SBA's Ashely Bell: Investing in Black-Owned Banks Invests in Your Community

Ashley D. Bell

Tuesday, September 1st, 2020

In the year 2000, there were over 50 black-owned banks and today there are just over 20. Some 60% of Black people are unbanked or underbanked.

Over the past two months, I reached out to the president/CEO or chair of each of the black-owned banks across the United States to talk about this and what it means for America’s 2 million Black-owned small businesses. The results point to significant change happening in our communities through the increased investment in America’s Black-owned banks. There are fewer Black-owned banks today, and their mission is just as critical. As small businesses and corporations continue to see the importance in moving their business to Black-owned banks, we will witness the number of underbanked Black people decrease and the opportunities for Black entrepreneurs increase. You see, the more profitable Black banks become, the more of their profits go to support Black businesses and the communities they serve.

I had one of my very first conversations with Cynthia Day, president and CEO of Citizen’s Trust Bank of Atlanta, one of the nation’s largest Black-owned banks. Citizen’s Trust Bank was started in 1921 on the heels of inequality and has consistently strived to drive credit into wealth. Citizen’s Trust has been a supportive participant in the Paycheck Protection Program, providing an example of how the bank supports entrepreneurs -- all entrepreneurs. This support works both ways. Citizen’s Trust Bank places their storefronts strategically in underserved communities, providing the option to utilize a bank and build credit and an avenue for home ownership rather than a quicker option such as check-cashing firms or pawn shops. Building credit builds wealth, and building wealth builds a stable community.

Carver State Bank, located in historic Savannah, Georgia, is certified as a Community Development Financial Institution (CDFI) and is led by Robert E. James, president. I have worked extensively with Mr. James as this Black-owned bank has made a decision to increase their SBA loan products, providing more opportunities to underserved communities. Carver State is the only black-owned bank in the area, including Charleston, South Carolina or Jacksonville, Florida. When a customer invests their money through Carver State Bank, they are investing in an entire region. Carver State Bank also supported the Paycheck Protection Program and they participate in other local programs to provide relief during the COVID-19 pandemic.

Another black-owned bank leader creating regional economic prosperity is James Sills, president and CEO of Mechanics & Farmers Bank (M & F Bank) of Charlotte, North Carolina. M&F Bank has seen a significant uptick of investments from businesses into the bank during the last few months -- including minority customers such as white corporations and Hispanic-owned businesses that are intentionally investing in a Black-owned bank to invest in the community it serves. The funds are redeployed in the form of loans back into the communities, creating wealth and opportunity and economic stability. Through the Paycheck Protection Program, M&F focused on assisting small- and medium-sized businesses, nonprofit organizations and churches, positively impacting well over 1,000 jobs.

There are 21 black-owned banks across the United States that share the mission of Dr. Martin Luther King Jr.’s dream of America’s promissory note -- all American’s need access to credit. A community without credit is like land without water. Nothing grows. Black banks reach that last mile by looking to make good on American’s promissory note. We can help them do the heavy lifting of raising a community beyond a history of redlining and predatory lending.

Black-led banks ever since Frederick Douglass and the Freedman’s Bureau have been purposed with moving a people that were once considered capital to becoming capitalists. Many of the Black-owned banks offer the same products and services as other banks with comparable rates. The difference is that when we support the Black-owned lending institutions, it creates a ripple effect in underserved communities. A new SBA loan, a car loan, a new mortgage from outside the underserved community creates the water we need to grow opportunity so this can last generations of Americans left to live in an economic desert. We can all grow the equity we seek by reaching out to a minority-owned bank during this August’s celebration of Black Business Month.


Ashley D. Bell is Regional Administrator, U.S. Small Business Administration and Entrepreneurship Policy Advisor for the White House Opportunity & Revitalization Council.