In 2001, there were 48 black-owned banks in existence in the U.S. Today, there are only 25 left, according to the Federal Deposit Insurance Corp. Although the recession and the mortgage crises hit many banks hard, black-owned banks have been struggling for years. Why?
Reason for the decline
Black-owned banks are smaller and have only a fraction of the assets controlled by much larger banks. In addition, their targeted customers are African Americans, and the jobless rates among blacks is still above ten percent, which means less business for black-owned banks. However, many feel there are other issues that had a greater impact on the demise of many black-owned banks, such as:
- Not updating services - many failed to keep their banking services up-to-date by offering automated services and online banking.
- No branches in the suburbs - many did not expand their services into the suburbs where banking would be more convenient for customers.
- Lack of federal bailout funds - many did not qualify or receive bailout funds from the federal government as most went to larger banks.
The future for black-owned banks
Michael A. Grant, president of the National Bankers Association, believes the future of black-owned businesses depends on the competitiveness of the services they offer, and the support of African American customers. He stated recently, "The African American community itself is going to have to do more to support its businesses, which includes the banks." "These are the banks that were there for us before integration. We should be there for them now."
Read more by visiting www.washingtonpost.com/blogs/wonkblog/wp/2015/02/13/the-countrys-last-black-owned-banks-are-in-a-fight-for-their-survival/