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jerryking : community_banks   2

As Black-Owned Banks Withdraw, Community Sounds Alarm - WSJ
By Sharon Nunn
Aug. 6, 2017

The number of black-owned banks operating in the U.S. has been dropping steadily for the past 15 years and fell to 23 this year, the lowest level in recent history, according to the Federal Deposit Insurance Corp. That has left many African-American communities short of access to capital and traditional financial services, according to some banking experts....The 2008 recession hit the black banking sector especially hard, and if the current rate of closures of about two a year, as well as the industry-wide reluctance or inability to start banks, continues, black-owned banks could disappear entirely within the next eight to 12 years. The trend is worrisome to some analysts who argue fewer banks serving low-income, minority groups could expand “financial deserts”—communities with few or no banking institutions—and increase the likelihood that black and Hispanic communities could become susceptible to redlining, a discriminatory practice that excludes poorer minority areas from financial services....... [black-owned community banks were] the first bank some African-Americans had access to, making it a symbol of black enterprise and economic development, .......A survey of entrepreneurs by the U.S. Census Bureau in 2014 found that 47% of black business owners had gotten got the full amount of funding requested from banks, credit unions or other financial institutions, compared with 76% of whites.

That survey also showed fear of rejection was the top reason cited by black business owners who chose not to seek needed capital at all.
black-owned  banks  African-Americans  trends  decline  FDIC  financial_services  redlining  low-income  community_banks 
august 2017 by jerryking
The Rise and Fall of Black Wall Street
AUG 31, 2016 | The Atlantic | ALEXIA FERNÁNDEZ CAMPBELL.

Richmond was once the epicenter of black finance. What happened there explains the decline of black-owned banks across the country.

On April, 3rd, 1968, Martin Luther King Jr. gave his famous “I’ve Been to the Mountaintop” speech in Memphis. In it, he urged African Americans to put their money in black-owned banks. It wasn’t his most famous line, but the message was clear: “We’ve got to strengthen black institutions. I call upon you to take your money out of the banks downtown and deposit your money in the Tri-State Bank. We want a ‘bank-in’ movement in Memphis … We begin the process of building a greater economic base.”

The next day, King was assassinated, and his hope of harnessing black wealth remains unfulfilled. Before integration, African Americans in cities like Richmond, Chicago, and Atlanta relied on black community banks, which were largely responsible for providing loans and boosting black businesses, churches, and neighborhoods. After desegregation, black wealth started to hemorrhage from these communities: White-owned banks were forced to open their doors to African Americans and the money that once flowed into black banks and back out to black communities ended up on Wall Street and other banks farther away.
MLK  African-Americans  banks  banking  community_banks  institutions  history  Richmond  desegregation  integration  black-owned  self-sufficiency  self-reliance  institution-building  generational_wealth  economic_clout  capital_formation  epicenters  1968 
september 2016 by jerryking

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