The bank black movement has slowed from the heightened level of a year ago, but African-American investors have continued to put their hard-earned dollars into black-owned banks.
“The distinction that we find is the volume of the accounts being opened has dropped off substantially [since last year], but the benefit we see, even with the drop-off, is that we are still a focus of interest,” said Joseph Haskins Jr., president and CEO of Harbor Bank in Baltimore.
In July 2016, Haskins noted that thousands of checking and savings accounts had been opened at black-owned banks in a short period of time.
Deposits varied from the hundreds to the thousands of dollars with several high-profile sports stars, entertainers and business owners coming into his bank asking what they could do to help the bank black movement, he said.
From July through November, Harbor Bank realized close to $10 million in new account openings.
“The type of accounts we are seeing now are much more of a quality nature in that they are more sizable in terms of their deposits and tend to be broader based than just a depository relationship,” Haskins said.
Interest in black-owned banks began after several police-involved shootings of African-Americans, including Philando Castile in Minnesota and Alton Sterling in Louisiana, both shot and killed by law enforcement officers.
Rap star Killer Mike then began a media campaign to urge African-Americans to move their money to black-owned banks.
The movement quickly spread and the hashtag #BankBlack began.
“While it isn’t at the heightened level of six to seven months ago, [the movement] has continued,” Haskins said.
Currently, there are other programs that are being promoted throughout the community that talk about ways to enhance success with a concentration on the business side and with encouraging those to enhance their educational preparation to position themselves for employment, he said.
“Those kinds of themes and subjects have kept us pretty much in the discussion realm,” Haskins added.
Media attention has helped, but that too has cooled particularly in Baltimore, where a record crime spree has dominated discussions.
Statistics show the average Baltimore City household earns about $30,000 per year while the average white household earns $66,000, keeping the issue of the needs of the black community at the forefront, Haskins said.
“While not directly focused on the bank but, as a result of the focus on the needs in the black urban communities, indirectly, the bank stays as a part of the discussion,” he said.
That the movement remains has been evidenced by individuals such as Solange Knowles proclaiming she’s putting her money in black-owned banks and, more recently, billionaire Democratic Illinois gubernatorial hopeful J.B. Pritzker made a $1 million deposit in Chicago’s last remaining black-owned bank, Illinois Service Federal Savings.
Historically, black-owned banks have been a pillar in communities of color, institutions that stimulated local communities and financed customers who were turned away by major banks.
However, despite their significance, the number of black-owned banks has sharply declined in the past 15 years, while more than half in the U.S. closed shop between 2001 and 2016, according to a Black Enterprise Magazine report.
Meanwhile, the black banks that managed to survive the Great Recession are challenged by social stigmas, a lack of support from communities of color, and competition from larger banking institutions.
In 2001, there were nearly 50 while reportedly today there are 23, most with fewer than $400 million in assets.
“There are many reasons for the decline which includes the Great Recession, the disproportionate focus on the more challenged borrower and bank customers as well as being challenged by communities in general, where crime and cost of operation is significantly higher than normal,” Haskins said.
To some extent, there will be challenges that continue and there are several black-owned banks that are on the margin, he said.
Haskins noted a need to move beyond talk about black-owned banks, which often leads other communities and ethnic groups to believe the only interest and focus is on those from the black community, and those from low-income black communities.
“For black-owned banks, or any bank for that matter, to prosper it is important to have customers who have the capacity and ability to appropriately qualify for the different products and services resulting in earnings sufficient to support ongoing operations,” Haskins said. “My recommendation is that we talk more about black-owned banks from a community bank perspective which allows us to be able to participate by more broadly diversifying our client base in such a way that we ensure long-term survivability.
“Changing the way we talk about this does not need to change the focus, but it does aid in the way the market will perceive the bank’s role in the community,” he said.