Black-owned banks and credit unions have played an important role in supporting Black communities throughout history, and they continue to do so today. Despite facing decades of exclusion and discriminatory practices, these financial institutions persist in improving access to bank accounts and financing in traditionally underserved communities.
In recent years, Black-owned banks have enjoyed rising support from the general public, major corporations, and even other banks. For example, since 2020, Bank of America, Wells Fargo, and JP Morgan Chase have all publicly committed millions of dollars in financial support and investment to Black-owned financial institutions, as have Netflix, Paypal, and Microsoft.
Here’s a closer look at the history of Black-owned financial institutions, the challenges they’ve faced, and the unique benefits they offer their communities. To help you #BankBlack, we’ve compiled a list of Black-owned banks and credit unions, including the states they serve and their number of branches, near the bottom of this article.
- While there used to be many more Black-owned banks, they were disproportionately affected by the 2008 financial crisis. More than half of the Black-owned banks in the U.S. shut down between 2007 and 2019.
- Systemic racism and widespread racist practices, such as redlining, have historically weakened Black-owned banks’ financial positions, making it harder for them to withstand major shocks.
- Despite those historic challenges, the future looks bright for many Black-owned financial institutions, thanks in part to digital innovations, new technological opportunities, and increasing support and investment.
What Are Black-Owned Banks?
Black-owned banks and credit unions are federally insured depository institutions that serve customers from all racial and ethnic backgrounds but are largely owned or directed by Black Americans.
Black-owned banks are included in the FDIC's Minority Depository Institution (MDI) Program, which seeks to preserve and promote MDIs. To qualify as an MDI, at least 51% of the bank's voting stock must belong to shareholders who are Black, Asian American, Hispanic, or Native American. An institution can also be considered if the majority of its board of directors are members of these minorities and it serves a predominantly minority community.
The FDIC maintains a list of MDIs, which it further subdivides by race and ethnicity. As of the most recent update in February 2022, which includes data from Dec. 31, 2021, there were 143 MDIs, including 19 Black-owned banks.
Like all credit unions in the U.S., Black-owned credit unions are regulated by the National Credit Union Administration (NCUA). The NCUA’s definition of MDI is slightly different from the FDIC’s. To qualify as an MDI, the majority of a credit union’s membership, board of directors, and community must belong to the minority groups listed above, which are defined by the Financial Institutions Reform, Recovery and Enforcement Act of 1989.
Why Are Black-Owned Banks Important?
Black-owned banks have historically served communities that were otherwise overlooked or shut out by other financial institutions. In addition, Black-owned banks offer support to entrepreneurs and lower-income Black Americans who have been historically less likely to open accounts or borrow money from mainstream, often White, financial institutions—or outright prevented from doing so.
Many Black-owned banks are recognized as federal MDIs and/or Community Development Financial Institutions (CDFIs), which prioritize the needs of the underserved communities in which they are based.
A Brief History of Black-Owned Banks
Black-owned banks have a long and often painful history, dating back to the mid-19th century, when the first bank committed to serving Black Americans opened. The Freedman's Savings Bank, once seen as a beacon of hope for formerly enslaved people, failed after less than a decade—causing more than 60,000 Black people to lose their savings, which would add up to $65 million in today’s dollars.
Many historians blame the bank's failure on its mostly White administrators, who engaged in speculation and corrupt behavior; for example, one trustee used the bank’s assets to benefit his own family business. The bank’s failure, and the poor oversight that enabled it, helped seed profound distrust among many Black Americans toward the safety and reliability of mainstream financial institutions.
Even today, Black adults are significantly less likely than White adults to hold bank accounts, a factor that contributes to the racial wealth gap.
The first bank founded and run by Black Americans opened in 1888, and by the beginning of the Great Depression, more than 130 Black-owned financial institutions were operating across the country. “The motivation to create many Black banks [...] was rarely a purely financial endeavor or business opportunity,” wrote Esther George, president of the Federal Reserve Bank of Kansas City, in the foreword to “A Great Moral and Social Force,” a book about the history of Black-owned banks. “Instead, many were created with a primary mission of public service.”
However, the Great Depression decimated the number of Black-owned financial institutions. In addition, discriminatory practices once deemed legal sapped the wealth-building capabilities of the banks’ customers. As University of California-Irvine Law Professor Mehsra Baradaran noted in her book, "The Color of Money," Black-owned banks have historically served a customer base whose own financial resources and prospects have been repeatedly hamstrung by centuries of racist policies and practices toward Black Americans, including decades of overt housing discrimination and deliberate exclusion from financial and social resources.
For example, by the mid-1930s, the Home Owners Loan Corporation and the Federal Housing Administration had introduced discriminatory lending practices known as redlining, in which they defined certain areas and neighborhoods as “higher-risk”—thinly veiled racism based on the race and ethnicity of the community’s residents. These practices made it easier for mainstream lenders to avoid issuing mortgages to Black Americans, preventing them from buying homes and beginning to accumulate wealth.
While the Fair Housing Act of 1968 and the Home Mortgage Disclosure Act of 1975 prohibited redlining, its effects persist today in the racial homeownership gap: In December 2021, the homeownership rate for Black Americans was 43% compared with 74% for White Americans.
The number of Black-owned banks declined through the 1980s and 1990s. The 2008 financial crisis was particularly devastating: More than half of Black-owned banks in the U.S. closed their doors between 2007 and 2019. Today, they make up just 0.4% of the 4,377 insured banks in the U.S.
Why Has the Number of Black-Owned Banks Declined?
Black-owned banks have struggled to respond to economic shocks due to their smaller size and limited assets. “As of the second quarter of 2021, Black-owned banks held about $6 billion in total combined assets, as compared to over $22 trillion in total assets in the U.S. banking system as a whole,” testified Robert James II, chairman of the National Bankers Association, before the Senate Banking Subcommittee on Financial Institutions and Consumer Protections in February 2022. “Put another way, Black-owned banks only control 27 thousandths of 1% of total bank assets in the United States.”
Most loans issued by MDIs, including Black-owned banks, are secured by real estate, such as mortgages, James told the Senate subcommittee. “The legacy of redlining and associated chronic undervaluing of real estate in Black communities created lower asset values for minority banks’ collateral, which led to massive write-downs of bank collateral.” This collateral is essential in allowing banks to grow, receive more deposits, and withstand loan losses and defaults, which increased sharply during the 2008 financial crisis. “Without access to capital markets or large pools of high-net-worth investors, many Black MDIs were forced to exhaust their capital reserves, failing as a result,” said James.
What Does the Future Hold for Black-Owned Banks?
Increasing support for Black-owned banks has many financial leaders feeling optimistic about the future. The viral #BankBlack movement launched by rapper Killer Mike in 2016 inspired many people and organizations to move their money to Black-owned financial institutions, boosting their assets.The calls were renewed and intensified in 2020, during social justice protests after the killings of Ahmaud Arbery, George Floyd, and Breonna Taylor. One Black-owned bank in North Carolina saw a 20% jump in deposits in 2020, its president told public radio station WBUR. Netflix pledged to move $100 million in deposits into Black-run financial institutions, and Microsoft committed to investing $100 million in MDIs, focusing on Black-owned banks.
Today, there are 19 FDIC-approved Black-owned banks.The most recent change to the number occurred in October 2021, when Liberty Bank acquired Tri-State Bank of Memphis.Because banks and credit unions have important differences, we’ve opted to split them into two separate tables, so you’ll find a list of credit unions further down.
Some branches are temporarily closed due to COVID-19. However, most of these financial institutions offer online banking, so they’re available to customers nationwide.
|Name||Assets||States||Number of Branches|
|Carver Bank||$723,256,000||New Jersey, New York||7|
|Carver State Bank||$61,954,000||Georgia||2|
|Citizens Savings Bank and Trust||$134,538,000||Tennessee||2|
|Citizens Trust Bank||$668,803,000||Alabama, Georgia||7|
|City First Bank||$1,092,804,000||California, Washington, DC||3|
|Columbia Savings & Loan Association||$26,945,000||Wisconsin||1|
|Commonwealth National Bank||$56,890,000||Alabama||2|
|First Independence Bank||$412,314,000||Michigan||2|
|First Security Bank & Trust Co.||$61,252,000||Iowa||13|
|The Harbor Bank of Maryland||$329,750,000||Maryland||6|
|Industrial Bank||$625,437,000||Maryland, New Jersey, New York, Washington, DC||7|
|Liberty Bank||$971,090,000||Alabama, Illinois, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Tennessee||16|
|M&F Bank||$365,178,000||North Carolina||7|
|OneUnited Bank||$643,447,000||California, Florida, Massachusetts||6|
|Optus Bank||$315,458,000||South Carolina||1|
|United Bank of Philadelphia||$64,379,000||Pennsylvania||2|
|Unity National Bank||$253,823,000||Georgia, Texas||3|
Black-Owned Credit Unions
While the NCUA counts more than 250 Black-owned credit unions as part of its MDI Preservation Program, we’ve opted to list the 30 largest here, based on their assets as of Sept. 30, 2021.
To join a credit union, you must typically meet membership criteria, such as living or working in a specific county or being employed by a city, state, or federal government.
|Name||Assets||States||Number of Branches|
|1st Choice Credit Union||$36,846,886||Georgia||1|
|A.B.D. Credit Union||$78,344,458||Illinois, Michigan||3|
|Andrews Federal Credit Union||$2,207,140,061||Maryland, New Jersey, Virginia, Washington, DC||15 total, 10 of which are in the U.S.|
|Credit Union of Atlanta||$87,199,883||Georgia||2|
|Credit Union of Richmond||$73,506,092||Virginia||1|
|DC Teachers' Federal Credit Union||$49,188,660||Washington, DC||2|
|Democracy Federal Credit Union||$176,352,515||Pennsylvania, Virginia, Washington, DC||5|
|Department of Labor Federal Credit Union||$111,619,769||Washington, DC||2|
|GPO FCU||$32,933,396||Washington, DC||1|
|Gulf Coast Federal Credit Union||$51,766,425||Texas||4|
|Hope Credit Union||$424,377,548||Alabama, Arkansas, Louisiana, Mississippi, Tennessee||23|
|HUD Federal Credit Union||$52,832,773||Washington, DC||1|
|Jackson Area Federal Credit Union||$104,598,039||Mississippi||2|
|Kansas City Credit Union||$49,513,230||Missouri||3|
|MECU Credit Union||$1,340,636,481||Maryland||9|
|Meridian Mutual Federal Credit Union||$55,118,728||Mississippi||1|
|Mississippi Public Employees Credit Union||$30,982,886||Mississippi||1|
|Palmetto Health||$92,944,355||South Carolina||4|
|Pee Dee Federal Credit Union||$40,096,399||South Carolina||1|
|Port Arthur Teachers Federal Credit Union||$37,312,854||Texas||1|
|Savannah Schools Federal Credit Union||$40,981,052||Georgia||2|
|SecurityPlus Federal Credit Union||$477,537,739||Maryland||6|
|SMSE Credit Union||$48,651,400||Michigan||1|
|Southern Teachers and Parents Federal Credit Union||$32,472,764||Louisiana||2|
|St. Louis Community Credit Union||$395,573,387||Missouri||16|
|Texans Credit Union||$61,856,343||Texas||11|
|Toledo Metro Credit Union||$56,619,991||Ohio||1|
|Transit Employees Federal Credit Union||$105,867,529||Virginia, Washington, DC||2|
|WSSC Federal Credit Union||$35,470,383||Maryland||2|
Frequently Asked Questions (FAQs)
What is the largest Black-owned bank?
The answer depends on how you measure a bank's size. City First Bank became the richest Black-owned bank after merging with Broadway Federal Bank in the spring of 2021. A Community Development Financial Institution (CDFI) and Certified B Corp, City First Bank boasts more than $1 billion in assets and more than $700 million in deposits.
However, the nationwide bank OneUnited—also a Community Development Financial Institution—is still frequently cited as the country's biggest Black-owned bank based on the number of customers it serves. It also markets itself as the nation's first Black internet bank.
How many Black-owned banks are in America?
As of February 2022, there are 19 FDIC-insured Black-owned banks in the U.S. The most recent change to the number of Black-owned banks occurred in October 2021, when Liberty Bank acquired Tri-State Bank of Memphis.
Why have some Black-owned banks failed?
Bank failures are complex and can occur for a variety of reasons, including a decline in resources and capital or challenges in the operating environment. Black-owned banks have historically faced unique headwinds that have made it much more difficult for them to profitably hold deposits and lend money. For example, Black-owned banks have historically served a customer base whose own financial resources and prospects have been repeatedly limited by centuries of racist policies and practices, including decades of overt housing discrimination and deliberate exclusion from financial and social resources.
In addition, many Black-owned banks have seen their own wealth-building opportunities undercut by social, environmental, and structural challenges, including local and federal policies that have uniquely disadvantaged minority-owned financial institutions.
Federal Deposit Insurance Corporation (FDIC). “Investing in the Future of Mission-Driven Banks: A Guide to Facilitating New Partnerships.”
FDIC. “Minority Depository Institutions List,” See “MDI Lists” for downloadable Excel files.
National Credit Union Administration. “Minority Depository Institution Preservation,” See “Qualifying as a Minority Depository Institution.”
Independent Community Bankers of America. “Why We Need Black-Owned Banks.”
Office of the Comptroller of the Currency (OCC). “Community Development Financial Institution (CDFI) and Community Development (CD) Bank Resource Directory.”
Federal Reserve Bank of St. Louis. “Black-Owned Banks and the Communities They Serve,” see “Black Communities and Banking Mistrust.”
Charles Gerena. “Economic History: Opening the Vault.”
Federal Reserve Bank of Kansas City. “Foreword: A Great Moral and Social Force.”
Mehsra Baradaran. “The Color of Money: Black Banks and the Racial Wealth Gap.”
U.S. Census Bureau. “Quarterly Residential Vacancies and Homeownership, Fourth Quarter 2021,” See Table 7.
Federal Reserve Bank of St. Louis. “Black-Owned Banks and the Communities They Serve,” see “The Potential for Change.”
Senate Banking Subcommittee on Financial Institutions and Consumer Protection. “Testimony of Robert James II, Chairman of the National Bankers Association: The Role that Community Development Financial Institutions and Minority Depository Institutions Serve in Supporting Communities.” Given Feb. 9, 2022.
Microsoft. “Addressing Racial Injustice,” See “Our Ecosystem.”
Liberty Bank. “Tri-State Bank of Memphis Merged With Liberty Bank and Trust Co.”
City First Bank. “CityFirst. Finance as a Force for Good.”
OneUnited Bank. “Why OneUnited?”