The National Bankers Association, a trade group representing the nation’s minority-owned financial institutions, said Wednesday that customers who do business with minority banks can be assured that their money is safe and in good hands amid the abrupt closures of Silicon Valley Bank and Signature Bank.
“In light of recent industry events, the National Bankers Association wants to assure customers that your money is safe with minority banks,” said NBA President and CEO Nicole Elam and Chairman Robert James II. “Minority depository institutions are very different from both SVB and Signature Bank which had high concentrations in crypto deposits and volatile venture capital. Minority banks are not exposed to riskier asset classes and have the capital and strong liquidity to best serve consumers and small businesses. If you are looking for a place to bring your deposits and have greater impact, bring your deposits to minority banks.”
James praised the Biden administration on its efforts to curtail bank failures.
“The Biden-Harris administration, the FDIC, and the Federal Reserve worked hard this weekend to make sure that these bank failures are the exception, not the rule, and that all Americans can continue to have confidence in our banking system,” James, who is the president and CEO of Carver Financial Corporation in Savannah, Georgia said. “I also applaud bipartisan leaders in Congress for keeping stakeholders informed about hard-earned deposits are being kept safe.”
NBA officials say the key to minority banks surviving has to do with a traditional banking model with diverse and secure assets that are well-capitalized with strong liquidity. They noted minority depository institutions originate nearly 40% of their mortgages to people of color, versus 10% by other banks, according to a Dallas Fed Study in 2022.
Plus, minority depository institutions originate 30% of small business loans to low-and-moderate income communities in comparison to 20% at community banks and 24% at large banks, officials said.