By LaToya Irby
History of Black-Owned Banks
The first Black-owned banks were founded to provide economic opportunities and financial services to Black communities that were excluded from mainstream banking. A bank is considered Black-owned if 51% or more of its voting stock is owned by Black Americans who are U.S. citizens or permanent residents.
Capital Savings Bank, the first Black-owned bank, opened on October 17, 1888, in Washington, D.C. Just a few months earlier, True Reformers Bank had become the first Black-owned bank to receive a charter, and officially opened its doors in April 1889 as the second black-owned bank.
By 1934, there were 134 Black-owned banks, but only nine survived the Great Depression. The number of Black-owned banks grew again in the 1970s to around 50, but the savings and loan crisis of the 1980s reduced that number to 27. Today, only 21 Black-owned banks remain. Although few in number, these banks remain crucial for supporting economic growth and opportunities in Black communities.
While there are relatively few Black-owned banks, Black-owned credit unions have a stronger presence, with over 200 currently operating across the country. Black-owned credit unions offer services like checking and savings accounts, affordable loans and financial education. Because they focus on serving their members, credit unions can offer lower fees, better interest rates, and a more personalized approach to financial services.
There are currently more than 250 Black-owned banks and credit unions in America with locations in 28 states, including Washington, D.C. These financial institutions address inequalities in the banking system by providing essential services including savings accounts and loans. Read on for a list of Black-owned banks in each state.