Why Black Banks Need Policy Support, Not Just Deposits

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Campaigns to move money to black banks are helpful, in Baradaran’s view, but they are far from sufficient to address the racial wealth gap. In the most recent Federal Reserve estimates, the median net worth of white households is $171,000, while median net worth for black households is $17,600.

“It always comes back to raising capital,” says Doyle Mitchell, president and CEO of D.C.’s Industrial Bank, which his grandfather founded in 1934. “It’s the biggest challenge for black-owned businesses, period. Raising capital, trying to get to a scale where we can be more profitable.”

Bigger national or regional banks can attract capital from investors around the world. Community banks—the category of banks that most historically black banks fall into, because of their size and geographic focus—have a shallower pool to draw from.

Why Black Banks Need Policy Support, Not Just Deposits