What are Black-owned banks and how to support them?

By Karen Bennett

Where you bank can promote racial equity and inclusion. Supporting Black-owned banks can help economically empower Black communities, who historically have faced discriminatory banking practices and systemic racism, such as redlining.

Today, Black Americans are the most likely of any racial group to be unbanked or underbanked. While 2.1 percent of white Americans are unbanked (have no savings or checking account), 11.3 percent of Black Americans are unbanked, according to the latest FDIC survey.

Additionally, Black individuals face the highest denial rate for mortgages. According to 2021 Home Mortgage Disclosure Act data, 15.3 percent of Black Americans were denied mortgages, compared to 6.3 percent for non-Hispanic white Americans.

As an alternative to larger institutions, Black-owned banks have provided mortgages, loans, and accounts to people of color when other banks would not provide those services to them.

“Black banks are typically mission-focused, and they are all community banks,” says Michael Neal, principal research associate for the Housing Finance Policy Center at the Urban Institute.