If you are not a part of the solution to Blacks’ problems, it should be evident, that you continue as part of the problem. The answer to Blacks’ economic woes is in our own hands and control. The simple capitalistic solution to Black Americans’ economics is to place our money and assets in banks owned by other Blacks. Third generation Black banker, B. Doyle Mitchell, says “If Blacks used their assets strategically they’d be as rich as other groups in America.”
Banks are Western communities’ most important institutions. Banks are stabilizing forces in the communities they serve, loaning money to businesses to help them expand and create jobs. Banks help customers become home owners and existing home owners make repairs and additions to their property. Every community except Blacks’, finance banks and they in turn finance their people’s needs.
In Washington, D.C. three generations of Mitchells have made an enormous impact on Blacks’ development. B. Doyle Mitchell’s family is an example for conscious Black consumers to emulate. In 1934 his grandfather, Jesse H. Mitchell, foundered Industrial Bank with the equivalent of $3.25 million. Industrial went on to compile an illustrious record servicing America’s most affluent community of Blacks.
Today, there are more than 40 million African-Americans living in the U.S., but less than 1 percent of all federally chartered banks are Black-owned. Although 13 percent of the U.S. population is African-American, only 0.35% (24 in total) of U.S. banks is Black-owned. African Americans’ buying power is projected to top $1.1 trillion, yet the number of Black-owned banks even lags behind the number of financial institutions owned by Asian-Americans, who made up just 5.1 percent of the total U.S. population of 314 million people and own 40 banks nationwide.
Blacks need to talk to each other about how “banking Black” advances the system of capitalism in our communities. Blacks in D.C. have a history of banking Black. After the Civil War, Blacks’ collective capitalism flourished. Capital Savings Bank, the first bank organized and operated by African Americans, was founded in Washington, D.C., Oct. 17, 1888. Although Blacks’ incomes and employment options have increased over past decades, Black-run banks have been struggling. These banks, historically headquartered in the heart of traditional Black communities such as Chicago’s South Side, New York’s Harlem and Washington, D.C.’s Shaw, fail out of favor with post-Civil Rights’ up-and-coming Blacks. The Federal Deposit Insurance Corp. counts just 25 Black-owned banks, the majority of which are on shaky ground, struggling to hold on. In 2013 60 percent of Black-run banks lost money.
A community is defined as a group of people with a common characteristic or interest. It’s a body of persons with common concerns. Check their records, Black-owned banks have been, and are, the backbone of many African American communities. However these banks have limited resources because the greater body of Blacks refuses to deposit monies there. Blacks have trillions of dollars in spending power, however; most Black banks struggle to get any significant population of Blacks to make deposits there. Contemporary Blacks have an idiotic behavior of spending and putting money away from where they live. There needs to be a conversation among African Americans about Black banks’ common-cause with Blacks and their communities.
The greatest challenge facing African-Americans is increasing our collective wealth. Toward that the Congressional Black Caucus Foundation, Inc. (CBCF) recently made a model $5 million investment in African American-owned banks. The CBCF’s then-chair Rep. Chaka Fattah said, “CBCF has invested in this partnership because we need these institutions to grow and thrive.” Blacks need to broadly explore and discuss their aversion to putting money in another African-American’s hand.
Too many Blacks are convinced that the White’s ice is colder. In order to create Black wealth Blacks must recycle their dollars by supporting Blacks’ banks, businesses and creating more. Black-owned banks are vital to achieving this. Let the word go out that every Black that who has a checking or savings account should transfer money to a Black owned bank. Not to do so is self-defeating.
William Reed is publisher of “Who’s Who in Black Corporate America” and available for projects via Busxchng@his.com.