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Black-owned banks can be traced back to the Reconstruction Era. African-Americans had been freed from slavery, and they needed to establish themselves financially. However, traditional banks often wouldn’t work with them. Black-owned banks opened up giving African-Americans a place to do their banking. They could open savings accounts, get mortgages, and more from these banks.
While black-owned banks aren’t as prominent as they once were, they still play an important role in the African-American community. Just look at the percentage of mortgage loans given to African Americans to get an idea of how important these banks are.
In 2011, 67 percent of mortgage loans provided by black-owned banks went to African-Americans. That same year, only one percent of mortgage loans made by community banks that were not run by minorities went to African-Americans.
These banks don’t just provide mortgage loans to the black community, they also help revitalize low-income areas. These banks give low-income consumers access to credit and other products they wouldn’t normally get.
Most importantly, they cater to a demographic that is woefully underserved. Approximately 53 percent of African-Americans are underbanked or unbanked. That means they use services such as check cashers. That is close to twice the amount of underbanked and unbanked Americans when looking at all demographics.
Products and Services Offered by Black-Owned Banks
Black-owned banks offer many of the products and services consumers get with other banks. These banks typically have checking and savings accounts. Consumers can also apply for credit cards through black-owned banks.
Since these banks often serve lower-income communities, it is not uncommon for consumers to have credit issues. That is why some of the banks offer secured credit cards. Consumers are more likely to be approved for these cards even if they have poor credit. The banks report the credit activity to the credit bureaus, allowing consumers to rebuild their credit with the help of the bank.
Many black-owned banks also offer mortgage and automobile loans as well as personal and home equity lines of credit. Some even offer insurance products as well as accounts for businesses.
Black-owned banks are as diverse as traditional banks when it comes to their offerings. That is why consumers should do their research before choosing which black-owned bank to use. That way they’re certain to choose a bank that offers what they want and need.
The Top Three Largest Black-Owned Banks
There are 23 black-owned banks in the country, and many have multiple branches. This number has gone down from 44 in 1986, showing a serious decline. Consumers need to use these banks to keep them in business.
Those who want to support black-owned banks need to pick an institution. Three black-owned banks stand out as the best in the country. They are the largest of the black-owned banks, allowing them to provide the resources and security people want.
OneUnited Bank is the largest of the black-owned banks in the United States. The bank is headquartered in Boston and has six branches. It brings in a healthy amount of money, with $655 million in assets and $376 million in deposits.
As a government-designated CDFI, OneUnited bank services low- to moderate-income communities. With financial literacy workshops and events, it hopes to help communities build solid credit profiles. Customers can use these resources to make smart credit decisions.
The bank offers checking and savings accounts, along with a secured credit card for rebuilding credit. It has three checking products, one of which is a second-chance checking account. Those who have Chex Systems records can open a second-chance checking account with the bank.
This bank is an excellent option for people who’ve had some credit issues. They can rebuild their credit and have access to a checking account and credit card.
Liberty Bank and Trust Company
Liberty Bank and Trust Company has 21 branches spread over seven states. It is headquartered in New Orleans and has assets valued at over $550 million and deposits valued at $549 million.
The bank has its own foundation called Liberty Foundation. The foundation has increased the availability of affordable housing and made it easier for people to access higher education.
Liberty Bank has products and services for individuals and businesses. Those who need personal accounts choose from checking and savings accounts as well as credit and debit cards. The bank also offers mortgage loans, auto loans, home equity loans, and lines of credit.
Those who need business accounts can choose from checking and savings accounts as well as credit cards and debit cards. Lending options include business lines of credit and commercial real estate loans.
It’s worth noting this bank has one of the most robust savings account options out there. Options include CDs, capital asset funds, and IRAs. Consumers can also choose a standard savings account. These options are good for those who want to make their money work for them.
Citizens Trust Bank
Citizens Trust Bank is close to 100 years old, and it’s still going strong. It has $396 million in assets, $340 million in deposits, and ten branches. It’s headquartered in Atlanta, and it offers services for individuals and businesses.
Personal accounts include savings, checking, credit cards, personal loans, mortgage loans, investment accounts, and insurance. Business products include checking accounts, savings accounts, loans, credit cards, and investments.
Citizens Trust Bank also offers down payment assistance for homebuyers who need it. In addition, consumers can benefit from the financial counseling service it provides.
Is a Black-Owned Bank the Right Choice?
Choosing a bank is a personal decision. However, those interested in helping their communities can do so by going with black-owned banks. These banks are socially conscious and have tried helping revitalize communities in the past.
In addition, they generally offer the same products and protections consumers receive from traditional banks. Some even offer some extra benefits such as help for consumers who have bad credit.