Hitting the Money Spot: Creating Black Generational Wealth

 

Creating Black Generational Wealth

The history of Black people and money is a history filled with trauma and terror. If you want to know more about this history, please read the blog Black in Money Recovery. This blog focuses on awareness, acceptance and action as well, but from a behavioral perspective. Byron Allen states that Black people need access to capital which means a strong working relationship with banks.

The First Black Bank was established after the Civil War to serve the needs of the newly freed African Americans. The first Black bank was the Freedman’s Bank established on March 3, 1865. The bank faltered in 1874 and instead of the Federal Government shoring up the bank as it did many times for  banks that benefitted the White community, the all White Board decided to shut the bank down. The records which were kept and the idea of Black financial institutions serving the Black community had been planted and would live to grow again.

 

Black leaders  have advocated for Black banks to serve the needs of the Black Community  since  Emancipation. Most leaders recognized that Blacks would not have access to capital to grow business and achieve financial wellness in non-Black Banks  due to racism. Investing in the Black Community has been perceived as a poor risk for Blacks but not for others. The  Civil rights reforms of the 1960s and 1970’s were needed because systematic racism was proved to exist between the banks, insurance companies and real estate agents . 

 

Banks operated by Black people  help the Black community  build wealth, unimpeded by the prejudice and suspicion of white bankers. Black ownership would further ensure that profits made off of Black money would stay in the community.  Black banks  extend credit to borrowers that the big national banks may perceive as too risky owing to their modest means. Dr. Martin Luther King Jr. stated in the March on Washington that Black people lived on an Island of Poverty in the midst of an ocean of prosperity. Five years later  right before his assassination he encouraged Black people  to pull their money “out of the banks downtown” and deposit it in a Black-owned bank. “We want a ‘bank-in’ movement,” he said.

 

Dr. King stated that America had given Black people “a bad check”. 53 years later some banks are attempting to make that check cashable. One United Bank and Greenwood bank seemed to have taken the lead. There are a number of Black owned banks that are reaching out to the Black community. Many of the Black Credit Unions are building and investing in the Black Community. Some of the major players in the social media market are moving to put their funds in Black banks in order to support Black customers. The goal is to educate Black people regarding access to Capital to build the Black community.