Why Blacks Need Black-Owned Banks?
By Robert Stitt
You’ve probably read in the news or got a tweet about the handful of celebrities who say they are going to start supporting Black-owned banks. Whether they will actually move their wealth into these institutions remains to be seen. Of course, due to security rules, the public will likely never actually know what they have done or not done.
The reality of the situation is that Black America has in excess of $1.1 trillion in buying power. Less than one percent of that wealth (.43 percent according to Bossip) is in Black-owned banks. In more firm numbers, there are 19-21 Black owned banks depending on who you ask and what is considered “Black-owned.” Regardless, in 1994 there were 54 of them. That means that more than one Black-owned bank folded each year, every year, for the past 22 years without another one to take its place.
WatchTheYard, notes that if you include Black-owned credit unions, the number goes up to 35. Even so, the number of Black-owned banks and credit unions combined is still almost 20 institutions less than there were Black banks alone 22 years ago.
What sort of banks are closing? Just last January (January 23, 2015), Highland Community Bank in Chicago closed its doors after 45 years in business. Just under a year prior, another Chicago bank, Covenant Bank, shuttered its doors and windows after 40 years.
Of those Black-owned banks that remain, the majority have average holdings of only $100 million. In fact, there are only three with assets in excess of $500 million. One United Bank is the largest Black-owned bank in the nation with assets of just over $590 million. Seaway Bank and Trust in Chicago has just over $573 million, and Liberty Bank and Trust in New Orleans has just over $545 million in assets.
With over 37.5 million Blacks in America, these numbers do not add up. Where is all of the money at? One thing is certain if Black America does not support black America, who will?