Adrienne Baker, Vice President/Senior Commercial Loan Officer at Seaway Bank, speaks to the press about the bank's new account initiatives.

Adrienne Baker, Vice President/Senior Commercial Loan Officer at Seaway Bank, speaks to the press about the bank’s new account initiatives.


As the importance of Black banks comes back into the spotlight, seeing the bigger picture is essential, an expert says.

The long-term benefit is protecting and building the Black community’s financial interests, according to William Michael Cunningham, an economist and impact investing specialist at Creative Investment Research. If there are no more Black-owned banks, he says, Blacks will lose power, and that past instances show how certain groups can be targeted for profit.

“I would tell [anyone who questions the importance of Black banks] to think about the recent financial crisis and how a lot of the large, non-minority financial institutions did not represent or protect their financial interests,” Cunningham said. “They put a lot of them, their neighbors, friends, and family members into loans that were inappropriate.”

During the Great Recession, a disproportionate number of Black Americans were advised to take out mortgages that they could not afford to pay off. Federal Reserve studies show that there were more subprime loans in low-income areas in which unemployment rates were high.

Wells Fargo — the largest home mortgage lender in the U.S. — eventually settled a discrimination suit in Baltimore in 2012 after the city alleged it targeted minorities, and just this year, it agreed to pay the U.S. government $1.2 billion for hiding bad loans. Being at the mercy of these banks, Cunningham says, is not ideal for the community.

If we’re in trouble without Black banks, then the situation is becoming a serious one. In 1994, the U.S. had 55 Black-owned banks compared to today’s 23. The number of Black banks in Chicago dropped from 6 to two during that period. Only Seaway Bank and Trust Company and Illinois –Service Federal Savings and Loans.

Illinois–Service Federal Savings and Loans is one of two Black-owned banks remaining in Chicago.

Illinois–Service Federal Savings and Loans is one of two Black-owned banks remaining in Chicago.


Recent police brutality cases brought along a surge in new accounts at Black banks across the country to build up Black buying power and banks like Seaway saw a surge. In July, 574 new accounts were opened at Seaway, which brought in $2 million in deposits. It was the most the bank ever received in a single month. Bank officials are hoping that the momentum continues.

“One of the reasons Chicago is important, because of the long history that Chicago has had with the strong Black middle class out of Chicago,” Cunningham said. “Chicago had more Black banks than any other major city back in 1994. You had Black disposable income, strong Black wages, and strong Black employment in Chicago.”

Those Black banks mean inclusion and representation, Cunningham says.

“We’d be pretty much shut out and at the mercy of others to represent our financial interests within this global community,” he said. “So, there might be things that are culturally specific to our community are going to go unknown and unrecognized in the broader community.”

Culturally-specific understanding can support small business lending and generate employment.

Cunningham uses this as an example: if a Black person requested a business loan from a majority bank in the 1980s to buy turntables, it would likely not work out. But, a Black bank, with representatives that know of Run DMC and the potential of hip-hop culture would know that his loan request was valid.

“If you don’t have that hook into the culture, it’s going to sound silly,” he said.

That connection to your needs is why Cunningham recommends that every Black person opens up an account at a bank “run by people who look like you and where you have the expectation that they will look out for or at least be sensitive to both your issues and your culture.”

This need is increasingly important for Blacks who are unbanked (not using any financial institution) or underbanked and (using mostly check cashers). For Black America, these percentages lie around 21 and 33 percent, respectively, according to Federal Deposit Insurance Corporation.

Cunningham says staying away from check cashing companies is a way to keep money circulating within the community.

“Another thing that a lot of Black people know is that so many check cashers and all of these other vampires are in our community is because they’re making money,” Cunningham said. “They wouldn’t be there if they weren’t. So, they are after that $1.2 trillion in spending power, and this is another way that spending power is siphoned out of the Black community. You have to have a long-term perspective.”

William Michael Cunningham, economist and impact investing specialist at Creative Investment Research

William Michael Cunningham, economist and impact investing specialist at Creative Investment Research

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