Posted on August 17, 2009

Banking on Our Own

Zachary Raynell Rinkins, Black Enterprise, August 14, 2009


It’s expensive to be black in America. Recent studies and lawsuits prove we are overcharged for virtually everything. We are charged more for insurance, loans and mortgages than most of our racial counterparts with similar income, employment and credit backgrounds. Paying more money for vital services robs us of our quality of life and our future.

Why does Wall Street get away with this? Because, black Americans don’t invest in black-owned banks. If our banks remain under-capitalized they will never compete with mainstream banks. No competition means you get overcharged.


According to the U.S Census, black America will approach $1.2 trillion in disposable income by 2012. Yet, none of Black Enterprise’s Top 25 Black-owned Banks has $1 billion in assets. Their combined assets total nearly $6.4 billion. That means that out of $1.2 trillion we invest less than one cent per $1000 of our disposable income in our own financial institutions. In effect, other communities can depend on black money to finance their future.

Our biggest obstacle for starting a business, funding college tuition or buying a home is lack of access to capital. Capital comes from financial institutions. If black banks don’t have capital that means they can’t afford to help you buy a home, start a business or send your child to college. Your only option is to go to banks that will overcharge you and not invest in your community.

Credit and capital are the lifeblood of the American economy. If black-owned banks lack credit and capital black America will remain economically anemic. More deposits means higher revenue. Higher revenue means more investment in black life. More investments mean stronger black businesses. Stronger black businesses mean higher black employment rates. That means more homeownership, community investment and business development. But, economic empowerment is a two party effort.

Black owned-banks must do more to attract black customers. {snip} Black owned blacks could offer free children’s savings accounts to schools and churches that serve minority populations. Banks could also advertise in black media. And, sponsor events that matter to us.


After black-owned businesses produce competitive products and serve us, it is our responsibility to give them a fair shot at our business. We could consider directly depositing 10 percent of our paychecks into black banks. We could purchase life insurance from black insurers and companies. We could also invest for retirement {snip}.