Money Monday: Banking Black


How Supporting Minority Depository Institutions Can Help Close the Wealth Gap


Where do you deposit your money? I am sure your answer would probably include at least one of the big four banks such as J.P. Morgan Chase, Wells Fargo & Co, Bank of America and Citigroup. The role of banks is integral, not only to the financial sector, but almost every major financial decision. That said, would you consider keeping some of your money in a Minority Depository Institution?

Perhaps I should start with defining a Minority Depository Institution. A Minority Depository Institutions (MDI), also commonly referred to as a black-owned bank, has least 51 percent minority ownership, or the community bank services are mainly minority, and the majority of the board members are minority. The name Minority Depository Institution is a designation assigned to these banks by the Federal Deposit Insurance Corporation (FDIC).

Context and Perspective

The top four banks in America have combined assets exceeding 1.6 trillion while the assets in MDIs only exceed one billion. Black owned banks could have a greater impact in communities and for individuals they serve if they received more deposits and investments. But here is the larger point: Black owned banks assets are only more than one billion, in contrast to the black economy, which exceeds one trillion dollars. In other words, African American spending or consumer economy rivals the assets of the four largest banks in the country, while MDIs are under-resourced!

According to some accounts, black owned banks started as far back as 1888. Approximately, 130 banks came into existence between the years 1900 and 1934; with 88 of them coming into existence between 1900 and 1928. The tragedy is, according to a CNBC report in 2022, there are only approximately twenty FDIC regulated MDIs, which represents less than 1% of all FDIC banks.

Black owned banks provide services to minorities and people or business of every race color and creed. You don’t have to be black to invest in a MDI. As an example, Netflix already deposited and has pledged to deposit 100 million of its cash holdings into minority owned banks. But who are these banks?

How You Play a Role

The names of some of the largest minority owned banks are, City First Bank, Liberty Bank and Trust, Carver Federal Savings Bank, Citizens Trust Bank, One United Bank, Industrial Bank and the Harbor Bank of Maryland to name a few. These banks may not be located in your neighborhood, however, minority banks offer online services and online banking.

The role they play is almost indispensable when you consider financing challenges many face. Those whose credit and other circumstances may not be ideal need these institutions as they attempt to pursue the American dream.  MDIs can help when obtaining mortgages, auto-loans, credit cards, entrepreneurship and student loans. Are you going to invest in Minority Depository Institutions and help close the racial wealth gap?


WHAT’S UP! Today’s what’s up is about junk fees. If the Consumer Financial Protection Bureau and the Biden Administration get their way, bank overdraft and bounced check fees will be a thing of the past. Paying these fees would also be eliminated when applied to certain industries such as telecommunications, hospitality and travel. Stay tuned for those changes. And that’s what’s up!





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