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According to the Federal Reserve, Black people are two times more likely to be denied credit than their white counterparts—regardless of income level. This discriminatory practice, also known as redlining, has contributed to disparities in wealth between Black and white households.
To combat this inequality, Black-owned banks have emerged across the U.S., providing economic security for disenfranchised Black communities that have long been underserved by financial institutions.
How Many Black-Owned Banks Are There in America?
According to FDIC data, only 23 out of 5,400 insured financial institutions in the United States were owned and operated by Black people as of 2018.
The number of Black-owned banks in America has declined over the past two decades, decreasing by more than 50% from 2001 to 2018. The 2008 financial crisis was particularly damaging to the income level and employment rate of Black Americans and led to the dwindling of Black-owned banks.
Black-owned banks have far fewer assets at their disposal than major players in the banking industry. OneUnited, the largest Black-owned bank in the U.S., manages around $625 million in assets. In comparison, Bank of America manages nearly $2.5 trillion.
Who Owned the First Black Bank?
Rev. William Washington Browne, a former slave and Union Army officer from Georgia, founded the first Black-owned bank in America—True Reformers Bank—on March 2, 1888. The name of the bank was inspired by the Grand Fountain United Order of True Reformers, a Black fraternal organization established by Browne.
Browne formed True Reformers Bank when his fraternal organization encountered problems while attempting to establish a local branch in Virginia. The branch arranged to keep its savings in the safe of a white storekeeper. However, with racial tensions running high after a lynching in Charlotte County, white locals were suspicious and paranoid about what the organization planned to do with the funds.
To avoid having the organization’s finances managed and scrutinized by white people, Browne decided to open a bank serving Black customers in Richmond, Virginia. After his death in 1897, the bank continued to thrive and operate in over 20 states.
However, problems arose when the bank’s new president, Rev. William Lee Taylor, failed to manage and regulate each branch properly. In 1910, Virginia’s State Corporation Commission officially ordered the closure of True Reformers Bank.
What Makes a Bank Black-Owned?
Black-owned banks are depository institutions where Black people own 51% or more of the stock. These financial institutions are typically located in communities of color and provide a source of local economic support.
Black-owned banks typically focus on lending to Black homeowners, small businesses and nonprofit organizations like churches. And though these banks focus predominantly on Black communities, non-Black individuals and companies are welcome to become customers. Opening an account with a Black-owned bank as an ally can be a great way to support its mission of closing the wealth gap in America.
Why Switch to a Black-Owned Bank?
Black-owned banks work to provide fair and equal services and uplift Black businesses, homeowners and entrepreneurs in ways that major white-owned banks are often unable to. By depositing funds in Black-owned banks, you empower them to lend more funds to African American-owned businesses, further creating opportunities for employment, mentorship and educational advancement in the Black community.
By switching to a Black-owned bank, you help level the playing field for Black consumers who have been underserved by financial institutions and continue to lag behind other segments of the population. The median white family in the U.S. had 7.8 times the wealth of the typical Black family as of 2019: $188,000 compared to $24,100, according to the Brookings Institution.
List of Black-Owned Banks by State
We compiled a list of Black-owned banks across the U.S. so you can support these financial institutions and help build wealth within the African American community. Note that not every state has a Black-owned bank with physical branch locations.
Alabama
- Alamerica Bank
- Citizens Trust Bank
- Commonwealth National Bank
Arkansas
- Hope Credit Union
California
- Broadway Federal Bank
District of Columbia
- Phi Beta Sigma Federal Credit Union
- Howard University Employees Federal Credit Union
- City First Bank
Florida
- FAMU Federal Credit Union
Georgia
- Carver State Bank
- Omega Psi Phi Fraternity Federal Credit Union
Illinois
- GN Bank
Indiana
- Mount Zion Indianapolis Credit Union
Kansas
- Liberty Bank
Kentucky
- Liberty Bank
Louisiana
- Southern Teachers & Parents Federal Credit Union
Maryland
- Harbor Bank of Maryland
- Municipal Employees Credit Union of Baltimore
- Andrews Federal Credit Union
- Democracy Federal Credit Union
- Industrial Bank
Massachusetts
- OneUnited Bank
Michigan
- First Independence Bank
- Liberty Bank
Minnesota
- First Independence Bank
Mississippi
- Jackson Area Federal Credit Union
- Hope Credit Union
- Liberty Bank
Missouri
- St. Louis Community Credit Union
Montana
- City First Bank
New Jersey
- Messiah Baptist Church Federal Credit Union
- Andrews Federal Credit Union
- Industrial Bank
New York
- Carver Bank
- Urban Upbound Federal Credit Union
- Industrial Bank
North Carolina
- Mechanics & Farmers Bank
- Greater Kinston Credit Union
Ohio
- Adelphi Bank
- Toledo Metro Credit Union
- Toledo Urban Federal Credit Union
Oklahoma
- First Security Bank and Trust Company
Pennsylvania
- United Bank of Philadelphia
- Hill District Federal Credit Union
South Carolina
- Optus Bank
- Palmetto Health Credit Union
- Brookland Federal Credit Union
Tennessee
- Citizens Bank
- Hope Credit Union
- Liberty Credit Union
Texas
- Unity National Bank
- Faith Cooperative Credit Union
- Mount Olive Baptist Church Federal Credit Union
- Oak Cliff Christian Federal Credit Union
Virginia
- Virginia State University Federal Credit Union
- Andrews Federal Credit Union
- Democracy Federal Credit Union
- Transit Employees Federal Credit Union
Wisconsin
- Columbia Savings and Loan Association
Find The Best Online Banks Of 2024
Learn More
Black-Owned Online Banks
Black-owned online banks offer similar benefits to traditional brick-and-mortar financial institutions and are available to Americans nationwide. Open an account with an online Black-owned bank if you can’t find a brick-and-mortar bank in your area.
Be sure to perform your due diligence and comparison shop to find the best option for your needs.
