5 Exceptional Banks and Credit Unions That Serve Communities of Color
In America, racial inequality and economic inequity have always gone hand in hand. For generations of African-Americans and other minority groups, the banking system was an immovable obstacle on the path to equality and inclusion. From redlining to predatory payday loans, bankers and lenders long used the levers of financial power to dictate where or if people of color could buy homes, open businesses, or even save money in a bank account.
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Some banks and bankers, however, used the power that is inherent to big piles of cash to move the needle in the other direction. They used their cash clout to shrink the racial wealth gap and extend financial empowerment to banking deserts in minority communities.
The last few years have witnessed a revolution as organizations like BankBlackUSA have emerged as auxiliaries to the wider racial justice movement. Their goal is to harness the Black community’s trillion-dollar-plus annual buying power to force change without violence. Despite those efforts, the number of Black-owned banks and credit unions has declined in the 21st century, even as the number of other minority-owned banks has grown. That’s a worrisome trend, considering that Black-owned institutions are far more likely to extend loans and credit to members of minority groups than traditional lenders.
Even so, America is filled with banks and credit unions that serve the communities of color that need them the most. The following are just a few of the oldest, boldest, and most inspiring of them all.
1. OneUnited Bank
OneUnited is the largest Black-owned bank in America and holds the distinction of being the country’s first Black-owned online bank. It’s also an old and important activist organization with a 50-year legacy of promoting financial empowerment as a driver for social and economic change. Its founders created OneUnited by getting Black-owned banks across the country to pool their resources and work together.
A designated Community Development Financial Institution (CDFI) that serves low- to moderate-income communities, OneUnited is an advocate of the #BlackMoneyMatters movement. In 2016, it launched the #BankBlack Challenge, which encouraged divestment from traditional institutions in favor of Black-owned banks and credit unions. When rapper Killer Mike and other celebrities endorsed the challenge, it went viral, and other African-American banking professionals were inspired to launch BankBlackUSA.
Today, OneUnited remains the most powerful force in the #BuyBlack and #BankBlack movements, which strive to leverage Black America’s collective $1.2 trillion annual buying power for the cause of social justice. It has offices in Miami, Los Angeles, and Boston.
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2. First Independence Bank
Like OneUnited, First Independence Bank has a 50-year history of using financial power as a mechanism for promoting civil rights and racial justice. Founded in May 1970, the Detroit institution remains one of only two banks headquartered in Motor City and the only Black-owned bank headquartered in the entire state of Michigan. Although it has grown into the No. 8 largest African-American-controlled commercial bank in the United States, its mission remains to provide excellent, competitive, and anti-discriminatory financial services “with an affinity for under-served and minority communities.”
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3. Brooklyn Cooperative Federal Credit Union
The credit union known locally as the Brooklyn Coop has spent 20 years serving one of the most historic and significant but underserved African-American communities in New York City and the entire United States — Bushwick and Bedford-Stuyvesant in Central Brooklyn. More than 95 percent of the people who live there are members of minority groups, and like so many other minority-majority neighborhoods, financial services tend to be scant, inadequate, and sometimes predatory.
The Brooklyn Coop’s mission is to offer affordable bank accounts that are accessible to all while extending loans and lines of credit to job-providing small businesses in the neighborhood. It has grown from controlling less than $300,000 during its first year in 2001 to nearly $25 million in assets today–not to mention more than 7,000 member/owners.
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4. United Bank of Philadelphia
The United Bank of Philadelphia is controlled and managed by African-American financial professionals and community leaders who populate its entire board of directors and management team. A driving force in minority neighborhoods in and around Philadelphia, United Bank provides a full menu of financial services “with a special sensitivity to Blacks, Hispanics, Asians, and women,” according to the company’s website. It specializes in fostering job growth in underserved communities by providing financing to small businesses that create good jobs in low-income communities. It also issues credit-building loans to individuals.
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5. BlueHub Capital
Formerly known as Boston Community Capital, BlueHub Capital’s name might have changed, but its mission has been the same since it was founded in the mid-1980s. Its early work in Boston’s low-income neighborhoods expanded to include all of Massachusetts, and finally, the country as a whole.
BlueHub was founded to address the negative results of redlining and other racist lending practices that resulted in generations of low-income members of minority groups being warehoused in underserved, over-policed, and blighted communities. During its 35-year run, the company has invested $2 billion and leveraged $10 billion more for use in its target communities, which are made up disproportionately of women and people of color.
Its work focuses on affordable housing and low-income homeownership–BlueHub extends new mortgages to homeowners in default or even in foreclosure–as well as clean energy, child care, commercial real estate renovation in distressed neighborhoods, and environmental health.
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Last updated: June 16, 2021
This article originally appeared on GOBankingRates.com: 5 Exceptional Banks and Credit Unions That Serve Communities of Color
