Black-owned banks are disappearing

Entrepreneurs are leading the movement to save America’s black-owned banks, said Amber Burton. Lending institutions with “more than 51 percent of the voting stock in the hands of black owners” were once the only source of capital for many minorities amid the “redlining” and segregation of the early 20th century. Yet despite “decades of federal financial and regulatory support,” the number of blackowned banks has dwindled from 36 to 18. Because such banks make a “deliberate effort lending to customers shut out by the mainstream banks, they tend to make riskier loans,” which made them more susceptible to the mid-2000s housing bust. They also

share the problems of other small banks: limited branches, little money to invest in mobile-banking technology, and “industry consolidation” favoring the rise of “megabanks like JPMorgan Chase and Bank of America.” Amid a national racial reckoning, entrepreneurs and corporations have tried to step in. Netflix and PayPal committed to deposit millions in black-owned banks. Former Atlanta Mayor Andrew Young teamed with the rapper Killer Mike to start a financial-services company as part of a #BankBlack campaign. They’re beginning with a simple mobilebanking app. “Black people have understood capitalism,” said the rapper, “since they were the capital.”