Summary of recent news articles on black-owned banks 08/21/16-08/30/16

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?

What Can Be Done to Save Black-Owned Banks? By Kevin Wack, American Banker. August 30, 2016.

Today there are 23 African-American-owned banks -- a 58% decline since 1994, faster than the decline of U.S. commercial banks. Cunningham projects that only four or five African-American-owned institutions will remain open in 2028. And he criticizes the federal regulators for failing to take greater advantage of new tools under the Dodd-Frank Act that were designed to increase diversity in the financial sector.

Illinois Widens Playing Field for Chicago’s Black Entrepreneurs. By Johnny Magdaleno, Next City. August 26, 2016.

On August 24, Illinois Governor Bruce Rauner announced his state was widening the playing field for minority and women entrepreneurs by opening up applications for the first program aimed at business owners from disadvantaged communities, called Advancing the Development of Minority Entrepreneurship. The day after, he also held a ceremony to mark information technologies as Illinois’ first sheltered market. “African-American businesses are starting at an increasing rate, but the issue is they’re not profiting at an increasing rate,” Cate Costa, director of entrepreneurship at the Chicago Urban League says.

Is The Black Bank Movement A Fad Or Here To Stay? By Leoneda Inge, North Carolina Public Radio®-WUNC. August 26, 2016.

Mechanics and Farmers Bank, one of the oldest black-owned banks in the country is based in Durham, where bank officials report a rise in new accounts and in the #moveyourmoney movement to keep the momentum going. Maceo Sloan, who was the chairman and CEO of NCM Capital in Durham for many years, said “A hundred dollars is going to do nothing for their bank. What needs to happen, is that African Americans need to go take all their money out of all the other banks and put it in their black banks, that might make a difference.”

Another Black-Owned Bank Cements Over $1M in Deposits as #BankBlack Movement Continues. By Kiersten Willis, Atlanta Black Star. August 26, 2016.

Washington D.C.-based Industrial Bank crossed the $1 million mark when customers flocked to the institution. It earned $2.7 million in new deposits due to an increase in patronage by 1,500. Black Enterprise reported the surge is thanks to D.C.-area activists who launched #DivestToInvest. It encouraged African-Americans to support Black-owned banks. Industrial Bank’s achievement follows OneUnited Bank’s $10 million transfers in less than a month.

#BlackBizMatters: 3 Reasons to Bank Black. By Kali Wilder, Black Enterprise. August 25, 2016.

National Bankers Association President Michael Grant explains how banking black strengthens communities and small businesses. To bank black is a progressive way to vent frustrations. And more deposits in black-owned banks means more lending to small businesses in our community, therefore more jobs and more wealth. Finally it’s consciousness-raising. The movement is a great opportunity to teach people about economic education, how to spend and manage their money, and how to read contracts.