Banking on Our Own

Investing in black-owned financial institutions is investing in ourselves

Zachary Raynell Rinkins 

Zachary Raynell Rinkins

Illinois Attorney General Lisa Madigan recently filed a lawsuit alleging that one of the nation’s top mortgage lenders illegally discriminated against minority borrowers. This suit only solidifies a reality mainly minorities face when pursuing the American dream.

It’s expensive to be black in America. Recent studies and lawsuits prove we are overcharged for virtually everything. We are charged more for insurance, loans and mortgages than most of our racial counterparts with similar income, employment and credit backgrounds. Paying more money for vital services robs us of our quality of life and our future.

Why does Wall Street get away with this? Because, black Americans don’t invest in black-owned banks. If our banks remain under-capitalized they will never compete with mainstream banks. No competition means you get overcharged.

I am in no way advocating that we economically segregate ourselves from Wall Street. I am advocating that we cultivate competition so you don’t get overcharged while pursuing the American Dream. We will never reach our economic potential if we don’t strengthen black-owned financial institutions.

According to the U.S Census, black America will approach $1.2 trillion in disposable income by 2012. Yet, none of Black Enterprise’s Top 25 Black-owned Banks has $1 billion in assets. Their combined assets total nearly $6.4 billion. That means that out of $1.2 trillion we invest less than one cent per $1000 of our disposable income in our own financial institutions. In effect, other communities can depend on black money to finance their future.

Our biggest obstacle for starting a business, funding college tuition or buying a home is lack of access to capital. Capital comes from financial institutions. If black banks don’t have capital that means they can’t afford to help you buy a home, start a business or send your child to college. Your only option is to go to banks that will overcharge you and not invest in your community.

Pages: 1 2
ACROSS THE WEB
  • http://www.ourfinancialsecurity.org Ana Lytics

    Although I believe the fact that black banks are undercapitalized, I do not believe that fact translate into minorities being overcharged for vital services. There are a couple more steps in that equation. 1. There is a large number of minorities that are “unbanked” meaning that they do not use banking services at all. There are people in America who do not have bank accounts, do not pay bills online or do not even use a bank to cash their bi-weekly check. 2. In order to utilize the services of a black bank or any bank for that matter, it has to be accessible. Bank of America recently announced that it was closing 10% of its branches because so many people are banking online. I find it hard to believe that they will close the branches where they sell the most products and services such as wealth management and stocks and bonds. 3. Finally we must address the greed factor. African Americans are being overcharged for services because people get up in the morning and go to work to figure out how the Bank can make money. A bank is set up and established to make money and to assume that a black bank will not charge a $50 overdraft fee is not realistic. Greed is what caused the financial meltdown and we have the power to stop it.

    I believe that one day African-Americans will use banking services of black owned banks exclusively. I think we have to address getting banking services to the “unbanked”, accesibility to branches and general greed on the part of the financial services industry as a whole first. Maybe once those items are solved, then we can get all members of the African-American community to invest in our own community including our own banks.

  • Khalil Malik

    Because we as a people are not connected with history (ourstory)the ability to respond and what strategy and/or tactic to apply would come from our historical archives that other people have and are benefiting from. No separation nor intergration is the key, once you reconnect the world will be your pearl. I apologize for not putting this in dollars and cents which is a by-product of accountable activity.

  • Grafted Devil (thanx be to Yacub)

    I think this is great!!……and at the same time, we, as White Americans will only worry about Whites……..

    What a concept!!…..

    And lets not stop there……..how about if we, as American-Americans live within our culture and Race….while you, as affffrican-Americans live within your ‘communities’, culture and race…….

    Better yet……..lets split this country and give you all your 40 acres and TWO mules…

    You people can buy, sell, work…whatever you choose to do………..within yourselves…and we, as Whites can live witin ourselves….

    I long for that day, man…..and will pick up arms to bring that about…..

    What a concept!!…….you people buy from your own…..

    and leave us, the American-Americans the fuck alone…

  • Grafted Devil (thanx be to Yacub)

    Oh….by the way……tell the wretched corpse of your scientist [Yacub] that I really appreciate it that he made me White….

    And another thing…….I AM the Grafted Devil…..and you can bet your heart and lungs that I AM here to do OUR work…not yours…..at the expense of you and your people…….

    One more thing before I go…..The other Whites are waking up to your sub-cultured Race….

    And we’re asolutely, positively, without a doubt….sick and tired of holding you people up…and when we, the American-Americans, pull the carpet out from you all…..you will fall back into the sub-culture you are…..and your White servants..they will go with you…….thats what they deserve…

    If it wasnt for these Whites that you people hate so much…..you wouldve NEVER gotten as far you all have….

    Remember that…….fools….

    I dont hate blacks….I hate Whites that love you…

  • mmm

    loosers

  • TechnoDan

    “According to the U.S Census, black America will approach $1.2 trillion in disposable income by 2012. Yet, none of Black Enterprise’s Top 25 Black-owned Banks has $1 billion in assets. Their combined assets total nearly $6.4 billion. That means that out of $1.2 trillion we invest less than one cent per $1000 of our disposable income in our own financial institutions.”

    Less than one cent per $1000 of $1.2 trillion is something less than $12 million dollars, not anywhere near $6.4 billion. I think the author meant ‘less than $10 per $1000 of $1.2 trillion’, which would be something less than $12 billion. The actual figure is close to $5 per $1000.

    I’m suprised no one has pointed this out. As for the math, please check it and tell me if I’m wrong (seriously).

  • DaGameisBigga

    First, our banks do a good job although limited in scope. And lets not forget that they are regulated by the government the same as all banks. That aside, they still fail us in many ways: 1) very often our bankers posture, they are more interested in calling themselves bankers than in serving the communities; 2) they think inside the box instead of finding new ways to help the community; 3) they don’t offer the same level of service as other banks (no doubt because they are under-capitalized).
    Our banks should use the market growth model of business. Sacrifice profitability to gain market share. It worked for the Japanese car makers and countless other type of industries!

  • Amanda

    Mr. Rinkins. Excellent topic, interesting points. Continue writing I am enjoying your perspective on examing the parasite that has paralyzed the black banking system.

  • http://www.ItsPaydayBlog.com Zachary Rinkins

    Thanks for your feedback. I stand by that assessment. I also incorporated the nation’s roughly 40 million black Americans.

  • http://www.ItsPaydayBlog.com Zachary Rinkins

    Thanks for your feedback, Techno Dan. I stand by that assessment. I also incorporated the nation’s roughly 40 million black Americans.

  • Alexandra

    Let’s see…who are the ones defaulting on subprime loans again, anyone, Bueller…Bueller…? Who has the lousiest credit ratings?

    Why are there no chain supermarkets in most major cities? Hint: Demographics.

    If it’s so bad in America, what are you doing here?

  • Jim Dandy

    I think one of the things that disadvantaged black-owned banks is the fact that, per capita, more blacks hold government jobs than any other race. And most government agencies have credit unions for their employees and families.

    Another factor is that in national banks or credit unions that serve a variety of races and ethnicities, it is much easier for these banking institutions to stay solvent by offsetting the poor credit risks with those that historically have a better track record of repaying their loans on time. Studies have shown that even when income levels are the same, blacks still default on loans at a much higher rate than whites.

    When a bank sets out to attract members of a single race and this one race disproportionately has a historically higher number of defaults, bankruptcies, and lower credit scores, they are at a disadvantage from the start.

    Banks (regardless whether they are black-owned or white-owned) are in the business of staying in business. If blacks want black-owned businesses to cater to them and trust them, blacks must show that they are worthy of the black-owned banks trust. This is done by maintaining an attractive credit score and payment history. Black-owned banks are no more interested in losing money (by giving away money to those with poor credit) than are white-owned banks.

  • http://www.ItsPaydayBlog.com Zachary Rinkins

    Thanks for your feedback, Mr. Dandy. Allow me to set up my context. Multiple studies confirm that educated black men earn on average between 13%-27% LESS than their white counterparts. Multiple lawsuit victories confirm that black Americans are overcharged for insurance and other financing. As per Radio One/Yankelovich 2008 Black America Study, 8 out 10 Black Americans pay their bills each month. This means that average black Americans are paid LESS and are charged MORE. We have a smaller pot to live with. Meaning it’s more expensive for us to secure the American Dream.

    We are talking about black Americans given subprime loans. Conversely, their white counterparts with similar economic credentials were given sustainable loans. If higher earning blacks are defaulting on loans I think a significant portion of them are being overcharged in the first place. Proving that some banks are giving some black Americans unsustainable loans.

    If the overwhelming majority of black Americans pay their bills, why are we classified as less credit worthy (your language)? I AM IN NO WAY ADVOCATING THAT WE ECONOMICALLY SEGREGATE OURSELVES FROM ANYONE. I believe black Americans should get some benefit from our nearly $1 trillion annual contribution to this economy. America’s future and economic viability depends on it.

  • http://www.myspace.com/bondfilesinc mr bondfiles inc

    EE converts one family’s pledge into a positive, powerful movement. The EE Foundation needs funds to pay for website development, research, staff, supplies, travel and ongoing technological support. EE is not charging businesses to be on this site. EE is pure! To keep EE alive, donate (click below) or become a sponsor.

    ——————————————————————————–
    EE TV – Positive, Intelligent, Family-Based.

    See that living off of Black business is not that much of sacrifice and has nothing to do with exclusion… it is about love, pride and enlightenment. In the Andersons’ EE journey, they’ve supported dozens of quality Black businesses, professionals, and Black-made products that they would not have even known existed had it not been for their pledge. They have compromised nothing in terms of quality, service, or price. They’ve gained much in terms or knowledge and power. They live a powerful life! They spend their money in places and in ways that can contribute to their community’s improvement. They have brought the issues facing Black business and the economic crises caused by the lack of Black-owned businesses in Black communities back into the national dialogue. This is their journey. This is OUR movement. Click here for the video.

    CBS NEWS

    BET
    BET News examines what EE means and can mean to the Black community. BET explores whether it’s possible and logical to engage in self-help economics. Correspondent Samson Styles conducted interviews with the Andersons to understand how and why they conduct their pledge. The news briefs air Thursdays, 5:20-5:30 during “106th & Park”. Click here for the video from Thursday, June 4th. EE was last featured on June 18th. Stay tuned!
    First Business Morning News
    EE can make lasting and tangible impacts for Black business and economically deprived Black communities. In this two-part segment, First Business Morning News shows how EE affects unemployment, incarceration, and failure rates of Black businesses. It also discusses the “Is this racism?” issue. Hear from John, Maggie and the business owners impacted by their pledge. Suhmeke Rainey reports. Click here for Part 1, and here for Part 2.

    TIME
    When was the last time TIME talked about buying Black? Or interviewed Black small business owners from the South Side of Chicago? Or discussed economic empowerment in the Black community? The Empowerment Experiment is working! EE is elevating the issues facing Black business and underserved minority communities into the national dialogue. In this ‘day in the life’ of EE, TIME talks to the Andersons and some of the business owners they now support everyday through EE. Meet Joslyn Slaughter, the owner of Jordan’s Closets where Maggie Anderson shops for herself and her daughters. See Karriem Beyah, the owner of the farmers market, Farmers Best, where the Andersons get their groceries. Steven Gray, Time.com correspondent, conducts the interview. Click here to see the video.

    ——————————————————————————–
    CNN
    In this live interview with CNN’s Don Lemon, the Andersons explain why they embarked on this special experiment, and how they believe they can, through their journey, help dispel negative stereotypes about Black business. They also explain why empowering the historically underserved Black community is good for all of America – not just the Black community. Click here to see the video.

    ——————————————————————————–

    FOX BUSINESS
    John and Maggie Anderson, EE Founders, were guests on Neil Cavuto’s show, The Cavuto Business Report. Here, the Andersons had the opportunity to explain the larger purpose of EE, to empower underserved communities by putting Black businesses “on equal footing” (as expressed by Cavuto) in America. This interview also highlights that as EE is primarily a case study on the efficacy of self-help economics, it is not as controversial as some make it out to be. Click here to see the video.

    ——————————————————————————–

    CNN’s “The Situation Room” with Wolf Blitzer
    Wolf Blitzer invited The Empowerment Experiment into CNN’s The Situation Room. This segment shows highlights of a day in the life of EE, with narration by award-winning journalist, Susan Roesgen. EE is about uplifting quality Black businesses and proving that supporting them leads to stronger Black communities. This piece brings the world into the Anderson home and their life in The Empowerment Experiment. Click here to see the video.

    ——————————————————————————–

    Chicago Urban League and Fox 32′s “Next TV”
    Chicago Urban League’s Next TV series spent some time with the Andersons when they first set out on their EE journey. This piece gives a “day in the life” of The Empowerment Experiment as the Andersons live off of Black businesses. Click here to see the video.

    ——————————————————————————–

    Chicago Urban League and Fox 32′s “Next TV” – Part 2
    EE is four months old now … and we all know it is much more than the Andersons. It is the businesses they patronize, the entrepreneurs they support, the communities they help, and the millions of consumers, businesspeople, civic leaders, journalists and investors out there who are starting to talk about economic empowerment for Black people in America. In this follow-up segment, Next TV checks in on the Andersons to explore how their experiment is doing. Are they making a difference? Will others start to EE too? Click here to see the video.

    ——————————————————————————–

    For more EE TV, visit The Press page.

    ——————————————————————————–

    Support the EE Foundation and EE’s ‘What If?’ Campaign Today!

    The Empowerment Experiment Foundation’s (EEF) focus is research and development concerning economic empowerment in underserved communities. EEF’s research is based on the Andersons’ pledge and experiences finding and supporting specifically Black businesses, professionals and products created by Black manufacturers, as the Black community is a historically underserved community, does not practice self-help economics and disproportionately suffers in every measure of social and economic progress. EEF will also study the impacts of What If?. What If? is the national economic development campaign aimed at promoting and stimulating enhanced entrepreneurship and self-help economics in the underserved Black community. EEF will collect data from this campaign to create a new body of knowledge about the power of self-help economics for revitalizing underserved communities. The purpose of the research, the national campaign, and the resultant study is to measure the economic impact of self-help economics and increased entrepreneurship in economically deprived communities. EE needs your help. The Andersons can not create a movement by themselves!! To support the EEF’s research and study of the What If? campaign, click the ‘Donate’ button below, email support@empowermentexperiment.org or mail your contribution to: The Empowerment Experiment Foundation, Inc., P.O. Box 464, Berwyn, IL 60402.

  • http://mindriver.vox.com/library/post/before-you-knock-direct-mail-just-check-your-list-quality.html Elizabeth Tombrello

    I learned a lot from this entry and will definitely keep it in my favoritse. Thanks for the effort you took to elaborate on this subject so deeply. I look forward to future posts.

  • http://watchgethimtothegreek.org/ Daisy Almas

    Since i was 15 i always loved electronics , i love how they evolve.

  • Pingback: Banking on Our Own | BlackNewsTribune.com

  • http://Douglas Plailiaimmavy

    Anyone else thinking of re-financing the mortgage at the new low rates this morning? I’m seeing some 5.30 APRs for 30yr fixed w/ 0 points.