Sheree R. Curry| USA TODAY Race In America magazine
Bank branches were battered and burned across America in 2020 following George Floyd’s death. Whether it was the Wells Fargo location on Walnut Street in Philadelphia’s City Center, the Chase Bank on Spring Street in downtown La Mesa, Calif., or the U.S. Bank Branch on East Lake Street in Minneapolis, rioters sent a firm message against systemic racism when they violated these buildings. In response: Banks are sending a message of their own: They are committed to these neighborhoods.
“So often, when tragic events happen, companies abandon communities of color and deem them to be either unsafe or not profitable, but our commitment is to the community,” says Greg Cunningham, U.S. Bank’s senior executive vice president and chief diversity officer.
U.S. Bank remodeled and reopened the three locations in Minneapolis that were destroyed during the civil unrest. “It was never a second thought about whether we rebuild or not,” Cunningham says.
Rebuilding goes beyond bricks and mortar. JPMorgan Chase & Co., the nation’s largest bank made a $30 billion “racial equity commitment” phased over five years “to provide economic opportunity to underserved communities.” Bank of America, PNC Bank and Citi independently pledged at least $1 billion over a period of two to five years toward diversity initiatives.
There are a number of ways those dollars are used to shrink the wealth gap for people of color, many of which sound similar to programs rolled out decades ago: Give to community investment projects; fund scholarships at historically Black colleges and universities (HBCU); improve access to financial literacy for Black and brown customers; and create a pathway for recruitment, retention and promotion of people of color through all ranks of the institutions.
This time, the big five banks – JPMorgan Chase, Bank of America, Wells Fargo, Citi and U.S. Bank – also pledged increased support to Black-owned banks. Wells Fargo announced in 2021 that it was investing in additional Black-owned banks, bringing its total to 13.
There are only 19 Black-owned banks remaining in the United States, according to the FDIC. In 1976, there were 50. The Federal Reserve Bank of St. Louis reports that Black-owned banks have substantial, positive impacts on their communities through mortgage and small-business loans.
Corporations outside the banking world are also pledging their support. Netflix made good on a June 2020 pledge to support Black-led financial institutions. By December 2021, it deposited $100 million into accounts at banks around the country, according to Netflix’s “Banking on Us” page.
Aflac, Costco, Dick’s Sporting Goods, PayPal and #BankBlack bandwagon. These companies are investing through the Black Economic Development Fund, which disburses the $250 million each gave through Black-owned banks and other Black-owned companies.
When First Independence Bank in Detroit sought to expand to other markets, Wells Fargo donated a Minneapolis facility , as well as an executive — Damon Jenkins. The Wells Fargo district manager was tapped to lead First Independence as senior vice president/Twin Cities regional market president. Four other financial institutions: Bank of America, Bremer Bank, Huntington Bank and U.S. Bank joined forces to bring First Independence to the city.
In April, First Independence became the only Black-owned bank in Minnesota.
The timing and location of the Minneapolis branch are befitting and deliberate. First Independence was born out of the 1967 Detroit riots — “a police brutality issue that led to days of unrest,” bank chairman and CEO Kenneth Kelly says, adding that he had “a little bit of déjà vu in 2020 when we saw this happening all over again on what I would consider an epic scale” with protests after Floyd’s murder.
When members of Minnesota’s banking sector were determining what to do after the protests, they spoke to Kelly. He says he suggested: “You’ve got to do something bold to show that you’re really meaning what you say you mean.” And out of that, “came the idea of looking at opening an African American bank in that market.”
Kelly adds that this collaboration was unprecedented. “You’ve never seen five major institutions who control 80 percent of the deposits in a market decide we’re going to bring a new competitor in. Egos were left at the door.
Reports from the FDIC reveal that Black-owned banks resonate in Black communities. They approve a higher percentage of loans, whether home mortgages or small-business financing, to people of color than mainstream banks.
Cunningham says he plans to open an account with First Independence, as does Dee DePass, a Twin Cities-based business journalist. “I know that deposits there help fuel loans to small businesses and specifically businesses owned by Blacks and other people of color,” DePass says.
“I don’t have gazillions of dollars, but maybe my little bit can pay it forward and help a small business or a struggling entrepreneur. I think that’s important.”
