The Equity Factor

A Movement to Put Money Into Black-Owned Banks

"We need to start using our dollars in a purposeful way."

A Miami #BankBlack event organized by OneUnited (Credit: OneUnited)

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A text message got Justin Garrett Moore (@jgmoore) involved in the #BankBlack campaign.

“There basically was a text message going around, throughout the whole black community talking about banking black,” he says.

The text message reflected a widely-shared desire to both support black-owned businesses while also making a show of the economic power of black communities throughout the United States. The message invited recipients to an ongoing boycott of large retailers, rotating each month, starting with Target. It included a call to boycott Coca-Cola products for a month too, for good measure. It also included a call to put $100 into a black bank, sparked by artist and activist Killer Mike’s on-air invitation to do so in early July.

Killer Mike invited all people, not just black people, to move at least $100 into a savings account at a black-owned bank, in solidarity with #BlackLivesMatter. As spelled out in the Movement for Black Lives Policy Platform, released this week, #BlackLivesMatter is about more than the physical violence of police inflicted upon black people. It is also about the structural economic violence that puts black lives at risk in the first place by systematically discriminating against black people when it comes to jobs, housing, small business lending and other opportunities to build wealth and move up the economic ladder.

“Having more wealth and more exchange and accumulation of wealth and property in the black community could, I think, create a different context for a lot of these conversations about community policing or safety,” says Moore, an urban planner and designer and the director of New York City’s Public Design Commission.

Moore created a Google spreadsheet to help himself and other #BankBlack supporters figure out which of the 21 black-owned banks and credit unions was the best option for them, based on product offerings, online and mobile service quality, branch and ATM locations and financial health of the institution. He continues to do research and add to the document in response to questions from friends and others on social media. “It’s a living document,” he says.

The #BankBlack campaign could provide a tremendous boost at a time when many black-owned banks have been in crisis for years. On the South Side of Chicago, a Ghanaian-American family recently rescued Illinois Federal Savings & Loan from closure. Meanwhile, Chicago’s largest black-owned bank, Seaway, is in the middle of negotiating a deal to stay alive that some worry may result in the loss of its majority-black ownership.

For at least some black-owned banks, the #BankBlack campaign is already having big results. In the first five days after Killer Mike’s call, 8,000 people reportedly opened up accounts at Citizens Trust Bank in Atlanta. By the middle of July, #BankBlack supporters deposited $3 million in new accounts at OneUnited, the largest black-owned bank in the country.

“When this happened, things just really exploded, exponentially,” says Teri Williams, president and chief operating officer at OneUnited. “We would open about 50 accounts a day prior to #BankBlack, and now we’re opening up to a thousand accounts a day since three weeks ago.”

Moore was one of them, saying in his opinion OneUnited had the most user-friendly online service of them all.

In OneUnited’s case, with physical branches in and around Boston, Miami and Los Angeles, the infusion of capital will help make a difference in ways that are particularly relevant for black communities in those areas.

Fifty-two percent of black households rent their homes (compared with 38 percent of Hispanic families and 25 percent of white families). “The majority of our lending is multi-family housing property in low- to moderate-income communities that offer affordable rents,” says Teri Williams, president and COO at OneUnited. “And we do inspections before lending and annual inspections to make sure buildings are up to code, in good repair, that we’re not lending to slumlords.”

As a federally-certified community development financial institution, OneUnited is required to focus their lending on serving residents of low- to moderate-income neighborhoods. Three percent of their portfolio is also in commercial real estate, and seven percent in consumer lending, mostly in homeownership. They’ve been working with different local partners in Miami to support first time homebuyers in an already hot real estate market.

Meanwhile, “In Boston, we’re going to offer a product specifically for community land trust homes,” says Williams. OneUnited is working with the Dudley Street Neighborhood Initiative to offer community land trust home loans starting this fall. “We see that as being a great product for our community, because it allows our community to build equity in a home while at the same time keeping the affordability of homeownership in mind,” Williams adds.

For OneUnited, #BankBlack has been a sudden and welcome validation for a strategy shift they began making about five years ago. “We said at one point we want to be like Bank of America, we wanted to acquire banks around the country, and we want to connect them and have this branch network,” Williams explains. “We rejected that, or we elevated from that, we recognized that we didn’t want to just be Bank of America with a black face.”

They decided they wanted to be an authentically black bank, Williams says. Of course they had always been a black-owned bank, starting out in Boston, and they expanded to the other metros by acquiring other black-owned banks. By “authentically black,” Williams means they became less afraid of offending people by being up front about their black ownership and their focus on serving black communities first.

“We don’t want to give the impression that we are only for black people,” says Williams, they’re still an equal-opportunity lender and employer, but recognizing a crisis of money within black communities, they wanted to connect with those communities more explicitly. They changed their marketing tactics and presentation, and expanded access to products like second chance checking accounts. According to Williams, about a third of the black community has a ChexSystems record, meaning that they’ve chronically overdrawn checking accounts or bounced checks in the past, they might still owe money to their former banks, and are denied access to a new bank account at most other places. OneUnited’s second chance accounts are designed to bring them back into the banking fold.

Williams also hopes #BankBlack will help with changing mindsets. “There is a part of our community that believes that if you are black-owned, you’re less than,” she explains. “We have that sense of, as we call it, their ice is colder.” In other words, some in black communities hold black businesses to higher service standards than white-owned businesses, for deeply ingrained historical and cultural reasons.

“People need to understand not only do we have the expertise in our community to provide quality services, but we need to start using our dollars in a purposeful way, because black-owned businesses are more likely to hire black people, which could be one of the tools that we use to address the unemployment that is going on,” says Williams. “It is as powerful as the right to vote. We’re starting to vote with our dollars.”

The Equity Factor is made possible with the support of the Surdna Foundation.

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Oscar is Next City's senior economic justice correspondent. He previously served as Next City’s editor from 2018-2019, and was a Next City Equitable Cities Fellow from 2015-2016. Since 2011, Oscar has covered community development finance, community banking, impact investing, economic development, housing and more for media outlets such as Shelterforce, B Magazine, Impact Alpha and Fast Company.

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