Struggling black banks have gotten a much-needed financial injection from the Congressional Black Caucus Foundation (CBCF). The foundation just kicked off its Annual Legislative Conference with the theme “It Starts With You.” The CBCF deposited $5 million into five black-owned banks, continuing a national movement launched by the National Bankers Association, to reinvest in the community by supporting black- and minority-owned banks, reports Forward Times.
“Our $5 million investment is part of a new effort at the Foundation to strengthen the economy and Black communities. We saw a need and an opportunity to support much needed progress in economic recovery in African-American communities and we seized it,” said CBCF President/CEO Shuanise Washington at a press conference.
“The Foundation wants to set an example. And we think the best way to do that is not rhetorically but through action. And where we invest our money, we think will lay a pathway for others who want to follow and support the work of the Foundation,” added 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, a family trying to buy a home a get a mortgage, these institutions are vital.”
Each bank — The Industrial Bank in Washington, D.C.; Liberty Bank & Trust Company in New Orleans; Mechanics & Farmers Bank in Durham; Chicago’s Seaway Bank & Trust Company; and City National Bank of New Jersey in Newark — received $1 million.
The push to reinvest in black banks started last year when the U. S. Black Chamber of Commerce and the Washington, D.C.-based National Bankers Association (NBA) established a partnership to set up the Chamber’s primary account with Industrial.
According to Doyle Mitchell, NBA chair and president/CEO of Industrial Bank, which turns 80 next year, the millions will do a lot in helping individuals in communities that have been hardest hit back the economic crisis.
“I have put the numbers together and I see now…Over 50 percent of our loans that we make go into underserved communities and nearly 80 percent of our loans go right here in Metropolitan Washington. According to the FDIC, small banks, 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,” Mitchell said. “Most of the communities served by African-American banks are urban and disadvantaged. And while banks of other ethnic groups, Asians and Hispanics do an excellent job at that we do the same job right here in African-American communities.”
These banks can be a much-needed source of capital to black-owned businesses.
“When we surveyed our businesses, the common concern they all had was access to capital,” said U. S. Black Chamber President/CEO Ron Busby.
Black banks, added Dr. Russ Kashian, an economics professor at the University of Wisconsin-Whitewater, who participated in the press conference, are vital to their communities. “They serve several key roles. They provide banking services to areas that are often barren of any other mainstream banking services. They attract monies into the community through reasonably aggressive interest rates on CD’s. They 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,” he said.