As president of the National Bankers Association, whose members include many of the Black-owned banks that received and are still receiving an unprecedented level of support from all over America, I would like to extend heartfelt gratitude by simply saying: Thank you!
While efforts to get the Black community to utilize Black-owned banks is not new (Black banks have served the community since Reconstruction), what has been happening over the last two months is nothing less than phenomenal. The outpouring of support, triggered by the clarion call of rapper Killer Mike and answered by such superstars as Usher, TI, Solange and others, caught the banks by surprise – a very pleasant surprise.
Black people moving millions of dollars into Black-owned banks within such a short period of time might ultimately prove to be a game-changer! The catalyst for this mobilization of people and purses was born of frustration but the timing of this effort at self-empowerment could not have been more perfect.
After decades of celebrating the colossal achievements of the Civil Rights Movement, the thought leaders in Black communities across America are beginning to reach a consensus: Black America will never be able to enjoy the full privileges of first class citizenship in this country until it had secured the ultimate badge of liberty in America: financial freedom!
So many of the social ills that continue to plague large swaths of America’s Black communities can be summoned up in one phrase: financial dependence. High unemployment rates, underperforming businesses, crime, inadequate education and job training opportunities, low aim and an all-pervasive nihilism – especially among many Black youths – is defining far too many Black neighborhoods in our country.
Then along came this bank black movement. The idea of using one’s dollars to improve the overall condition of the community has been resurrected. And, to be sure, opening accounts in Black banks is a great first step. But what should follow?
Next, the Black bankers have a responsibility to teach banking 101 to the masses. You see, placing millions of dollars in the bank as deposits creates the need to support those accounts with investment capital. It takes both core deposits as well as capital in order for the bank to increase lending which is where real economic development takes place. When banks’ capital ratios meet regulatory requirements, they have more capacity to provide home equity loans, small business loans, mortgage lending, personal lines of credit and so forth.
The bank is also the community institution that can leverage a million dollar investment eight or nine times. The bank’s increased lending capacity is how we begin growing the collective wealth of the community. For example, the more home equity loans are used to create new businesses or to expand existing ones, the more jobs (and job training) these businesses can provide. It has been estimated that if the Black community would spend one-tenth of its disposable income with Black businesses, one million new jobs could be created. So much of our economic destiny is in our own hands!
Since statistics show that a qualified Black borrower has a higher probability of getting his or her loan approved at a Black bank, doing business with these banks – as a first choice – is a no brainer. The more we circulate our dollars within our own community, the more opportunities we create and the more wealth we can accumulate that can be transferred to future generations.
Contrary to the anticipated push back of the naysayers, the “bank Black” movement is not a boycott of other banks; it is simply an intelligent strategy at diversifying one’s dollars and investing in oneself.
The black banks are genuinely grateful for the trust that you, the consumers, have placed in them. Now, in order to sustain these new banking relationships, bankers and consumers must begin forging a new bond, born of mutual respect and a genuine desire to build what Dr. Martin Luther King, Jr. would call “The beloved community.”
Great days ahead!
Michael A. Grant, J.D.