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Everyone deserves a safe and supportive place to keep, use, and grow their money. There's a huge imbalance of wealth in the U.S., and Black-owned banks play an important role in balancing the scales a bit.
Here, we'll touch on the history of racism in banking and talk about how the best Black-owned banks have become a source of hope in the Black community.
OneUnited Bank Black Wall Street Checking
OneUnited Bank is the nation’s largest black-owned FDIC-insured bank with offices located in California, Florida, and Massachusetts. It is a designated Community Development Financial Institution (CDFI) that serves low to moderate income communities. OneUnited Bank has the nation’s largest surcharge-free ATM network with over 100,000 ATMs. Its ATM fee-free “Empowerment Network” includes retailers such as 7-11, Walgreens, CVS, Target, Costco, and more. Its debit card has an AutoSave Program where your transactions are rounded and automatically moved to your savings accounts. It also offers two-day early pay where you have access to your direct deposit. The bank also has launched a national OneTransaction podcast to make financial literacy a core value in the Black community.
Carver Federal Savings Bank Community Free Checking
This is a solid account from a community-minded bank. You can get better interest rates elsewhere, but this isn't a bad option if you prefer a smaller bank and live near one of its limited number of branches in the New York City area.
Liberty Bank Personal Checking
Liberty Bank is a Black-owned financial institution with its headquarters in Louisiana, and in the past 20 years expanded into eight additional states. Liberty offers services for individuals, businesses, and institutional clients, delivering financial products and services to diverse markets with a focus on disadvantaged minority communities who have traditionally been underserved. It has high service fees for its accounts if you don’t meet the daily minimum, but it offers unlimited check writing.
Industrial Bank Kasasa Cash Account
No monthly fees
Free access to 50,000 ATMs
ATM reimbursments
$35 overdraft fee
Required debit card purchases
APY cap
This bank offers some nice perks, but the user has to earn them. It requires debit card purchases, online banking, and electronic statements. The ATM reimbursement is also capped at $25 per month. You also can't earn the APY on anything more than $15,000. This account can certainly fill a need, but there are better options out there.
GN Bank Personal Checking
Citizens Savings Bank Foundation Checking
Make sure you're getting the best account for you by comparing savings rates and promotions. Here are some of our favorite high-yield savings accounts to consider.
How did we decide which Black-owned banks to recommend on this page, you ask? Here's the thing: We at The Ascent only recommend Black-owned banks we'd pass along to our brothers, sisters, and mothers. Big banks can't pay to play ball, and we'd be bummed if they did -- we recommend these Black-owned banks to family members who ask. (And sometimes when they don't. We wouldn't wish crummy banks upon anyone -- no, not even that guy.)
Black families have been in this country for more than 400 years. And yet, Black people hold a fraction of the wealth held by white families. According to the Institute of Policy Studies, 37% of Black families in the U.S. have zero or negative wealth, meaning their debts are equal to or greater than their assets. The same is true of 15.5% of white families.
While we all know of wealthy Black celebrities, athletes, and business owners, financial success has been tough to achieve for the majority of Black Americans. And it can easily be traced back to a culture that finds ways to prevent Black families from building wealth.
For example, if a society can find subtle ways to deny housing loans, it can steer Black people toward certain areas of town. And if those areas have poorly performing schools, it's harder for Black children to get the education they need to succeed in a competitive workplace. It's a systemic cycle designed to keep people in poverty and unable to take their rightful place at the table.
If you've ever bounced a check or been late with a payment, you know how easy it is to make a mistake. And if there's a flag next to your name in ChexSystems or some other check verification service, you may have trouble opening a bank account the next time you move.
For years, Black people have been barred from opening bank accounts because they had a negative experience in the past that shows up on ChexSystems. It could be anything from overdrafts to suspected fraud or identity theft. This has prevented untold numbers of Black people from banking with a traditional bank or credit union.
Here are a few disadvantages of not being able to access banking services:
For some seeking a financial institution, a Black-owned bank is necessary. They want to know that the people who run the bank understand what it's like to live in Black America, to have trouble qualifying for a credit card, or to get ahead enough to build a savings account balance. They want to walk into a branch location and know they are welcome there and have access to second-chance banking and overdraft protection. For some, only a minority depository institution can provide what they're looking for.
To illustrate the history of racism in banking, here is an overview of the rise and fall of the Freedman's Savings Bank, according to information from the Office of the Comptroller of the Currency.
In 1865, the Civil War ended and the 13th Amendment abolished slavery. Around that time, Congress acknowledged that Black people would need education, financial services, and capital.
The Freedman's Savings Bank was established in March 1865 to provide Black people with the same types of banking services formerly reserved for white men. But, as explained by author Shawn Rochester, Freedman's Savings Bank may have been marketed as a Black bank, but it was run by white managers. They controlled around $3 million from 61,000 Black depositors, and they made risky investments with those funds.
The bank appeared to grow quickly, but not quickly enough to pay for overexpansion. Plus, a shaky postwar economy led to a financial crisis known as the Panic of 1873, which further reduced the bank's investment portfolio.
By 1874, managers had wiped out all deposits, and Freedman's Bank collapsed. While the government promised to return some of the lost funds to customers, most received nothing -- or pennies on the dollar. This is just one example of why Black Americans have lost faith in the banking system. And many are unwilling to trust their hard-earned money to an institution that does not look out for them.
If you're interested in helping the Black community (no matter your skin color), one way you can do it is by becoming a customer.
Here are just a few of the services Black-owned banks offer:
If you're not Black, it's not a problem. Black-owned banks do not discriminate.
To find the right bank for you, take the following steps:
Some Black-owned banks have branches, while others allow you to bank entirely online. That means if the bank you're interested in joining is based in North Carolina but you live in another state,you can still become a bank customer. One of the advantages of having online access to your bank is that you can take it with you. You don't have to worry about there being a branch wherever you go.
Our methodology for scoring banks and credit unions revolves around evaluating key aspects such as annual percentage yield (APY), brand reputation, fees and minimum requirements, and additional perks.
These criteria are weighted differently across various account types, ensuring a comprehensive assessment that reflects the competitive landscape and economic conditions.
We strictly feature products that offer federal insurance and high customer satisfaction, keeping our recommendations unbiased by advertiser influence. This robust evaluation process helps us generate balanced, reliable best-of lists that guide consumers to top financial products.
Learn more about how The Motley Fool Ascent rates bank accounts.
OneUnited is the largest Black-owned bank in the U.S. It is also FDIC insured and initially launched in 1968.
Call and ask. It's as simple as that. They'll tell you who owns the bank. You can also check bank websites to see who runs the company.
Our Banking Experts
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent, a Motley Fool service, does not cover all offers on the market. The Ascent has a dedicated team of editors and analysts focused on personal finance, and they follow the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.