The banks are committed to rebuilding black communities.
Sheree R Curry
Bank branches have been battered and burned across America in 2020 following the death of George Floyd. Whether it’s the Wells Fargo location on Walnut Street in downtown Philadelphia, the Chase Bank on Spring Street in downtown La Mesa, California, or the American bank branch on East Lake Street in Minneapolis, rioters sent a strong message against systemic racism when they breached these buildings. In response: The banks are sending their own message: they are committed to these neighborhoods.
“So often when tragic events happen, companies abandon communities of color and deem them either unsafe or unprofitable, but our commitment is to the community,” says Greg Cunningham, executive vice president and chief diversity officer. of the US Bank.
US Bank remodeled and reopened the three Minneapolis locations that were destroyed during the civil unrest. “We never thought about whether we were rebuilding or not,” Cunningham says.
Reconstruction goes beyond bricks and mortar. JPMorgan Chase & Co., the nation’s largest bank, has made a five-year, $30 billion “racial equity pledge” “to bring economic opportunity to underserved communities.” Bank of America, PNC Bank and Citi have independently pledged at least $1 billion over two to five years for diversity initiatives.
There are a number of ways these dollars are being used to close the wealth gap for people of color, many of which resemble programs rolled out decades ago: Giving to community investment projects; fund scholarships at historically black colleges and universities (HBCUs); improving access to financial literacy for black and brown customers; and create a pathway for the recruitment, retention and promotion of people of color at all levels of institutions.
This time, the big five banks – JPMorgan Chase, Bank of America, Wells Fargo, Citi and US Bank – have also pledged increased support for black-owned banks. Wells Fargo announced in 2021 that it was investing in other black-owned banks, bringing its total to 13.
There are only 19 black-owned banks left in the United States, according to the FDIC. In 1976, there were 50. The Federal Reserve Bank of St. Louis reports that black-owned banks have substantial positive impacts on their communities through mortgages and small businesses.
Companies outside the banking world also pledge their support. Netflix has delivered on its June 2020 pledge to support black-run financial institutions. In December 2021, he deposited $100 million in accounts at banks across the country, according to Netflix’s “Banking on Us” page.
Aflac, Costco, Dick’s Sporting Goods, PayPal and the #BankBlack bandwagon. These companies invest through the Black Economic Development Fund, which disburses the $250 million each donated through black-owned banks and other black-owned businesses.
When First Independence Bank in Detroit sought to expand into other markets, Wells Fargo donated a facility in Minneapolis, as well as an executive – Damon Jenkins. The Wells Fargo District Manager has been tapped to lead First Independence as Senior Vice President/Twin Cities Regional Market President. Four other financial institutions: Bank of America, Bremer Bank, Huntington Bank, and US Bank joined forces to bring First Independence to the city.
In April, First Independence became the only black-owned bank in Minnesota.
The timing and location of the Minneapolis branch is appropriate and deliberate. First Independence grew out of the Detroit riots in 1967 — “a problem of police brutality that led to days of unrest,” said bank chairman and chief executive Kenneth Kelly, adding that he had “a bit of deja vu in 2020 when we saw that happen.” start all over again on what I would consider an epic scale” with protests following the murder of Floyd.
When members of Minnesota’s banking industry figured out what to do after the protests, they spoke to Kelly. He says he suggested, “You have to do something bold to show that you really mean what you say you mean.” And from there, “came the idea of considering opening an African-American bank in this market”.
Kelly adds that this collaboration was unprecedented. “You’ve never seen five big institutions that control 80% of the deposits in a market decide that we’re going to bring in a new competitor. Egos were left at the door.
FDIC reports reveal that black-owned banks are resonating in black communities. They approve a higher percentage of loans, whether home mortgages or small business financing, to people of color than traditional banks.
Cunningham says he is considering opening an account with First Independence, as is Twin Cities-based business reporter Dee DePass. “I know the deposits there help fuel lending to small businesses and especially businesses owned by black people and other people of color,” DePass says.
“I don’t have billions of dollars, but maybe my little bit can pay for it and help a struggling small business or entrepreneur. I think it is important.