Summary of recent news articles on black-owned banks 08/14/16-08/20/16

Black-owned banks tend to serve communities with weaker repaying ability that have been hardest hit by the financial crisis. This has led to black bank losses, and as larger banks expand to take market share in black communities, black-owned banks need to develop new business models to balance social mission and profitability.

Recent black community economic empowerment efforts have encouraged many African Americans to bank at black-owned banks and patronize black-owned business. The question is how can black-owned banks make this movement sustainable?

Black-owned Banks are Disappearing at an Alarming Rate. By Rob Wile, Fusion. August 17, 2016.

The number of black-owned financial institutions fell by 24% from 2007 to 2009, partly due to the consolidation trends taking place in the banking industry, but more importantly the lack of commitment from federal bank regulators to supporting minority banking institutions. A rep for the FDIC says they are particularly focused on this issue and how it relates to MDIs and are eager to work with interested parties.

Nonprofit BMe Deposits $1,000,000 in Black-Owned Bank, Calls on Others to #BankBlack. By Breanna Edwards, The Root. August 18, 2016.

BMe Community, a national network dedicated to strengthening communities with the help of black men, is redirecting $1 million of its deposits into OneUnited, the nation’s largest black-owned bank, making BMe the “preferred nonprofit” for the bank, while OneUnited has become the “preferred bank” for the organization.

As #BankBlack Moves Money, Black Credit Unions are Ready. By Zenobia Jeffries, Yes!Magazine. August 20, 2016.

While the number of Black-owned banks is down to only 22, there are 318 Black credit unions uniquely positioned to invest in their communities. Supporting African American institutions and businesses, particularly credit unions can directly help close the wealth gap between Black families and White families. Any time a credit union does well, a community does well, said Jim Nussle, head of the Credit Union National Association.

ShoreBank Successor Urban Partnership Seeks a Reboot. By Steve Daniels, Crain’s Chicago Business. August 20, 2016.

After burning through the capital from Goldman Sachs and Morgan Stanley, Urban Partnership Bank turns to Chicago headquartered banks this time to raise at least $15 million in fresh equity. One challenge UPB faces is to convince local banking chiefs that it won’t need further investment in the future, and the other is to be innovative enough to have a small-scale business model different from ShoreBank, said William Michael Cunningham.

Whenit Comes to Black Financial Institutions, Representation Matters. By Arionne Nettles, Chicago Defender. August 20, 2016.

Chicago has the strong Black middle class, but the number of Black banks in Chicago has dropped from 6 to 2 since 1994. William Michael Cunningham, a social investing advisor at Creative Investment Research said that the long-term benefit of preserving black-owned banks is protecting and building the Black community’s financial interests. Non-minority financial institutions did not represent the best financial interests of blacks.