Did you know, as of the latest information available, that only 23 out of 5,400 insured financial institutions in the United States are owned and operated by Black people? However, black owned banks in America are punching above their weight when it comes to supporting their communities.
Despite being less in numbers, the black owned banks in America reinvest a significantly higher amount of their deposits back into Black communities. This practice plays a crucial role in serving their community and addressing their financial needs.
In this blog, we will explore the history of black owned banks in America and highlight the top 5 black owned banks that are making a significant impact in 2024.
But before we move on, it’s crucial to understand the history of black owned banks in America.
As we all know, nothing happens without any reason. So now, you might be wondering what would be the reason behind the Black Owned Banks in the USA. And what purpose do these banks serve? What is their main motto behind all of this?
The pages of the late 19th century recorded the hype of ‘Black Owned Banks.’ Rev. founded the first Black-owned bank, True Reformers Bank. William Washington Browne on March 2, 1888. However, some debate whether the Freedman’s Savings Bank, established in 1865 by the U.S. Congress and President Abraham Lincoln, was technically the first.
The United States Congress and President Abraham Lincoln authorized the Freedman’s Savings Bank, which is often considered the first-ever black-owned bank, although it technically isn’t the first one.
But what was it like before? What hardships did the black citizens of the USA go through? How they were treated when they tried to apply to avail of their banking rights?
Redlining was a common practice where banks refused loans or offered unfavorable terms based on race and neighborhood. This institutionalized segregation cut off access to mortgages and financial services for Black Americans.
Even if allowed to open accounts, Black customers often faced economic exploitation. They were charged higher interest rates on loans and received lower interest rates on deposits compared to white customers. These practices highlighted the systemic financial discrimination that Black citizens had to endure.
Throughout the 20th century, additional Black-owned banks emerged, each contributing to the economic development of their communities. These banks provided not only financial services but also a sense of achievement and ownership. Notwithstanding many obstacles, including economic downturns and discriminatory methods they kept going and adapted to shifting economic landscapes.
Now it’s time to look at the Top 5 Black Owned Banks in America based on their assets (USD in Thousands).
1. Brooklyn Cooperative Federal Credit Union
- Total Assets: 51,518,683
- Founding year: 2001
- Private or Public: Private
- Headquarters: Brooklyn
- Total Branches: 2
- CEO/Chairman/President: Jose Rolando Guzmán (Chairman)
Brooklyn Cooperative Federal Credit Union is a notable black owned banks In America. The credit union has a rich history marked by resilience and dedication. In its early years, the credit union faced significant challenges, including operating in the aftermath of the 9/11 attacks in 2001. During the 2008 financial crisis, while many institutions struggled, Brooklyn Cooperative continued to support its members, building trust and loyalty within the community. Despite these hardships, it has grown substantially, serving over 7,150 members and maintaining a robust net worth ratio of 10.83%.
One of the most impactful services offered by Brooklyn Cooperative is its affordable housing loans for low-income residents. This service has stabilized the community by providing access to home ownership. By offering lower interest rates and flexible repayment terms, the credit union has improved the quality of life for many families, fostering community development and economic stability.
Over the past 5 to 10 years, this black owned banks In America has seen a steady growth rate of 8-10% annually. Future plans include expanding digital banking services and introducing financial literacy programs and small business support services. The credit union expects a growth rate of 10-12% over the next decade, driven by these initiatives and a continued focus on community-oriented banking solutions.
2. First Choice Credit Union
- Total Assets: 38,649,857
- Founding year: 1929
- Private or Public: Private
- Headquarters: Florida
- Total Branches: 2
- CEO/Chairman/President: NA
First Choice Credit Union is a leading Black-owned bank in America. It has empowered communities since its founding during the economic hardship of the Great Depression when the need for financial stability within Black communities was paramount. First Choice rose to the challenge, of becoming a trusted financial partner.
Going beyond traditional banking, First Choice prioritizes financial wellness. Their signature program offers complimentary financial coaching through a partnership with Balance. This can be a valuable service for those seeking personalized guidance on managing their finances. This program empowers members to take control of their finances, building a secure future for themselves and their families.
Over the years, First Choice Credit Union has experienced steady growth. Their dedication to financial well-being continues to attract new members, solidifying their position as a pillar of trust. Looking ahead, First Choice plans to leverage innovative digital solutions to expand its reach, all while staying true to its core mission: empowering communities through financial literacy and inclusion.
3. Brookland Federal Credit Union
- Total Assets: 4,891,581
- Founding year: 1999
- Private or Public: Private
- Headquarters: West Columbia, SC
- Total Branches: 1
- CEO/Chairman/President: Ronald A. Cooley (President/CEO)
Brookland Federal Credit Union stands as a beacon of resilience and service among black owned banks in America. Established during a time of economic challenge, Brookland Federal Credit Union emerged as a community pillar. The bank faced initial hardships, including limited investor confidence, but it has since grown to a robust institution with a significant investor base. During its inception, the bank played a crucial role in supporting the local economy, which faced considerable strain during global economic downturns.
What sets Brookland Federal Credit Union apart is its commitment to providing unique and impactful services. They commit to providing impactful services, including financial literacy programs. These initiatives aim to empower individuals in the community and promote financial independence. If you want to learn more, check Brookland FCU’s website or contact them to see if their programs meet your specific needs.
In recent years, Brookland Federal Credit Union has demonstrated impressive growth. Over the past decade, it has achieved a steady year-on-year growth. Looking ahead, the bank aims to expand its digital services, ensuring greater accessibility and convenience for its members. Brookland Federal Credit Union strategically focuses on innovation and community engagement, and it expects to grow and increase its market presence over the next decade.
4. City First Bank
- Total Assets: 1,370,559
- Founding year: 1998
- Private or Public: Private
- Headquarters: Washington, D.C
- Total Branches: 4
- CEO/Chairman/President: Brian E. Argrett (President & CEO)
City First Bank stands out among black owned banks In America for its rich history and impactful services. Established during a period of significant social change, the bank overcame numerous obstacles, including economic downturns and competitive pressures. Despite these challenges, City First Bank flourished, demonstrating resilience and commitment to its community.
One of the unique services that sets City First Bank apart is its dedication to providing financing for affordable housing development. The bank partners with developers and investors to create affordable housing units, significantly impacting the community. This focus on affordable housing development has not only benefited the local economy but has also addressed critical housing shortages, improving the quality of life for many families.
City First Bank has shown impressive growth over the past decade. Looking ahead, the bank has ambitious plans to expand its digital banking services, enhance financial literacy programs, and increase community investments. These initiatives are expected to further boost their growth rate and strengthen their position in the market. City First Bank aims to maintain its reputation for trust and reliability, continuing to serve as a pillar of support for its community.
5. Carver Federal Savings Bank
- Total Assets: 758,848
- Founding year: 1948
- Private or Public: Public
- Headquarters: New York
- Total Branches: 7
- CEO/Chairman/President: Michael T. Pugh ( President & CEO)
Carver Federal Savings Bank, one of the leading black owned banks in America, has a rich history of community-focused service. From its inception, Carver faced significant challenges, including economic uncertainties, but its commitment to serving the African American community helped it thrive. Initially, the bank had a handful of investors; today, it boasts a substantial and diverse investor base, symbolizing resilience and empowerment.
Carver’s unique service lies in its unwavering commitment to community development. The bank reinvests a significant portion of its deposits into underserved neighborhoods, supporting local businesses and initiatives. This dedication has revitalized neighborhoods and strengthened the economic foundation for generations of Black families. Carver also offers tailored financial products, with a focus on affordable housing loans, providing opportunities for homeownership that might otherwise be inaccessible.
In recent years, Carver Federal Savings Bank has shown robust deposit growth, achieving a 5.8% compound annual growth rate over the past four years. Looking ahead, Carver plans to expand its digital banking services to enhance accessibility and convenience for its customers. The bank is also committed to increasing financial literacy through educational programs. With these strategic plans, Carver expects accelerated growth, further solidifying its credibility and trust in the market.
Conclusion
In conclusion, black owned banks in America represent resilience and growth, crucial for economic empowerment in marginalized communities. By supporting these institutions, individuals directly contribute to fostering financial inclusion and equity. The top 5 black owned banks exemplify a commitment to community reinvestment and customer-focused services, driving both social change and economic advancement. As Martin Luther King Jr. said, “The time is always right to do what is right.” Choosing black owned banks isn’t just about financial decisions; it’s a moral imperative to ensure a more equitable future for all Americans.
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