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A young, black, professional, Spelman College and UNC Law grad, and new mommy who practices law in the Chicago suburbs.

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Banking While Black

April 10th, 2007 • Related • Filed Under

Young Black Professional Guide to Urban Trust BankA new Washington, D.C. bank is quickly climbing the financial institution ladder- and pulling black consumers up with it. Urban Trust Bank, which opened its headquarters branch at 14th and I streets NW in September, has nationwide plans focused on African-American customers. The federally chartered bank is owned by BET mogul Robert Johnson under his asset management and financial services firm, RLJ Companies. The bank’s mission is to “bring urban consumers into the financial mainstream, help them to become homeowners, to become entrepreneurs, and help them to create and maintain wealth in their neighborhoods.”

“Our plan is to establish a network of branches in urban areas to include communities that have limited access to banking facilities. We believe that this is a market that is underserved and we plan to deliver high quality products and services to these communities.” - Robert Johnson

Urban Trust Bank has $30 million in assets, offices in Washington and Orlando, and a federal charter under which it could expand to all 50 states. Johnson, who bought the bank a year ago, is talking with Wal-Mart about putting branches in stores around the country…’cause, you know, black people shop at Wal-Mart :-). But I won’t knock him for that- any good businessman knows his audience (and where they shop).

This new financial initiative is definitely not the first in the black community. The 1980’s saw a growth spurt for black businesses and back then Seaway National Bank of Chicago held the title of the nation’s largest black-owned commercial bank. After working there for a summer, I witnessed first hand how hard it was for a black bank to compete with larger financial institutions. But I am very proud of the progress Seaway has made (finally got on that internet banking bandwagon) and the support it has from local consumers- i.e. Common!

Currently, Carver Federal in New York, headed by Deborah Wright, is the nation’s largest publicly traded (NASDAQ) black-owned bank with $529.5 million in assets. They take deposits and lend back in the form of mortgage loans for purchase or refinance of residential, and commercial properties, and for construction or renovation of commercial property and residential housing developments. (It’s always good to know how your bank invests your money.)

Hopefully these banks will grow and dedicate their mission to wrapping their arms around minority communities. Low-income and minority communities are relatively untapped markets for banks, according to a study released last month by the National Community Reinvestment Coalition. Nearly 21% of all U.S. households do not have any relationship with banks, and countless other consumers have personal savings accounts but often resort to expensive payday loans, pawnshops and check-cashing services to get cash. YBPs, that’s called predatory lending, a soapbox I have a lot to say about but will save for another post…

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