Banking Black May Not Be The Sole Answer To Closing The Racial Wealth Gap, But It’s A Solid Start
Good reasons to bank Black.
February 28, 2019 at 9:28 pm
It’s almost been three years since Killer Mike’s call to action to #BankBlack. Sick and tired of being sick and tired of the killings of Black people by police officers and echoing the voices of past black leaders, spanning from the Jim Crow era to the Civil Rights Movement, Killer Mike urged people to engage in a financial boycott of the mainstream banking system — a major, if not the main, artery of our American capitalism.
In an interview on HOT 107.9 with MzShyneka Queens, he made it very plain for the big banks: “Until the corporations start to speak on our behalf, I want all my money.”
This was a clear effort to divert money away from the system.
The Real Spill
Structural racism has been pervasive and deep-seated in the banking system. Major financial corporations are guilty of practices that have become known as redlining, a discriminatory practice by which banks refuse or limit their products and services within specific neighborhoods and communities. These communities are disproportionately minority — more specifically black, and to a high degree brown, as well.
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Banking Black is by no means the panacea to closing the racial wealth gap or ending systemic racism. It can be an arrow, a tool in the quiver and a multi-pronged approach to improving the financial stability and, ultimately, the financial literacy of communities in need — especially ones that reside in banking deserts and are surrounded by alternative financial services that engage in predatory lending practices.
According to the FDIC, minority depository institutions (MDIs) are significantly more likely to lend in low- to moderate-income communities and to minority borrowers than non-MDIs. In the section titled "Social Impact of MDIs," from the FDIC’s study on Minority Depository Institutions: Structure, Performance, and Social Impact, “these organizations often promote the economic viability of minority and underserved communities, namely populations that are underserved by mainstream financial institutions”.
The Next Move
If you are a budding entrepreneur, established business owner or future homeowner and believe that not enough loans are being made to Black borrowers, you should bank Black!