Are you interested in racial equity? According to a research report on Brookings.edu, the racial wealth gap remains significant. In 2019, the median net worth of a typical white household, $188,200, was 7.8 times greater than that of a typical Black household, $24,100 (Bhutta et al., 2020). Most houses are bought with a mortgage and most businesses rely on credit to fund their expansion. This report documents that, at a local level, there are stark contrasts in access to credit for African Americans: Interest rates on business loans, bank branch density, local banking concentration in the residential mortgage market, and the growth of local businesses are markedly different in majority-Black neighborhoods.
The Chicago Tribune reported modern-day redlining persisted in 61 metro areas even when controlling for applicants' income, loan amount, and neighborhood, according to millions of Home Mortgage Disclosure Act records analyzed by Reveal from The Center for Investigative Reporting. The yearlong analysis, based on 31 million records, relied on techniques used by leading academics, the Federal Reserve, and the Department of Justice to identify lending disparities. It found a pattern of troubling denials for people of color across the country, including in major metropolitan areas such as Atlanta, Detroit, Philadelphia, Rockford, Ill., St. Louis, and San Antonio. African Americans faced the most resistance in Southern cities - Mobile, Alabama; Greenville, North Carolina; and Gainesville, Florida - and Latinos in Iowa City, Iowa.
If you are interested in creating equity, this is what you need to know. Black-owned banks make capital more accessible because they approve a higher percentage of loans to Black applicants than other banks, but their impact is limited by their low numbers and often precarious financial standing (Burton, Scheck, and West, 2020) according to Brookings.edu.
Creditmashup.com reported Black-owned banks provide 67% of mortgage loans to Blacks, according to 2013 remarks by Martin Gruenberg, former chair of the FDIC. While non-black-owned community banks had fewer than 1% of mortgages go to African-Americans.
Creditmashup.com listed these top black-owned banks
1. OneUnited Bank
2. Carver Federal Savings Bank
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