporting the civil rights movement.

For instance, in 1955, the black-owned Tri-State Bank of Memphis created financial resources to support the Montgomery Bus Boycott, which was a significant catalyst for the civil rights movement. In more recent times, black-owned banks have continued to serve the community by supporting small businesses, affordable housing initiatives and providing financial literacy programs.

What is a Black-Owned Bank? The Federal Deposit Insurance Corporation (FDIC) regulates and insures banks in the United States.

To be considered a black-owned bank by the FDIC, a bank must meet two primary criteria. First, it must be at least 51 percent owned and controlled by African Americans.

Second, it must predominantly serve African American communities. One of the well-known black-owned banks in the country is OneUnited Bank.

With its headquarters in Boston, OneUnited Bank is the largest black-owned bank in the nation, with a focus on providing affordable financial services to underserved communities. The bank was founded in 1982 and has branches in California, Florida, and Massachusetts.

Some other criteria for black-owned banks include supporting small businesses and affordable housing initiatives. For instance, many black-owned banks focus on providing loans to small businesses in their communities, which helps create jobs and spur economic growth.

Additionally, affordable housing is an essential issue within many African American communities, and black-owned banks can help address this need by providing loans for house purchases and repairs.


In conclusion, black-owned banks have played, and continue to play, an important role in supporting the African American community. These banks provide access to financial services while also investing in significant community initiatives such as supporting small businesses and affordable housing.

As more people become aware of the importance of black-owned banks, they are becoming more popular, leading to increases in their deposit levels and ultimately empowering African-American economic independence, resulting in financial stability and wealth for their communities. Black-Owned Banks: The Necessity, Criteria, and Funding

Why Black-Owned Banks are Necessary

Black-owned banks are an essential part of the American financial system, primarily because they address the lack of access and disparities in financial education that many minority communities face. According to the National Bureau of Economic Research, the racial wealth gap is the most significant predictor of the disparities in financial access.

Black-owned banks play a crucial role in narrowing this gap and increasing economic stability for the African American community. One of the reasons black-owned banks are necessary is that they provide financial education to the communities they serve.

Financial literacy is essential for making informed financial decisions, yet many Americans lack this knowledge, particularly those from minority communities. According to a study by S&P Global, only 57% of black and Hispanic Americans are financially literate, which contributes to the disparities in overall wealth.

Black-owned banks address this issue by offering financial education and counseling programs that empower communities with the skills and knowledge necessary to make sound financial decisions. Moreover, black-owned banks provide an alternative financial system to traditionally white-owned banks that have historically contributed to the racial wealth gap.

Minority communities are often neglected and targeted by predatory lending practices and other unscrupulous financial transactions by mainstream lenders. Black-owned banks, on the other hand, provide access to banking services without discriminating based on race and ethnicity.

Funding for Black-Owned banks

Black-owned banks, like all banking institutions, require funding to operate effectively. However, one of the primary challenges that black-owned banks face is the lack of capital compared to mainstream banks.

This lack of funding comprises the ability of black-owned banks to make loans to their communities and support local businesses. One of the ways that individuals can support black-owned banks is through the Bank Black movement.

Bank Black is a concept that encourages African Americans to deposit their funds in black-owned banks and credit unions. The Bank Black movement is an effective way to create support and recognition for black-owned banks and to help them build capital.

It also acts as a means of empowering African American communities and increasing economic stability. Another source of funding for black-owned banks is the Community Development Financial Institutions (CDFI) fund.

The CDFI provides funding to banks, credit unions, and other financial institutions that serve underserved communities. The CDFI funds can be used for loans, grants, and equity investments in these institutions that promote community development and economic stability.

Furthermore, black-owned banks can also receive funding from the U.S. Treasury Department’s Minority Bank Deposit Program. This program provides deposits to minority-owned banks to help increase deposits and lending to underserved communities.


In conclusion, black-owned banks are a vital component of the American financial system and have played an essential role in narrowing the racial wealth gap by providing access to financial services and empowering communities through financial literacy programs. With proper funding from sources like the Bank Black movement, the CDFI fund, and the Minority Bank Deposit Program, black-owned banks can continue to thrive, grow and serve the communities that rely on them.

Why Bank Black? Advantages of Supporting Black-Owned Banks

Banking at Black-owned banks provide many advantages to individuals and communities, chiefly the economic power that it can bestow on the African American community.

By depositing money in black-owned banks, individuals can help uplift and build wealth within the community. Here are some of the key benefits of banking at Black-owned banks:


Black-owned banks often focus on serving low-income and minority communities, which traditional banks often overlook. These banks help to create much-needed economic investment, jobs, and community development.

By depositing money in black-owned banks, individuals can support African American-owned businesses and help to spur job creation and community revitalization.

Reduced Discrimination

Black-owned banks offer banking services without discrimination based on race and ethnicity. This differs from traditional banks that have a history of redlining – denying lending opportunities, insurance, and access to financial services to people based on their race or ethnicity.

By banking at a Black-owned bank, customers can erase concerns about discrimination while enjoying the same benefits and services offered by traditional banks.

Community Investment

Black-owned banks invest heavily in their communities, often providing microloans to small businesses, sponsoring local community development programs, and promoting economic growth via initiatives that have a positive impact on the community. Depositing money in black-owned banks creates a circular flow of capital that can help create jobs and businesses within the community.

Considerations Before Choosing a Black-Owned Bank

When selecting a Black-owned bank for banking services, there are several critical factors to consider to ensure that it is the right fit for your financial needs. Here are some of the primary considerations that you should make before choosing a Black-owned bank:

FDIC Insurance

Black-owned banks that are members of the Federal Deposit Insurance Corporation (FDIC) insure their customers’ deposits up to $250,000. This coverage ensures that each depositor’s account is backed by the full faith and credit of the United States government.

Therefore, it is crucial to confirm that any Black-owned bank you consider is FDIC insured before opening an account.

Online Banking

Online banking is an essential feature for most banking customers, particularly in the digital age. Black-owned banks that offer online banking make it easy for customers to manage their finances and access their accounts from the comfort of their homes or mobile devices.

Before selecting a Black-owned bank, make sure that it offers online banking that is user-friendly and available whenever needed.

ATM Access

Access to ATMs is crucial for banking customers who need to make deposits, withdrawals, or transfer funds conveniently. Ensure that the Black-owned bank you choose has a convenient ATM network or partnerships with other institutions that provide widespread and low-cost access to ATMs.

Services Offered

When selecting a Black-owned bank, it is vital to consider the financial services that the bank offers and whether they align with your financial needs. Check the bank’s website to see the services offered, such as checking accounts, savings accounts, loans, and credit cards, and compare them to your banking needs.

In conclusion, banking at Black-owned banks not only supports African American businesses, but it also uplifts the entire community by creating jobs, promoting community development, and investing in the community. When choosing a Black-owned bank, customers must consider all essential features, such as services offered, online banking, ATM access, and FDIC insurance to ensure they provide the necessary financial services and guarantee the depositor’s safety.

National and Regional Black-Owned Banks

There is an increasing number of Black-owned banks with multiple locations throughout the country. These banks offer a range of banking products and services such as checking accounts, savings accounts, and loans.

Here are a few examples of national and regional black-owned banks:

1. Citizens Trust Bank – This bank was founded in 1921 and is a leading Black-owned bank with multiple locations throughout Georgia, Alabama, and Tennessee.

Citizens Trust Bank offers a range of financial services, including personal banking, business banking, and online banking, to name a few. 2.

Industrial Bank – Founded in 1934, Industrial Bank is a regional Black-owned bank with branches in four states, including Maryland, Virginia, and Washington, D.C. The bank offers commercial banking services, personal banking services, and wealth management solutions. 3.

OneUnited Bank – Established in 1982, OneUnited Bank is the largest Black-owned bank in the United States, with several locations in California, Florida, and Massachusetts. OneUnited Bank offers mobile banking, online banking, and mortgage loans, among other services.

4. Unity National Bank – Unity National Bank is a Texas-based Black-owned bank with branches in Houston, Missouri, and Dallas.

The bank offers a range of banking services, including checking and savings accounts, personal loans, and business loans.

Local Black-Owned Banks

There are also several Black-owned banks with limited locations that provide essential banking services to their local communities. These local banks help underserved communities to access banking services, loans, and financial assistance that they might otherwise not have access to.

Here are a few examples of local black-owned banks:

1. Alamerica Bank – This Black-owned bank is located in Birmingham, Alabama, and offers personal banking, business banking, and loans services.

2. Commonwealth National Bank – Commonwealth National Bank is headquartered in Mobile, Alabama, and has been serving the community since 1976.

The bank offers a range of banking services, including mobile banking, personal banking, business banking, and loans. 3.

First Independence Bank – First Independence Bank is located in Detroit, Michigan. The bank provides personal banking, commercial banking, and lending products.

4. The Harbor Bank of Maryland – The Harbor Bank of Maryland is headquartered in Baltimore, Maryland, and offers personal banking services, business banking services, and lending services.

5. Mechanics & Farmers Bank – Mechanics & Farmers Bank was founded in 1907 and is located in Durham, North Carolina.

The bank offers traditional banking services such as personal banking, business banking, and loans. 6.

Optus Bank – Optus Bank is a Black-owned bank located in Columbia, South Carolina. The bank offers various banking services, including online banking, personal banking, business banking, and loans.

7. Citizens Bank – Located in Nashville, Tennessee, Citizens Bank is a community bank that offers personal and business banking services.

8. Tri-State Bank of Memphis – Tri-State Bank of Memphis is one of the oldest Black-owned banks in the United States, established in 1946.

The bank is located in Memphis, Tennessee and provides services like personal banking, business banking, and loans. 9.

Columbia Savings & Loan – Columbia Savings & Loan is located in Cincinnati, Ohio. The bank provides personal banking, business banking, and loan services.

It is important to support these local Black-owned banks because they empower communities by creating jobs, sponsoring local community development programs, and promoting economic growth through initiatives that have a positive impact on the community. By supporting these banks, African Americans can take ownership of and build wealth within their own community.

Finding Black-Owned Banks: Methods for Accessing Branch Locations

While it is essential to support black-owned banks, finding these banks may not always be easy. To access black-owned banks, customers often need to know where these banks are located, what services they offer, and whether they are a good match for their financial needs.

Here are some methods to utilize when seeking out black-owned banks:

1. Online Search Engines: One of the easiest ways to find black-owned banks in your area is to conduct an online search engine search such as Google, Yahoo, or Bing.

Search for keywords such as “black-owned banks near me” to get a list of banks that you can visit in-person or explore online. With the advent of digital banking, many black-owned banks today offer online banking services, allowing customers to do everything from opening accounts, depositing checks, transferring funds, and paying bills from their own mobile devices.

2. Black-Owned Bank Associations: Many black-owned banks and credit unions are members of Black banking associations, such as the National Bankers Association or National Black Credit Union Association.

These organizations provide a list of certified and verified black-owned banks throughout the country. Customers can visit these associations’ websites to find a list of black-owned banks near them.

3. Community Groups: Engage with community groups that specialize in promoting and supporting black-owned businesses such as the Urban League, Black Business Owners association, and the National African American Chambers of Commerce.

They can provide individuals with insight and information on the best black-owned banks to support in their area. 4.

Social Media: Social media today has become a useful tool in finding information about black-owned banks. Customers can visit community-focused Facebook groups, LinkedIn groups, Twitter, and Instagrams to find firsthand information, reviews, updates, and recommendations for black-owned banks in their areas.

Organizations like #BankBlack encourage people to use social media to promote and support black-owned banks, share experiences and information among communities about black-owned banks. 5.

Referrals: Customers can ask family, friends, and acquaintances for referrals to black-owned banks. Referrals can be more reliable when they come from trusted sources who have had experiences utilizing the services and products of a particular black-owned bank.

Once customers have found black-owned banks they’re interested in trying out, it is essential to conduct enough research to make a well-informed choice that aligns with their financial goals and needs. Customers should visit the bank’s website and examine its services, fees, rates, reviews, and other vital information.

For example, customers should review institutions that are FDIC-insured and check the customer service reviews. While it is essential to support Black-owned banks, customers should ensure that the bank they choose provides them with comprehensive banking services, fit for their financial goals, and aligns properly with their overall banking security.

In conclusion, there are different methods individuals can use to find black-owned banks. They include conducting online searches, seeking out black-owned bank associations, community groups, referrals, and social media.

Customers should also carry out the necessary research to ensure the black-owned bank meets their financial needs and caters to their financial goals. By doing this, individuals can help support black-owned banks and contribute to strengthening the African American community.

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