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By 1976, there were more than 50 Black-owned banks across the United States. Today there are just 18 of these vital community anchors left.
Black-owned banks deploy resources that uniquely address the needs of Black-owned businesses, homeowners, and community nonprofits. As these institutions close, the needs of Black entrepreneurs and households go unmet.
Forty-nine percent of Black households were underbanked or completely unbanked, compared to just 15 percent of White households in 2019, according to the Federal Reserve. The US Census Bureau’s Annual Survey of Entrepreneurs found that Black families are rejected for credit at twice the rate for white applicants.
All of this has profound intergenerational consequences on wealth. As Black banks close, Black families go underbanked–and America’s racial wealth gap widens.
Revitalizing Black banks ensures equitable access to capital for underserved communities of color and will help close America’s racial wealth gap. That’s the mission of the National Black Bank Foundation.
Communities saturated with corner stores and fast food restaurants but lacking grocery markets create obvious challenges in maintaining a healthy diet. Similarly, neighborhoods with costly check-cashing and payday loan operations on every block but few to no banks make it difficult to build wealth.
Unfortunately, that’s the reality for many people of color.
The lack of access to basic financial services has forced Black households to rely on costly alternatives like check-cashing services, payday loans, money orders, and prepaid credit cards. Over a financial lifetime, those fees can total upwards of $40,000.
Breaking this cycle of financial exclusion requires nurturing the banks that have locations near and serve people of color. For most people of color, those are Black-owned banks.
Putting Black banks on a glide path to greater capitalization sets Black families on track to generating wealth—real wealth, the sort that white families pass down at an amount almost 200 times greater on average than Blacks. That’s the sort of transformative solution families need to escape the continuum of poverty.
The National Black Bank Foundation provides nonprofit expert legal, regulatory, and operational support to Black-owned banks as they work to scale to meet underserved communities. Join us, and together let’s erase America’s racial wealth gap.
NBBF board includes government, financial services, civil rights, sports, entertainment, and philanthropic exe
NBBF board includes government, financial services, civil rights, sports, entertainment, and philanthropic executives and thought-leaders.
