Wall St. and Business Wednesdays: Black Banks - A Way To Fix Stupid! by William Reed
No matter how mainstream your mindset may be; at the bottom line, race still matters.
If African American communities are to grow in economics, more race-based consciousness and strategies will have to be engaged. Strong financial economic structures must evolve to stimulate economic growth and development among African Americans. A key ingredient to African American’s economic strategy is the role black banks play in our lives.
Why even talk about “economic empowerment” and not have deposits in a black bank? Since the late 1800s, Black banks have been prime factors in Black Americans’ economic development. Black banks have a distinct commitment to us and are places where blacks have gone over the past 200 years to facilitate business. After the Emancipation Proclamation of 1863 ended slavery in the southern US, blacks were left in chaos. Though institutionalized slavery had ended, freed blacks were left to fend for themselves with literally nothing. Because institutional slavery defined them as non-citizens, blacks had no access to resources needed to matriculate socially or economically: social organization (government), institutional education (knowledge base), and entrepreneurism (delivery of products and services), blacks of the period were in dire need of ways to facilitate establishment, development, and distribution of resources.
America’s early black middle class were invariably entrepreneurs, with enterprises rooted in the delivery of vital services to black communities – services the white community was either unable or unwilling to deliver. Early black fortunes were built on industries such as insurance, undertaking, banking, media and health and beauty. In segregated society enterprising black businessmen and women insured, buried, lent money to and portrayed African Americans fairly in publications. In the 21st Century, black-oriented financial institutions represent the best platforms through which to build and expand. These basic processes are rooted in our history. When today’s African Americans figure out that economic power is built through mutual interests, we’ll recognize that our interest in black banking is larger than the amount posted in a bankbook will ever be.
After slavery, benevolence and community-building emerged through mutual aid societies, fraternal orders and black churches. Benevolent societies established before the end of slavery helped blacks’ transitions into freedom by providing them with financial resources. Black fraternal orders served the race with a commitment that deserves more prominence in documentation of America’s history. The Grand Fountain of The Order of True Reformers was a beneficial society, founded by William Washington Browne an ex-slave from Georgia, which blacks could join, and out of which many insurance companies, businesses and banks of the period were formed. The Order of True Reformers was a Fraternal Organization of African Americans organized in the South after the Civil War to set up business and social avenues for blacks. W.E.B. Du Bois called Browne's fraternal organization: "The most remarkable Negro organization in the country." By insuring the lives of their members, and re-investing the monies, these societies became prosperous business.
Today’s black banking core is represented by the National Bankers Association (NBA), founded in 1927. NBA member banks are in 29 states, 2 territories and 60 cities. They employ over 15,000 people; have assets in excess of $31 billion, service 3 million depositors and distressed communities beset by social and economic problems with employment opportunities, entrepreneurial capital and economic revitalization.
As we increase our interest in the growth of our kind through racial identification and consciousness, African Americans residing in cities that have black-operated banks will patronize them with deposits; because such deposits work toward the overall benefit of our communities. Race matters, because black bankers are more likely than whites to provide us loans. They’re more apt to work with, and loan to, black businesses.
Those of us serious about increasing wealth can earn dividends that accrue in many ways by using black banks. In addition to depositing funds in these banks, enterprising African Americans should buy Black Bank Stock and encourage businesses we work with to share some of their accounts with them. We should make legislators accountable for making sure government funds are deposited in black banking systems.
William Reed is the President of Black Press International (www.blackpressinternational.com). He can be reached at firstname.lastname@example.org. This article was published by Black Press International.
Wednesday, April 12, 2006