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Showing posts with the label black banks

The Problem with OneUnited and #BankBlack

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According to the New York Times,

"WASHINGTON — Top banking regulators were taken aback..when a California congresswoman helped set up a meeting in which the chief executive of a bank with financial ties to her family asked them for up to $50 million in special bailout funds, Treasury officials said.

Representative Maxine Waters, Democrat of California, requested the September meeting on behalf of executives at OneUnited, one of the nation’s largest black-owned banks. Ms. Water’s husband, Sidney Williams, had served on the bank’s board of directors until early last year and has owned at least $250,000 in stock in the institution. Treasury officials said the session with nearly a dozen senior banking regulators had been intended to allow minority-owned banks and their trade association to discuss the losses they had incurred from the federal takeover of Fannie Mae and Freddie Mac. But Kevin Cohee, OneUnited’s chief executive, instead seized the opportunity to plead for special as…

Crisis - The Current State of Black Banking

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Our Webinar will cover:

1. History: Black Banking in the 80's, 90's and 00's.
2. Rationale: Why Black banks?
3. Customers: The Demographics of Black Banking.
4. Market: The Market for Black Banks.
5. Crisis: The Financial Crisis and Black Banks.
6. Opportunities: The OMWI initiative and Black Banks.
7. What to do now: Why campaigns to get minorities and other consumers in the urban areas to bank with minority banks have not worked. What will work.
8. Future: Which Black Banks will survive and why?
9. Next Steps.
WHEN
Wednesday, August 24, 2016 from 4:00 PM to 6:00 PM (EDT

To RSVP: Crisis: State of Black Banking

African American-owned bank get $1M deposit

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On Black Banks

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I saw an article recently on Black banks in the US that was filled with inaccuracies. It was a public relations piece for the banking industry, so I thought I would post something based on my 20 years of research experience in the sector.

1. What is the historical significance of Black banks?

They were created at a time when discrimination against Black peoplewas legal in the US. They served as the only financial serviceproviders to the community.

2. Do Black banks have the same level of significance to the Black community today? Why or why not?

No. They are too small to serve the community in any meaningful way. For example, they cannot serve as a line of defense against predatory lending. The result: banks like Wells Fargo are free to target black communities for shoddy loanshttp://www.washingtonpost.com/business/economy/former-wells-fargo-loan-officer-testifies-in-baltimore-mortgage-lawsuit/2012/06/12/gJQA6EGtXV_story.html

Some Black banks were trying to help: See:
http://twisri.blogsp…

Federal agency orders Ideal Federal Bank to find a buyer

From the Baltimore Sun, March 11, 2010 by Jamie Smith Hopkins

"Ideal Federal Savings Bank has until March 31 to find a buyer, a deadline set by the Office of Thrift Supervision after the federal agency determined the small Baltimore institution was undercapitalized.

The bank — which opened in 1920 to combat rampant discrimination in lending — is one of the oldest continuously operated black-owned businesses in the country, according to Creative Investment Research, an analyst of minority and women-owned banks."

See: http://articles.baltimoresun.com/2010-03-11/business/bal-idea-bank-0311_1_federal-agency-women-owned-creative-investment-research

FDIC revises rules on private equity investments

According to the New York Times, "The Federal Insurance Deposit Corporation imposed(new rules governing investments by) private equity firms seeking to buy failed institutions, although they eased more onerous proposals in hopes of luring them to the table." The new rules are designed to address concerns that "private equity buyers might engage in aggressive practices that could put its deposit insurance fund at risk."

"The rules..require private equity-controlled banks to pour enough capital into a failed bank so that it has a cushion of at least 10 percent of its assets for three years. The F.D.I.C. dropped a requirement that private equity firms supply additional capital in the event of a severe downturn, required private equity firms not sell an acquired bank for at least three years, imposed restrictions barring the acquired bank from lending to companies affiliated with the private equity buyer, and exempted private equity firms from complying with the h…

Black Banks Are Feeling the Pinch

Black Banks Are Feeling the Pinch Recession pushes profits to nine-year lows By Jeffrey McKinney - June 08, 2009

Profits at the nation’s black owned banks last year plunged to a nine-year low, newly released data shows. The annual statistics, compiled last month by William Michael Cunningham, senior investment adviser at Creative Investment Research Inc., a Washington D.C. firm specializing in minority banking, illustrated a major decline as some black owned banks suffered big losses tied to securities-related investments.See: http://www.blackenterprise.com/be-100s/be100s-news/2009/06/08/black-banks-feeling-the-pinch