Congressional Black Caucus Invests In D.C.’s Last Black-Owned Bank $1M
The number and impact of black-owned banks is dwindling across the country. In 1994, there were 54 African-American-owned banks; currently there are 21, according to the Federal Deposit Insurance Corp. So when the last remaining African-American-owned bank in the Washington DC area received $1 million from the Congressional Black Caucus Foundation, it was a major boost.
The CBCF purchased $1 million worth of certificates of deposit from Industrial Bank as part of a new initiative to help make loans more readily available to underbanked communities and minority owned business, reports The Washington Post.
“Minority and women-owned banks have been an important source of credit and other financial services to minority communities,” A. Shuanise Washington, president and chief executive of the Congressional Black Caucus Foundation, told the newspaper.
Black banks have been struggling over the years, especially during the recession. Many of these institutions have less than $100 million in assets.
“The crisis had a devastating effect on the economy of the country, but it had even more of an impact on the minority community,” said Rep. Chaka Fattah (D-Pa.), the chairman of the foundation.
The CBCF investment, which is one of the most substantial given to African-American banks in recent years, reflects a renewed interest among national organizations that are looking to invest in minority-based businesses, noted William Michael Cunningham, who helps area businesses find socially responsible ways to invest their money.“Certainly there is a growing trend here,” Cunningham said. “It is yet another example of how communities are finding resources for dedicated causes, in this case African-American banks.”
As we previously reported, the CBCF gave total of five African-American-owned banks received $1 million each. The other banks were Seaway Bank and Trust in Chicago, Liberty Bank and Trust in New Orleans, City National Bank in Newark and M&F Bancorp in Durham.
Already, 80 percent of the funds have been dispersed. The remaining $1 million will be distributed among the five banks in the first quarter of 2014, Washington explained.
This is the first time the foundation has invested in African-American-owned banks; the organization usually focuses its efforts on advancing the role of African Americans in politics and public policy.
“Given financial needs in the black community, a community that experienced a 54 percent decline in wealth as a result of the great recession, this focus is entirely justified,” Cunningham said.
Founded in Washington in 1934, Industrial Bank has $350 million in assets with eight branches — six in the District, and two in Prince George’s County.
“These deposits provide the liquidity for Industrial Bank and others to make loans in the hardest-hit communities across the nation,” B. Doyle Mitchell Jr., president and chief executive of Industrial Bank, said in a statement.