Tenn. Black-owned bank helps demolish barriers
Bridging racial wealth gap is aim of business
NASHVILLE, Tenn. – The day Robert Sherrill stepped into freedom, he stepped into a new life.
He made a commitment to himself and to his family: He would build something great.
But there were barriers. Sherrill previously spent five years in federal prison for drug possession charges, and there aren’t many professional opportunities for the formerly incarcerated, men and women who are often barred from industries and suffer from employment discrimination.
Then Citizens Bank in North Nashville – the oldest continuously operating, Black-owned bank in the U.S. – looked past factors that other banks viewed as deal breakers.
For decades, Citizens has served people who are turned away from traditional banks due to poor credit, financial barriers, past indiscretions, racial or ethnic discrimination or some other reason.
“They know me, they know my business. They trust me,” said Sherrill, whose commercial banking relationship with Citizens was foundational to the start of his business, a commercial and construction cleaning company based in Madison, Tennessee.
At the core of that mission is bridging the wealth gap between Black and white Americans, while also serving all people.
“We’re here for the individual, business and nonprofit that just doesn’t get the attention,” said Citizens chief relationship officer Jeff McGruder. “We are providing capital for people to participate in Nashville’s climb. We’re answering the call.”
‘Beat up, chewed up and spit out’
Sherrill’s climb from being incarcerated to owning his own successful business took sacrifice. But he knew it was the only way he could feasibly provide for his family.
In 2019, he was pardoned by thenTennessee Gov. Bill Haslam, and he received a pardon in 2021 from thenPresident Donald Trump.
Despite the pardons, Sherrill said discrimination has impacted him twofold as a Black man with a felony on his record.
“It’s been extremely hard, not only to get people to trust me, but to have any type of conversation about access to capital,” he said.
As the founder of Imperial Cleaning Systems, he slowly built the company over several years. It now employs 37 people, working for clients across the state.
He credits his trusting business relationship with Citizens as a crucial part of his success in scaling his business, but he said more needs to be done to combat discrimination on the basis of felony status and race.
“We need more Black institutions that understand our people and what we’ve been through,” Sherrill said. “We’ve been beat up, chewed up and spit out. It’s important that banks like Citizens remain.”
Building trust
Black communities were not served equally by mainstream banks during the 20th century, especially when it came to lending practices.
Home mortgages and small business loans, among other banking resources, helped white families grow wealth over many generations. Black families turned to nontraditional money services out of necessity.
Data shows there is still a lack of trust between mainstream banks and marginalized communities – specifically Black and Hispanic populations.
According to a 2021 survey by the FDIC, 11.3% of Black households were unbanked – meaning no one in the household had a checking or savings account with a bank or credit union. That’s compared to 2.1% of white households.
The most commonly cited reason (40% of respondents) for not having a bank account was not having enough money to meet the minimum requirements, while 33% of respondents said they don’t trust banks.
McGruder said Black-owned banks such as Citizens need to work with the Black community to rebuild that trust. “It’s important for us to get really loud, because those communities still feel that hurt and they still feel the mistrust in banking in general,” he said. “We are regulated, and we will take care of your deposits. And you can trust that we will get you the credit you need to build your community.”
Strength in numbers
Citizens and other Black-owned banks across the country have reported an increased interest from the general public in recent years – especially since the death of George Floyd and resulting nationwide protests during the summer of 2020.
Many of those banks have prioritized modernizing systems to compete with larger banks. The National Black Bank Foundation assists with that process.
Rod Chavez, executive director of the foundation, said the organization partners with banks on projects such as updating online banking, consolidating debts and improving investment strategies.
“NBBF’s core mission is to help the bank stay in existence, operating as lean and mean as they can,” Chavez said. “From our perspective, we want to support and show up and help be the backbone of the banks. We bring in the technical expertise.”
The foundation also works to join banks together to leverage their strengths. One such example was the $25 million deal between Major League Soccer and seven Black-owned banks, gathered together by NBBF. Deals like that provide capital to Black-owned banks which can be loaned out in the form of home and small business loans in Black communities.
“By doing these syndicated transactions, the banks are coming together to do something larger than they could alone,” Chavez said.