Black-owned banks are essential to our community.
The first bank that catered to the Black community in the United States was Freedman’s Bank.
Established in 1865 by President Lincoln, it gave Black Americans financial literacy—who, at the time, owned less than 1% of the nation’s wealth.
Since then, Black-owned banks have been established all over the country, and many of them are thriving.
What’s the big deal about these banks, though?
- They are essential to serving underserved communities
- They help to close the racial wealth gap and usually hire more Black staff than White banks
- While White banks gave less than 1% of loans to Blacks, Black-owned banks gave 67% of mortgage loans to them
- They are the biggest sources of loans to Black businesses, communities, and churches
Now that you know the importance of these banks—if you didn’t already—which are the ones you should pay close attention to?
In a perfect world, the answer would be all of them.
However, the banks below all stand out for certain reasons.
First Independence Bank
Established in 1970, this is the sole Black woman-owned bank in the country.
Kiko Davis is the trustee of the Donald Davis Living Trust, which is the bank’s majority stockholder.
With three branches across the country, First Independence Bank seeks to help underserved and minority communities.
The bank has served roughly 10,000 customers, and it has nearly 3,800 ATMs across the country.
This is the biggest Black-owned bank in the US and also distinguishes itself as the first Black internet bank.
The bank helps minority communities by increasing their financial literacy through events and workshops.
OneUnited Bank also goes out of its way to serve low to medium-income persons.
It also has a wide reach; the bank is available in all 50 states.
Mechanics & Farmers Bank
This is the second oldest bank owned by U.S. minorities.
Founded in 1907, Mechanics & Farmers Bank is the country’s ninth biggest financial institution.
It is also the sole bank in South Carolina to be certified as a Community Development Financial Institution.
This means that the bank receives deposits and distributes loans which feed into a micro-economy that sustains itself and, in essence, keeps funds circulating in the state.
The bank has also taken an active role in educating Black communities on financial literacy.
It has a financial education program called Smart Money Habits that helps one to prepare for a financial future in which they are the ones in control.
Carver Federal Savings Bank
With $569 million in deposits and assets that total over $700 million, Carver Federal Savings Bank is the second-biggest Black-owned bank.
It has provided access to more than $50 million in capital and generated over 5,000 jobs through its participation in the Paycheck Protection Program.
It has also given small businesses across the country over 16,000 loans.
Carver Federal Savings Bank was founded in 1948 to serve Black communities whose access to mainstream financial services was limited at best.
Now, the bank has 7 branches in New York: Atlantic Terminal Branch, St Albans Branch, Malcolm X Boulevard Branch, 125th Street Branch, Flatbush Branch, Crown Heights Branch, and Bedford-Stuyvesant—Restoration Plaza Branch.
Established in 1972, Liberty Bank hails from New Orleans, Louisiana.
In five decades, the bank has amassed assets worth $965 million.
It also has branches in 9 different states.
Liberty Bank promises freedom, which it delivers in 3 ways:
- Freedom for an individual to reach her goals
- Freedom for a business to grow and attain success
- Freedom for a community to reach its full potential
By using its resources to fund the above goals, it is helping Black communities to grow financially.
The Bottom Line
Many more Black-owned banks exist, of course.
The ones on this list are just the tip.
However, Black-owned financial institutions have come a long way over the decades.
If you’re serious about your financial growth, these banks will help a great deal.