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Black Owned Financial Firms
In recent years, there has been a growing interest and support for Black owned financial firms, which refer to financial institutions or businesses that are owned and operated by Black individuals or groups.
These firms are on a mission to address the racial wealth gap and promote financial literacy and empowerment within the Black community. They offer a wide range of financial services, including banking, investment management, insurance, and more.
With their focus on serving and uplifting the Black community, black owned financial firms have become a driving force for creating economic growth and building generational wealth. This article explores the impact and importance of Black-owned financial firms, and the ways in which they are working to create positive change in the financial industry.
Key Takeaways
- Black owned financial firms range from banks and credit unions to investment firms and funds
- Banking Black enables Black-owned banks to provide more access to capital for Black businesses
- Your needs and location are key considerations when seeking to bank Black
Disclaimer
The contents of this article are for educational purposes only. They are not intended to be a source of professional financial advice. You will find experts on financial planning, financial management, and real estate here. More on disclaimers here.
What is a Black-owned financial firm?
Black owned financial firms refer to financial institutions or businesses such as banks, credit unions, investment firms, and other financial services that are owned and operated by Black individuals or groups.
These firms aim to provide services and opportunities for the Black community while also promoting financial literacy and empowerment. They play an important role in creating wealth and economic growth within the Black community, and are increasingly gaining recognition and support.
History of Black-owned financial institutions
Black owned financial institutions have been around for centuries now. It all began with initial meetings among African Americans interested in establishing their own banks and federal credit union around 1851, before the civil war. This eventually paved the way for the first Black-owned bank.
The Savings Bank of the Grand Fountain United Order of True Reformers in Richmond, Virginia was the very first bank that was owned by African Americans in the United States. The institution was founded on March 2, 1888, by Reverend William Washington Browne and opened on April 3, 1889.
Even though the True Reformers bank was the first Black owned bank chartered in the United States, the Capitol Savings Bank of Washington D.C. was the first to actually open on October 17, 1888. At first, the bank operated from his home and later at 604-608 North Second Street.
One of the very important reasons why the first ever Black-led bank was set up was to enable African Americans to accumulate enough wealth and resources to generate adequate capital to set up other service-based businesses like insurance companies, catering businesses, nursing homes, among others. These financial institutions also presented an opportunity for African Americans to learn and acquire accounting skills and techniques that would help them handle and manage large cash volumes.
Black-Owned Banks
Finance is a major part of any economy. For sustainability in this day and age, financial literacy is very vital as it helps in the acquisition and management of wealth and assets. Most folks use bank accounts to manage their day-to-day spending and the importance of working with Black-owned financial institutions has risen to the surface as an important issue.
What is the Largest Black Owned Bank?
The largest Black-owned bank in the United States is OneUnited Bank, which is headquartered in Boston, Massachusetts. As of 2021, the bank has assets of approximately $750 million and operates branches in Massachusetts, California, and Florida.
OneUnited Bank was established in 1982 as Unity Bank and Trust Company, and has since grown to become a leading provider of financial services to underserved communities of color. The bank offers a wide range of services, including personal and business checking accounts, savings accounts, and loan products, and has a strong commitment to promoting economic justice and social equity in its communities.
What is Banking Black?
Banking Black is actually not a new concept. It’s something that has been around for decades and most recently, has been accelerated by the Black Lives Matter movement.
Black Owned Banks & Federal Credit Unions
A Black-owned financial institution and credit union is that which provides services to minority communities and whereby 51% or more is Black-owned.
A Black-led financial institution or credit union is that which the majority of the board of directors are Black and the bank primarily serves Black communities. The FDIC certifies banks that are Black-owned or Black-led (the FDIC term is African American Minority Depository Institution).
Are There any Black Owned Hedge Funds?
Indeed, there are quite a number of Black-owned hedge funds. While the number of Black-owned hedge funds is relatively small, there are several firms led by black portfolio managers and investment professionals. Examples of black-owned hedge funds include Vista Equity Partners, Ariel Investments, and John Rogers' Capital Management.
These firms have demonstrated strong performance and have been recognized for their commitment to diversity and inclusion in the financial industry. Despite facing challenges such as limited access to capital and networks, Black-owned hedge funds continue to emerge and make their mark in the industry.
Are There any Black Owned Investment Firms?
Of course, there are several Black owned investment firms. Some examples include Ariel Investments, Vista Equity Partners, and Brown Capital Management. These firms are owned and operated by Black individuals or groups, and they specialize in investment management and providing financial services to clients.
They often have a focus on investing in diverse and underrepresented companies, and may have a strong commitment to social responsibility and community development. Black owned investment firms play an important role in promoting diversity in the financial industry and creating opportunities for underrepresented groups.
Bay Street Capital Holdings
Bay Street Capital Holdings (BSCH) is one of the few Black-owned investment firms in the US. The Black-owned bank is a signatory for the United Nations Principles of Responsible Investing. As one of the few black-owned investment banks in the country, Bay Street invests with high conviction, through the lens of history, in organizations that will outperform.
The firm is one of the few Black-owned banks, Black-owned financial institutions, personal loans, credit unions, credit cards, financial services, financial literacy, financial institutions, African American and minority depository institution services. The team at Bay street is passionate about building income communities, Black communities, and BIPOC communities. The firm serves on the board of directors for various nonprofits and foundations across the US.
BSCH as an Asset Management Firm
Bay Street Capital is a Black-owned bank in the asset management category. After supporting the United States' largest retirement plan, Thrift Savings Plan, for 13 years, William Huston founded Bay Street. His expertise in the financial industry earned him recognition as one of Investopedia’s Top 100 Financial Advisors for 2021, with only two Black-owned firms out of nineteen receiving this honor in California.
Additionally, Ekenna Anya-Gafu CFP, AAMS was recognized in Scottsdale, Arizona as one of the Best Financial Advisors for his attentiveness, approachability, helpfulness, and thoroughness.
Bay Street was established with a mission to support and empower diverse and emerging fund managers and entrepreneurs. Their commitment to social responsibility and community development led them to be named a finalist in the Asset Manager for Corporate Social Responsibility (CSR) category among over 900 firms across the US in 2021.
Black-Owned Banks and Financial Institutions
Today, there are several Black-owned banks that offer similar financial services as other institutions like loans, online & mobile banking, etc. Here is a list of Black-owned banks and credit unions and their locations.
- Alamerica Bank which has its HQ in Birmingham, Ala. Check here.
- Broadway Federal Bank FSB which has locations in Los Angeles and Inglewood, Calif.
- Carver Federal Savings Bank which is located in three cities in N.Y. Check here.
- Carver State Bank which has two locations in Savannah, Ga.
- Citizens Trust Bank which is located in 15 cities across the U.S. Check here.
- Columbia Savings & Loan ASSN which is located in Milwaukee, Wyo. Check here.
- Commonwealth National Bank which has two locations in Mobile, Ala.
- Credit Union of Atlanta located at Atlanta, Georgia. Check here.
- First Independence Bank which is located in two cities in Mich. Check here.
- GN Bank which is located in Chicago, Ill. Check here.
- Harbor Bank of Maryland which is located in three cities in Md. Check here.
- Industrial Bank NA which has multiple locations in N.Y., Md., and N.J. Check here.
- Liberty Bank & Trust CO which is located in 10 cities across the U.S. Check here.
- Mechanics & Farmers Bank, located in five cities in Carolina.
- OneUnited Bank which is located in three cities across the U.S.
- Optus Bank which is located in Columbia, S.C. Check here.
- Tri-State Bank of Memphis which is located in Memphis, Tennessee.
- United Bank of Philadelphia which is located in Philadelphia, Pa. Check here.
- Unity National Bank which is located in three cities in Texas and Georgia. Check here.
- First Security Bank and Trust Company which have their HQ at Oklahoma.
Why you should consider banking Black
Back in 2001, there were about 48 Black-owned banks. However, this number has gone down over the years due to regulatory restrictions set in place that favor larger financial institutions and not so much smaller financial institutions.
One of the sectors that systemic inequality has affected is the banking industry. As of 2016, the average wealth for a White family was approximately $171,000 while that of a Black family was $ 17,600. The assumption that Black people are not good with their finances is a purely false claim that is rooted in societal issues.
Here are some reasons why you should bank Black or join a Black-led bank:
Engagement
Black-led banks often engage in community activities by re-investing their time and resources to support their goals and values. With the ongoing COVID-19 pandemic, it is very important for Black-led banks to continue supporting the communities around them.
Access
Black-owned and Black-led banks allow entrepreneurs to access capital to start, grow and maintain their businesses. By funding the dreams of these entrepreneurs, not only do the businessmen and women gain but so does the bank and the country's economy
Loan
Black-led banks have also been trying to solve some of the mainstream issues within the banking sector like the loan application process.
Mortgages
Black applications for loans and mortgages are usually rejected almost twice as much as White applications for the same services. Black-led banks are trying to bridge this gap and allow more Black people to access loans easily.
Credit Card
Also when it comes to the credit card space, the situation is not too different. Many middle-class families have struggled to pay their credit card debts. This had led to a lot of advocacy to help out the Black Community. Notably, credit companies like Visa have introduced cards with 0% interest within the first six months in order to provide some relief in the midst of the pandemic.
Financial Literacy
Another way in which Black-led banks are adding value is by offering financial literacy workshops for the members of its community. Financial literacy is a very key aspect of financial management as it covers how to acquire and maintain resources so that you’re able to invest and get maximum returns.
Banking Black is a great opportunity to give people who’d been written off a second chance. It’s an opportunity to create economic empowerment as well as make a positive impact on society.
Notable Initiatives
In July 2016 there was a rise in support for Black-owned businesses in response to the Black Lives Matter movement. One notable initiative was the Black Money Matters movement that was spearheaded by rapper Michael Render popularly known as Killer Mike. His call for action, asking Black people to bank Black, was televised by BET.
The effects of the campaign were short-lived but impactful as his efforts led to the opening of 8,000 new accounts at the Citizens Trust Bank in Atlanta which is Black-owned. It is reported that One United Bank received $3 million in deposits across the country while Carver Bank received $2.4 million in deposits, all thanks to the movement.
While such notable actions are very helpful, these are still temporary fixes and longer-term solutions are needed. Increasing the number of loans and capital available to members of the Black community would help keep Black-owned businesses running and stimulating the economy.
Dr. JeFreda R Brown stated that “Black-owned banks should be given a chance to grow and be a strong financial staple in the communities they serve. Also, Black-owned banks are a great option for anyone because they promote economic revitalization. Banking with Black-owned banks helps increase community development and economic development. This is why they need support from everyone.”
Are you considering banking Black?
Choosing to bank and invest your money in Black-led banks is a great decision as it helps keep the banks and credit unions afloat and running. Step by step, this helps to lessen the disparity gap that minority communities are currently facing.
Here are a few factors to consider when choosing a bank:
Identify Your Individual Needs
As you shop around for a Black-owned bank, start by identifying what your primary needs are. Is it good customer service, mobile and internet banking, or accessibility that you’re looking for? Make a list of the must-haves and deal-breakers and then begin your search. Ensure to go with a Black-led bank that is well-tailored for your needs.
Location
The physical location of a bank is important if most or a large majority of your bank-related processes need to be sorted out in a physical location. In this case, the proximity of a bank to your home, office, and general areas where you frequent is vital for ease of access. Also if you’re a person who frequently travels for work or leisure, be sure to consider banking with an entity that allows for transactions in multiple locations across the globe.
Digital Needs
While shopping for a Black-led bank, it is important to take into consideration their digital, mobile, and internet banking features if you’re a person who usually uses these mediums when it comes to daily transactions. Ensure you go for a bank that has these features enabled and one that also provides cybersecurity in this age of cyber crime.
Banking Black isn’t just about depositing and withdrawing money from a Black-owned or Black-led bank. It’s about taking a stand against inequality and discrimination of minority communities and promoting financial literacy and inclusion.
Bay Street Capital Holdings
Bay Street Capital Holdings is an independent financial services firm located in Palo Alto, CA, with a strategy that prioritizes managing total risk and volatility to increase assets and income.
The company was founded by William Huston, a former employee of the $650B Thrift Savings Plan, who was recognized as one of Investopedia's Top 100 Financial Advisors in 2021.
Bay Street supports diverse and emerging fund managers and entrepreneurs, and was selected as a finalist in the Asset Manager for Corporate Social Responsibility (CSR) category among over 900 companies in the US.
Sources
https://www.thefader.com/2016/08/12/one-united-black-bank-interview
https://aofund.org/resource/business-banking-10-tips-choosing-right-bank/
https://www.nerdwallet.com/article/banking/black-owned-banks-and-credit-unions
