We have been discussing black owned banks lately here at Urban Intellectuals and look what I discovered in the process. Apparently, we are not the only ones concerned with black owned banks and the economical future of the black community. To your, and my, surprise, the Congressional Black Caucus has been thinking about black owned banks as well.
Last month, the Congressional Black Caucus Foundation was hosting its annual conference in Washington, DC. They used the platform to make a relatively significant announcement that they will donate $5 million investment in African American owned banks. Their aim is to boost lending in the black community.
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The $5 million dollars isn't going to exactly save the black owned banks, but the hope is to encourage other private investors to join in and invest as well. It is widely known and accepted these banks are a critical source of lending in our communities, but are often overlooked by investors and even the black community themselves.
With increased lending power, black owned banks can assist small, black owned businesses in their efforts to get much needed business loans to provide an economic base for the community. The financial crisis was tough on all banks, but many of the black owned banks really suffered through the past five years.
“This investment is an important step toward achieving our goal of economic equality,” Shaunise Washington, chief executive of the foundation, said Tuesday at a news conference. “Minority banks are an important source of accessible financial services and are key to reaching financially under-served communities.”The foundation selected five black-owned, fiscally sound banks scattered across the country: Industrial Bank in the District, Liberty Bank & Trust Co. in New Orleans, Mechanics & Farmers Bank in Durham, N.C., Seaway Bank & Trust Co. in Chicago and City National Bank of New Jersey in Newark.
Each institution will receive $1 million through certificates of deposits guaranteed by the Federal Deposit Insurance Corp. The foundation plans to track the progress of the investment during the year, said Rep. Chaka Fattah (D-Pa.), chairman of the foundation board.
“The pillars of power have to be both political and economical,” Fattah said. “We are leaning forward to say we are going to make an investment and expect others to follow.”
Industrial Bank President B. Doyle Mitchell Jr. said the bank will use the investment primarily to fund small-business loans and some affordable-housing development. He said loan demand has been particularly strong among government contractors.
If we believe black owned banks are an important part of our future in this world and country, then their support is something we need to throw behind them quickly.
Over the last twenty years, black owned banks have shrank over 50 percent, according to the Congressional Black Caucus. As you know from our previous article, there are currently 21 black owned banks in the country and they more than likely need your support. Without your assistance, they are more than likely to shrink again.
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If we don’t support black owned banks in our community and increase this number, the black community could be positioning itself to be forced on depending on payday lenders, check cashing, and alternative financial providers with astronomical interest rates.
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