The Congressional Black Caucus Foundation, kicking off its Annual Legislative Conference (ALC) with the theme, “It Starts With You,” this week is seeking to illustrate that theme through economic action.
The organization deposited $5 million into five Black-owned banks, continuing a national movement, fueled by the National Bankers Association, to reinvest in the community by supporting Black and minority-owned banks.
“Our $5 million investment is part of a new effort at the Foundation to strengthen the economy and Black communities. We saw a need and an opportunity to support much needed progress in economic recovery in African-American communities and we seized it,” said CBCF President/CEO Shuanise Washington.
“Today’s announcement is truly historic. This investment is a critical initiative in lifting the economic fortunes of African-American and minority communities. Historically and still today, minority and women-owned banks have been an important source of credit and accessible financial services. minority-owned banking is key to reaching unbanked, under banked and financially underserved African-American communities.”
Members of the Congressional Black Caucus have long pointed to the scourge of economic suffering and unemployment in Black communities as being among the chief issues across America. Two years ago, CBC members even held job fairs around the country, watching as African-Americans lined up around entire city blocks.
“The Foundation wants to set an example. And we think the best way to do that is not rhetorically but through action. And where we invest our money, we think will lay a pathway for others who want to follow and support the work of the Foundation,” said CBCF Chairman Chaka Fattah (D-Pa.). “So African-American financial institutions play an extraordinarily important role in the eco-system of the development of entrepreneurs in our communities; also to help families seeking to send a young person to college or a group of people who are trying to organize and develop a religious institution, a family trying to buy a home a get a mortgage, these institutions are vital.”
The five Black banks receiving $1 million each are The Industrial Bank in Washington, D.C.; Liberty Bank & Trust Company in New Orleans; Mechanics & Farmers Bank in Durham; Seaway Bank & Trust Company in Chicago and City National Bank of New Jersey in Newark.
The movement to reinvest in Black banks actually started in earnest last year when the U. S. Black Chamber of Commerce and the Washington, D.C.-based National Bankers Association, led by President/CEO Michael Grant, established a partnership to establish the Chamber’s primary account with Industrial.
Grant praised the CBCF for its historic vision of a world free of economic disparities “dating back to greats like Congressional Representatives Shirley Chisholm, Parren Mitchell, Louis Stokes, Charlie Rangel, John Conyers, Ron Dellums, and others.”
He quoted Dr. King, who, in his final days fought for economic justice.
“Dr. King was known for his prophecy. In closing, I would like to predict the future as well. If Black Americans will significantly increase their support of Black businesses, in a single generation, we would witness a drastic reduction in unemployment, an increase in high school graduation rates and a decline in crime in our neighborhoods,” Grant said.
The millions will go a long way in helping individuals in communities that have been hardest hit back the economic downturn says Doyle Mitchell, NBA chair and president/CEO of Industrial Bank, which will turn 80 next year.
“I have put the numbers together and I see now…Over 50 percent of our loans that we make go into underserved communities and nearly 80 percent of our loans go right here in Metropolitan Washington. According to the FDIC, small banks, community banks, make almost 50 percent of all small business loans. We know that small businesses in this country employ nearly 80 percent of the all the country’s individuals,” Mitchell says. “Most of the communities served by African-American banks are urban and disadvantaged. And while banks of other ethnic groups, Asians and Hispanics do an excellent job at that we do the same job right here in African-American communities.”
U. S. Black chamber President/CEO Ron Busby stressed the need for strong banks to undergird small businesses that in turn fuel the economy.
“When we surveyed our businesses, the common concern they all had was access to capital,” Busby said. “If the number one concern for our businesses is access then capital; then the number one concern for our businesses is unemployment. There are roughly two million African-American owned businesses in America and approximately 14 percent unemployment for African-Americans. The African-American unemployment rate in this country is almost double the national average. If we can grow our firms to where they have the capacity to employ just one additional employee, we can quell the high unemployment that plagues our community.”
The benefits of Black-owned banks – when they are profitable and supported within their own communities are extensive, expert say.
“Minority-Owned Banks – and specifically Black-owned Banks – are a foundational business in America’s
urban area,” says Dr. Russ Kashian, an economics professor at the University of Wisconsin-Whitewater, who participated in the press conference. “They serve several key roles. They provide banking services to areas that are often barren of any other mainstream banking services. They attract monies into the community through reasonably aggressive interest rates on CD’s. They are a source of valuable ‘jobs with ladders’ for the neighborhood – these jobs for tellers, loan officers, mortgage originators offer family wages and the opportunity for training and skill enrichment.”
President Obama has made it clear that support for the “middle class” is a key strategy to strengthen the economy. But, Washington says she hopes the move to strengthen Black banks will also “draw the traditionally unbanked poor into the mainstream economy.”
Fattah says he hopes other institutions will take heed to the example that has been set.
“The pillars of power have to be both political and economic,” he said. “And we are leaning forward to say that we’re going to make an investment and we expect that others who are our allies and our friends and support the foundation will follow likewise.”