Roper is planning her wedding and preparing to put all
the arrangements into place: choosing the venue,
ordering the cake, picking a dress, selecting music and
opening a checking account at an African-American owned
needed to be done," she said as she recently opened
the account at Seaway Bank and Trust Co. with her fiance,
Troy Mackey. They will pay all the wedding bills out of
the new account, and Roper thinks selecting a
black-owned bank is crucial for starting the marriage
are committing to the community, and we are committing
to each other," she said as she and Mackey signed
the papers at the 51-year-old bank in Chicago’s
an attorney supervisor for the Cook County public
defender’s office, was inspired by a campaign at
Seaway that’s a local version of a national effort
known as Bank Black. The slogan is supposed to induce
people to save money at banks owned by African-Americans
so the institutions have the money on hand to improve
surrounding black communities with loans crucial to
individuals and small-business owners.
opening new accounts at black banks will ultimately turn
around neighborhoods ravaged by a lack of investment and
jobs, however, is being questioned by experts who have
watched banking for decades. This is not the first time
a movement has emphasized supporting black banks, and a
previous one during the civil rights era fell flat, said
William Bradford, a University of Washington finance
the current effort motivates a lot of affluent people to
open accounts in black banks, this round of black
empowerment might work better than the last to help
black banks thrive, he said. "But typically there
the country was more segregated, black-owned banks were
key to lending and banking services in predominantly
black areas, but since then there has been increased
competition from larger banks. With deeper pockets and
advanced technology such as ATMs and 24-hour call
centers, the giants have absorbed banking customers
while black banks have struggled to handle extra costs
and stay profitable, Bradford said.
latest campaign to move money into black banks took hold
nationally in July when rapper Killer Mike, in an
Atlanta radio interview, responded to a question about
what to do about the shootings of two black individuals
by police in St. Paul, Minn., and Baton Rouge, La.
Killer Mike’s answer: Fight back economically. Put
money into black-owned banks so the banks will employ
people from nearby and give loans to the individuals and
businesses that will allow them to prosper.
under hashtags #bankblack and #moveyourmoney on Twitter,
other celebrities joined in, including singer Solange
Knowles, sister of pop star Beyonce. On Knowles’
Instagram account, she announced it was "time to
literally put my money where my mouth is."
August, Seaway, one of three Illinois black banks, which
are all headquartered in Chicago, announced its own Bank
Black campaign as it used social media and emails to
community leaders and customers to join the movement.
Seaway asked each person to bring 20 people to the bank
to open new accounts. The participants were welcomed to
a street fair-type setting with picnic tables and food,
a live band, and bank tellers ready to process paperwork
in the parking lot next to the bank.
bringing 20 new customers turned out to be a tall order
for most participants, people such as Roper made the
trip to Chatham. Meanwhile, community leaders such as
Leon Finney, president of Woodlawn Community Development
Corp., urged parents and grandparents to bring children
to open their first accounts and provided children $10
through a church donation to get started.
starting with $10, but hope to get a summer job and save
$1,000 by 2017," said 15-year-old Kyla Reynolds,
who opened accounts with about 20 other children ushered
to the bank by Aleta Clark, a community activist from
the Englewood neighborhood.
have to teach our kids to save," Finney said. The
nation’s 43 million African-Americans are expected to
spend $1.3 trillion in 2017, but they aren’t
harnessing their money adequately to build their
personal wealth or the black community’s wealth, he
high time for black dollars to stay in the
community," Killer Mike said in an interview,
noting that most of the money black people spend goes
toward white-owned stores and other businesses.
a certain point you have to do what successful other
people do: Take control of your community; fight
economically. And black banks have been the backbone of
black commerce. If a black business doesn’t get a loan
it can’t be successful, it can’t hire other black
people, and those people can’t buy houses and land and
send their children to better schools."
STORY CAN END HERE)
Bank Black started gaining attention in July, Seaway has
opened 1,306 new accounts and has received about $8
million in new deposits, said Daryl Newell, Seaway’s
chief retail banking officer. Typically, the bank brings
in about 10 to 20 new accounts daily, he said.
the country, millions of new dollars are flowing into
black banks, said Michael Grant, president of National
Bankers Association, a group that represents minority
institutions. He has no national count but noted that in
Atlanta, where Killer Mike lives and has been outspoken,
Citizens Trust Bank reportedly attracted 5,000 new
accounts in a single week.
build on the momentum in Chicago, Trinity United Church
of Christ is planning Move Your Money Sunday for Oct. 2,
where four black institutions will be featured as
outlets for new accounts: Illinois Service Federal
Savings & Loan Association, South Side Community
Federal Credit Union, Trinity United Church of Christ
Federal Credit Union and Seaway.
word of mouth continues on Bank Black, people continue
coming" to Seaway’s Chatham location and eight
others in the Chicago area and Milwaukee, Newell said.
"They say they want to support the movement."
campaign is important to the bank, which has been under
pressure from regulators since the 2008 financial crisis
to raise capital. When deposits decline, the ability of
banks to lend money also drops.
to Federal Deposit Insurance Corp. records, Seaway lost
$6.8 million in the first half of the year, compared
with a $1.2 million loss in the same period a year ago.
Nearly 17 percent of Seaway’s loans were seriously
delinquent, much higher than the 1 percent at Illinois
banks overall. Loans on the books declined from $231
million in June 2015 to $217 million this June, and
deposits have dipped slightly to $303 million.
Chairman Veranda Dickens said the need to bring in
capital is separate from the Bank Black campaign, which
aims to bring in deposits and build a sense in the
community that saving is essential. The bank will work
with investment bankers to attract equity investments,
noted the bank was hit hard in the housing crash, when
many of the homes in nearby neighborhoods plunged in
value and left people struggling to pay mortgages.
median household income in Chatham was $33,850 in 2014,
and the unemployment rate was 22.6 percent, according to
census data tracked by the Great Cities Institute at the
University of Illinois at Chicago. More than half of the
people in Chatham have stretched to pay for housing —
among renters, 56.5 percent were devoting more than 30
percent of their income to rent in 2014, and among
homeowners, 53.2 percent were paying more than 30
percent toward their mortgages. People spending more
than 30 percent on housing struggle to make ends meet.
and the other two Illinois black banks have been under
pressure from regulators.
this year, a family from Ghana invested $9 million in
Illinois Service, a Bronzeville neighborhood lender that
was founded in 1934 and had been close to failing before
it was rescued. Troubled banks unable to turn themselves
around risk seizure by the government, which typically
then hands the reins to another bank.
Partnership Bank, whose financial backers include a who’s
who of Wall Street but which serves a largely black
area, is in trouble with regulators and is trying to
raise $15 million in capital.
FDIC considers an institution a minority bank if at
least 51 percent of its stock is owned by minorities, or
if most of its board of directors is minority and the
community it serves is mostly minority.
than 160 minority banks were in business as of the first
quarter, according to the FDIC. That includes 24 black
banks. In 2008, there were 215 minority banks, including
41 black banks. The total number of insured institutions
currently stands at more than 6,000.
the University of Washington professor, said
"capturing deposits and lending in the community is
not going to work."
he said, must earn a profit, but the model doesn’t
work well at small banks in low-income communities.
Lower-income people, he notes, can’t afford to save
much, and small accounts require accounting and services
that are expensive for banks to operate. Meanwhile, he
said, "You are going to be less able to generate
good lending results" when making risky loans to
small struggling businesses.
banks should not be the leaders in getting wealth into
black communities," he said. "It should be
large banks with affluent customers in addition to
less-affluent customers." That blend provides a
more solid base of deposits to use in granting riskier
loans. He said that’s the idea behind the Community
Reinvestment Act, which Congress enacted in 1977 to
reduce lending discrimination. Banks were required to
show that they were meeting needs for loans in black
black leaders emphasize that a greater number of blacks
are affluent, and their support for black banks can
help. They point to a Nielsen report from 2015 that
explores the spending habits of high-income blacks.
Lyneir Richardson, CEO of Chicago Trend, an organization
aimed at uplifting neighborhoods, said with the current
interest among people to make an impact with their
money, channeling some into a black bank is simple.
"It’s something you can do even if you don’t
live in that community," he said.