I don’t know about you, but my social media feeds have been filled with lists of black-owned businesses. As the BLM Movement grows and racial inequality is acknowledged in the mainstream a bit more, more and more Black people are realizing their buying power. $1.2 trillion to be exact!
Buy Black is an attempt to close the racial wealth gap which was created over centuries of slavery, Jim Crow and systemic racism. Buying Black helps keep money in local communities through small businesses that often suffer from discrimination and struggle to get loans from banks.
Supporting Black-owned businesses keeps money local by allowing those businesses to hire more employees. Because of the systemic racism, many Black business owners do not have investors; thus, they run their businesses as sole proprietors. This doesn’t always allow for them to have the extra capital to pay employees.
We have also seen more people making huge donations to HBCUs and top high school athletes choosing HBCUs. This too is an acknowledgment of the power Black Americans and their money have. Well known high school athletes moving to HBCUs will help those schools bring in revenue with more air time on television and more sponsors.
Now rapper Killer Mike has brought to our attention #bankblack.
There are not many black-owned banks in the United States. Currently, there are 21 Black-owned banks in the US. Twenty years ago there were 48. The 2008 financial crisis hurt many of them. Yet, the “too big to fail” banks were saved.
Since the #bankblack started trending, One United Bank, located in Boston, has had an increase of $50 million dollars in investments, 40,000 new accounts. Sounds amazing, doesn’t it.
But to put it in context, JP Morgan has more than 150 bank branches and every single one of them is bigger than One United.
One United Bank is the country’s largest black-owned and FDIC backed bank. They are challenging the Black community to open an account with $100 and to encourage 20 of their friends to do the same!
History of Banking
The history of Black-owned banks can be traced back to 1865 to Freedman’s Savings and Trust Co., which was set up by the government to help newly freed black slaves (since many other banks would not deal with them). It lasted less than 10 years. This is not an unusual fate for Black-owned banks.
According to its website, "OneUnited Bank began almost 50 years ago with the opening of Unity Bank & Trust in Boston, Massachusetts. OneUnited Bank was established by combining Black-owned banks across the country – Founders National Bank of Commerce in Los Angeles, Family Savings Bank in Los Angeles, Peoples National Bank of Commerce in Miami and Boston Bank of Commerce – with the same mission, to create an institution to garner our spending power and channel it back into the communities we serve"
In 2019, “too big to fail” banks topped $200 billion in combined profits while black-owned banks were able to just beat $5 million. One of the reasons for this is that black-owned banks are often located in low to middle-income areas.
Banking and buying Black help strengthen local communities and close the racial wealth gap, but not solely by keeping the money in the community. Movements like this force white-owned companies to take action. Recently, Netflix has agreed to transfer $100 million to lenders that support Black-owned businesses.
In a capitalist economy, money speaks. The buy and bank Black movements are not just for Black Americans. This is an opportunity for all Americans to speak with their money to urge businesses to be better.
Take a look at One United Banks financial education resource center!