Top 5 Black Owned Banks In America
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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
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%.
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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
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
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.