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Should You Choose a Black-Owned Bank?

Ash Brouillard hopes to expand both her perspectives and yours.

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When you make your banking decision, you probably think about financial matters first: which banks offer the highest returns, favorable policies, and reasonable lending rates? What if I told you that banks play a major role in deciding who has access to finances? Seems like a logical idea, yet probably something you have never thought of. Here’s a rundown of what has been historically occurring in the banking industry and some black-owned banks to look into as an alternative.

Redlining and Reverse Redlining

Redlining is the refusal of a loan to someone who lives in an area deemed a poor financial risk. Financial risks are decided by the institutions and historically target minority communities. The practice has been made illegal for over 50 years by the Fair Housing Act of 1968. However, the practice still occurs today, despite legislation banning it. Reverse Redlining is the predatory practice of unjustly charging minorities higher rates and fees than white borrowers.

Here Are Just Some of the Companies Who Have Allegedly Participated in Redlining

  • Wells Fargo: Wells Fargo has been involved in multiple lawsuits for their redlining practices. In 2004 through 2009 Wells Fargo charged 30,000 African-American and Latino borrowers higher fees and rates than white borrowers according to the United States Department of Justice. They were forced to pay more than $175 million in relief. It was also involved in reverse redlining in Philadelphia, where minorities were made to pay much higher fees and rates. In Los Angeles as well it has practiced discriminatory lending policies since the 1990s.
  • Citibank: Citibank has a trend of participating in redline practices. In 1994 Buycks-Roberson v. Citibank Fed. Sav. Bank, plaintiffs filed a lawsuit against Citibank rejecting the loans of minority applicants. They also faced lawsuits in Miami and were fined by the Office of the Comptroller of the Currency in 2019 for redlining practices.
  • Bank of America: Bank of America has been in trouble with the U.S. Department of Housing and Urban Development for discriminating against Latino borrowers. It also has been involved in a lawsuit in Miami and has settled a complaint with the Justice Department concerning unfair lending practices.
  • JP Morgan Chase: JP Morgan Chase was involved in a U.S. Justice Department Lawsuit in 2017 for reverse redlining against Latino borrowers. It allowed rates initially set based on credit to be changed by brokers. It was also involved in a lawsuit in Miami for predatory loans against minorities.
  • Liberty Bank: In 2019 Liberty Bank settled a $15M lawsuit against unfair lending claims. It denied Latinos and African Americans. The bank allegedly denied their claims or did not provide adequate lending services.

If this doesn’t sit right with you, there are alternatives to the major banks. Consider switching to a black-owned or minority-owned bank. They are less likely to practice discrimination and are more likely to invest in minority communities.

Here Are Some Black-Owned banks to Look Into:

  1. Alamerica Bank, Birmingham, Alambama
  2. Broadway Federal Bank (Minority Owned), Inglewood & Los Angeles, California
  3. FAMU Federal Credit Union, Tallahassee, Florida
  4. Carver State Bank, Savannah Georgia (multiple locations)
  5. Citizens Trust Bank, Atlanta, Georgia
  6. Credit Union of Atlanta, Atlanta, Georgia
  7. Omega PSI PHI Credit Union, Lawernceville, Georgia
  8. 1st Choice Credit Union, Atlanta, Georgia
  9. GN Bank, Chicago, Illinois
  10. South Side Community FCU, Chicago, Illinois
  11. Financial Health FCU, Indianapolis, Indiana
  12. St. Louis Community Credit Union, St. Louis, Missouri
  13. Columbia Savings and Loan, Milwaukee, Wisconsin
  14. First Independence Bank, Detroit, Michigan
  15. Toledo Urban Credit Union, Toledo, Ohio
  16. Faith Community United CU, Cleveland, Ohio
  17. United Bank of Philadelphia, Philadelphia, Pennsylvania
  18. The Harbor Bank, Baltimore, Maryland
  19. Industrial Bank, Washington, D.C. (multiple locations)
  20. Howard University Credit Union, Washington, D.C.
  21. Liberty Savings CU, Jersey City, New Jersey
  22. Brooklyn Cooperative, Brooklyn, New York (multiple locations)
  23. Lower East Side People’s Federal Credit Union, Staten Island, New York
  24. Carver Federal Savings Bank, Queens, New York
  25. Urban Upbound, New York, New York
  26. Greater Kingston Credit Union, Kingston, North Carolina
  27. Mechanics and Farmers Bank, Raleigh, North Carolina (multiple locations)
  28. First Legacy Community Credit Union, Charlotte, North Carolina
  29. CO Federal Credit Union, Charleston, South Carolina
  30. Optus Bank, Columbia, South Carolina
  31. Brookland Federal Credit Union, West Columbia, South Carolina
  32. Hope Credit Union, Biloxi, Mississippi
  33. Tri-State Bank, Memphis, Tennessee
  34. Southern Teachers and Parents FCU, Baton Rouge, Louisiana
  35. Unity National Bank, Houston, Texas
  36. Oak Cliff Christian Credit Union, Dallas, Texas
  37. Faith Cooperative Credit Union, Dallas, Texas
  38. Mount Olive Baptist Church CU, Dallas, Texas

If you do not see your state on the list, OneUnited Bank is a black-owned bank available in all 50 states.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2020 Ash Brouillard

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