Following up on decades of community advocacy for Black financial institutions, the Black Lives Matter movement has energized a stream of Black Americans to open accounts in Black-owned banks.
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Reacting to the most recent wave of shootings of Black men by police officers, thousands of African-American consumers across America are directing their dollars by opening checking and savings accounts in Black-owned banks.
A grassroots effort being called a “Spend Movement” found the nation’s Black banks receiving calls and online requests to open accounts.
According to National Bankers Association (NBA) President Michael Grant, “This is a movement that began over 100 years ago, but had become dormant as a consequence of racial integration.
The NBA, founded in 1927, is a consortium of 35 African-American, Hispanic, Asian, Native American and women-owned banks. The organization is headquartered in Washington, D.C.
There were 21 Black-owned banks in America with approximately $4.7 billion in assets in 2013, according to HBCU Money. But times have changed: There were 54 such banks in 1994, the Federal Deposit Insurance Corporation reports.
“Thousands have been mobilized to protest with their spending power. Many African-American consumers are linking the shootings with a sense of powerlessness, feeling undervalued and disrespected,” he explained.
Since July 8, literally thousands of checking and savings accounts have been opened at Black-owned banks.
The surge in new accounts at Black-owned banks springs, in part, from civil rights leaders and organizations who consistently have pleaded with Black Americans to support Black-owned financial institutions.
But this sudden interest in Black-owned banks also coincides with Black Americans’ protests against the police killings of Alton Sterling in Baton Rouge and Philando Castile near Minneapolis.
“The Black Lives Matter movement is a complement to an emerging economic empowerment movement that is engulfing Black communities all over America,” said Preston Pinkett, NBA chairman and CEO of City National Bank, headquartered in Newark, N.J.
Baltimore-based attorney Jelani Murrain plans to transfer his hard-earned money to a Black-owned bank, which he considers to be an institution of financial empowerment.
“The fact that Black people have dealt with financial discrimination is a matter of record,” Murrain, a father of three young children, told Urban News Service.
Murrain, 38, said he and his wife decided last week to open an account with Atlanta’s Citizens Trust Bank. While Washington, D.C.’s Industrial Bank is Black-owned, Murrain prefers to invest in Citizens, since his father lives in Atlanta.
“A strong, vibrant Black-owned bank will hopefully ensure Black people have an alternative if faced with financial discrimination in the future,” said Murrain.
Murrain said he likes the stability of Citizens, which was founded by five Black businessmen in 1921.
The nation’s third-largest African-American-owned bank’s assets exceed $350 million, according to published reports.
“A strong Citizens Trust Bank, of course, will provide better financial services to all people of Atlanta, not just Black people. The success of Citizens Trust is a win for the Black community and the United States.”
More than 8,000 people opened accounts at Citizens Trust between July 13 and 18, according to news accounts. New customers flooded the bank after hip-hop artist Killer Mike urged Black residents to transfer their money there.
And officials at Houston’s Unity National Bank say more than 700 new customers have opened accounts in the past week.
“It’s fantastic. It’s a beautiful thing. We’re blessed,” said John Scroggins, president and CEO of Unity. “It’s been overwhelming.” Scroggins said eight to 10 people open accounts in a typical week.
Scroggins said a local pastor told him he would withdraw his money from Chase Bank and hand Unity a check for $250,000.
“I’ve been in the lobby shaking hands and thanking customers,” Scroggins said. He described them as African-American men and women professionals. “One customer told me, ‘The cause is worth the wait.’”
The cause, Scroggins said, stemmed from recent, high-profile police shootings of Black men. “But,” he said, “the cause quickly turned to a social consciousness about Black empowerment and supporting Black-owned businesses.”
Scroggins said he plans to continue re-investing in the Black community by approving more small-business loans.
What’s the effect?
So, aside from symbolism, what does money in a Black-owned bank achieve for the Black community that it doesn’t deliver in a mainstream establishment?
Some Black Americans believe that investing in a Black bank will help circulate more money in the Black community, revive crumbling neighborhoods, secure a Black economic power base and enhance Black customers’ chances of receiving small-business loans.
“This is a very positive development for Black banks. They have always provided a disproportionate share of the small business loans and consumer loans to African-Americans.
Ironically, it seems that we have gone full circle back to where we were before desegregation.
“The Black community is turning inward and seeking to provide security for itself. And few would argue against the notion that nearly every major social issue plaguing Black people in America can find its roots in economic deprivation.”
Following her lead
Meanwhile Patrice Gaines, 67, said she will follow her daughter’s lead. Her daughter, Andrea Carter of Atlanta, 47, transferred her money to Citizens.
Gaines plans to open an account with Black-owned, New Orleans-based Liberty Bank. It was founded in 1972 with assets of $2 million. Alden J. McDonald, Jr. has led Liberty since day one and has grown its holdings to $374 million, according to the bank’s website.
“Andrea’s actions reminded me that I have a much longer view of this country and its history,” said Gaines, a former Washingtonian who now lives in Lake Wylie, S. C.
‘Pride’ in neighborhood
“She never saw U Street in Washington, D.C., when it was lively with Black businesses, including a Black bank,” she said. “There was a pride that came over me when I walked on U Street,” Gaines said.
“So, maybe this time is the time when my daughter can experience a fraction of the pride I felt when I lived in a neighborhood surrounded by Black-owned businesses, and I followed my mother into the Black-owned bank to get money out of her account.”
Gaines said she is proud to invest in Liberty Bank, which has opened branches in Kansas, Mississippi, Missouri and Texas.
Several African-American celebrities also plan to open accounts with Black-owned banks.
Performers Usher, Killer Mike and Jermaine Dupri joined Citizens Trust Bank in February.
Meanwhile, Gaines focuses on the big picture.
“My daughter has reminded me of the simple truth – that our money can still be used as a tool of power to make a point,” she said. “Sometimes in a seemingly integrated business environment, we forget this. It’s not lost on me that my daughter and a younger generation had to remind me of this.”
Hoping to manage the expectations of its expanding customer base, Black bankers are encouraging some of their prospective customers who have lost their check-writing privileges to work with bank employees to correct the situation.
Grant also cautioned Black consumers to be mindful of the voluminous requests that the banks are receiving online, in person and by telephone.
Michael H. Cottman of the Urban News Service contributed to this report.