Congressional Black Caucus Foundation makes historic deposit in Black banks
By Hazel Trice Edney
Trice Edney Newswire
WASHINGTON — The Congressional Black Caucus Foundation kicked off its Annual Legislative Conference (ALC) by depositing $5 million into five Black-owned banks, continuing a national movement to reinvest in the community by supporting Black and minority-owned banks.
“Our $5 million investment is part of a new effort at the Foundation to strengthen the economy and Black communities,” said CBCF President/CEO Shuanise Washington at a press conference Sept. 17. “This investment is a critical initiative in lifting the economic fortunes of African American and minority communities. Historically and still today, minority and women-owned banks have been an important source of credit and accessible financial services. Minority-owned banking is key to reaching unbanked, under-banked and financially underserved African American communities.”
Members of the Congressional Black Caucus have long pointed to the scourge of economic suffering and unemployment in Black communities as being among the chief issues across America. Two years ago, CBC members even held job fairs around the country, watching as African Americans lined up around entire city blocks.
“The Foundation wants to set an example. And we think the best way to do that is not rhetorically, but through action,” said CBCF Chairman Chaka Fattah (D-Pa.). “African American financial institutions play an extraordinarily important role in the eco-system of the development of entrepreneurs in our communities; also to help families seeking to send a young person to college or a group of people who are trying to organize and develop a religious institution, or a family trying to buy a home a get a mortgage, these institutions are vital.”
The five Black banks receiving $1 million each are Industrial Bank in Washington, D.C.; Liberty Bank & Trust Company in New Orleans; Mechanics & Farmers Bank in Durham; Seaway Bank & Trust Company in Chicago and City National Bank of New Jersey in Newark.
The movement to reinvest in Black banks actually started in earnest last year when the U. S. Black Chamber of Commerce and the Washington, D.C.-based National Bankers Association, led by President/CEO Michael Grant, established a partnership to establish the Chamber’s primary account with Industrial.
“If Black Americans will significantly increase their support of Black businesses, in a single generation, we would witness a drastic reduction in unemployment, an increase in high school graduation rates and a decline in crime in our neighborhoods,” Grant said.
“Over 50 percent of our loans go into underserved communities and nearly 80 percent of our loans go right here in Metropolitan Washington. According to the FDIC, small banks and community banks, make almost 50 percent of all small business loans. We know that small businesses in this country employ nearly 80 percent of the all the country’s individuals,” said Doyle Mitchell, NBA chair and president/CEO of Industrial Bank.
U. S. Black Chamber President/CEO Ron Busby stressed the need for strong banks to undergird small businesses that, in turn, fuel the economy. “When we surveyed our businesses, the common concern they all had was access to capital,” said Busby, who oversees 112 chambers in 24 states, representing over 240,000 Black-owned businesses nationwide.
“If the number one concern for our businesses is access to capital, then the number one concern for our businesses is unemployment. There are roughly two million African American owned businesses in America and approximately 14 percent unemployment for African Americans. The African American unemployment rate in this country is almost double the national average. If we can grow our firms to where they have the capacity to employ just one additional employee, we can quell the high unemployment that plagues our community,” said Busby.
The benefits of Black-owned banks are extensive, experts say.
Dr. Russ Kashian, an economics professor at the University of Wisconsin-Whitewater, who participated in the press conference, said Black-owned banks “are a source of valuable ‘jobs with ladders’ for the neighborhood — these jobs for tellers, loan officers, mortgage originators offer family wages and the opportunity for training and skill enrichment.”
President Obama has made it clear that support for the “middle class” is a key strategy to strengthen the economy. But, Washington says she hopes the move to strengthen Black banks will also “draw the traditionally unbanked poor into the mainstream economy.”
Fattah hopes other institutions will take heed to the example that has been set.
“The pillars of power have to be both political and economic,” he said. “And we are leaning forward to say that we’re going to make an investment and we expect that others who are our allies and our friends and support the foundation will follow likewise.”