Banking on Our Own

Investing in black-owned financial institutions is investing in ourselves

Credit and capital are the lifeblood of the American economy. If black-owned banks lack credit and capital black America will remain economically anemic. More deposits means higher revenue. Higher revenue means more investment in black life. More investments mean stronger black businesses. Stronger black businesses mean higher black employment rates. That means more homeownership, community investment and business development.  But, economic empowerment is a two party effort.

Black owned- banks must do more to attract black customers. They can’t just show up to church and expect our loyalty. Black owned blacks could offer free children’s savings accounts to schools and churches that serve minority populations. Banks could also advertise in black media. And, sponsor events that matter to us.

Chicago’s Ariel Investments is a perfect example of business excellence and community outreach. Ariel consistently ranks as one of Black Enterprise’s largest black-owned asset management firms. The firm balances great profits and great service. It runs a charter school. It also produces a radio show on a black-owned station. They also sponsored The Color Purple’s theatrical run.

After black-owned businesses produce competitive products and serve us, it is our responsibility to give them a fair shot at our business. We could consider directly depositing 10 percent of our paychecks into black banks. We could purchase life insurance from black insurers and companies. We could also invest for retirement with companies like Ariel. As they grow, we grow.

We could strengthen black America one deposit at a time.

Zachary Raynell Rinkins is the host and producer of “It’$ Payday”, an AP award winning 90-second personal-finance lifestyle radio show produced for Rinkins Media Ventures, Ltd. You can read his blog at

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  • 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…… 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… 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… 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… wouldve NEVER gotten as far you all have….

    Remember that…….fools….

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

  • mmm


  • 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.

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

  • 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.

  • 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.

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  • 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.

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

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  • 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.