An estimated $150 million in equity capital has been invested in Black-owned banks since George Floyd was murdered last year, according to the National Bankers Association, a trade group that represents 24 of the country’s minority-owned financial institutions.
Those funds have put the nation’s Black banking community in a stronger position today than it was a year ago, according to the group’s board Chairman Robert E. James II.
“Our banks can now leverage that into $1.5 billion to serve minority communities,” James told CNN Business.
The cultural movement to support Black-owned banks along with other African American businesses received a major boost in the aftermath of Floyd’s murder on May 25, 2020, as many corporate leaders and everyday Americans sought ways to address longstanding socioeconomic disparities between Black and White America.
FDIC records show the nation’s 142 total minority-owned depository institutions, or MDIs, grew their combined assets more than 15% last year, from about $248.6 billion at the end of 2019 to more than $287 billion at the end of 2020. The FDIC says these banks are a small slice of the estimated $21 trillion US banking system, but they play an outsized role in serving Black and Brown communities.
Putting the funds into action
Minority banking leaders say they’ve spent the last year deciding how to invest the new capital in the communities they serve. For example, OneUnited Bank opened new customer service facilities in Miami and Los Angeles. The company is also hosting a free virtual conference promoting financial literacy beginning on June 19 in conjunction with its recently launched One Transaction program.
Both the conference and the program are designed to help close the racial wealth gap by teaching participants about six keys to building generational wealth. Those keys include maximizing savings and investments, owning a home, having a will, and owning a profitable business, according to OneUnited CEO Kevin Cohee.
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SOURCE: CNN, Chauncey Alcorn