Black Banks Are the Gateway to Black Wealth 

Kenneth Kelly, chairman and CEO of First Independence Bank. 


Black wealth continues to be a topic of discussion for not just the African American community but all who wish to see Black communities have a better financial life. Black-owned banks and Black bankers act as a buffer between financial wellness and the underserved community.  


The creation of the Negro Bankers Association, which became the National Bankers Association in 1948, gave way to a sense of financial freedom for Blacks in that era. Now more than ever, the need for Black banks becomes apparent as African Americans struggle to find financial resources and equality. 


“Black bankers have a multigenerational legacy of providing financial literacy services to customers that other banks are unable or unwilling to provide. For 95 years, members of the National Bankers Association have been helping those in the Black community with culturally competent services that directly address issues hindering borrowers from being bankable or eligible for loans,” said Nicole Elam, president and CEO of the National Bankers Association. “This assistance is often seen through bankers teaching small business owners [and] church and community leaders basic accounting and bookkeeping best practices. Today, through the National Bankers Community Alliance, Black- and other minority-owned banks support traditionally excluded and underserved households with asset accumulation and sustainability.” 


Early in the nation’s history, Blacks were prohibited from opening bank accounts at traditionally white financial institutions. The establishment of Black banks started before the Civil Rights Movement when Dr. Martin Luther King Jr. famously encouraged Blacks in Memphis to remove their funds and place them in the care of Tristate, the Black-owned bank in the city in 1968. In 1888, Capital Savings Bank opened its doors as one of the nation’s first Black-owned banks. The opening of The Savings Bank of the Grand Fountain United Order of True Reformers in Virginia offered African Americans a second Black-owned financial institution to safeguard their funds thus opening the door for the creation of additional Black banks.  


In Michigan, First Independence Bank is the only Black-owned financial institution headquartered in the state. A member of the NBA for more than 35 years, First Independence Bank is nestled in the heart of Detroit and first opened its doors in May 1970. Since then, it has served as a beacon of light for African Americans and an ally in banking.  

Helping to open accounts and apply for financial loans, First Independence Bank has helped to bridge the gap of financial health, wealth and literacy. 


“The studies from the FDIC and the Federal Reserve have demonstrated that individuals that go to African American banks are more likely to get more help in the whole application process. [They are] more likely to get better assistance and [help] that they need to complete the application process, which also leads to better outcomes,” said Kenneth Kelly, chairman and CEO of First Independence Bank. 


In 2020, Statista released a study showing more than 13 percent of Black households in the country have no bank accounts. Representing the second largest demographic, African Americans resort to third-party sources to cash checks, receive loans and perform other financial services.  


“We’re more likely to be underbanked, meaning we have a higher percentage of African Americans who don’t have a bank account at all. That means they use check cashing and payday lending, which is extremely expensive and most of the time, it’s on the most vulnerable people who have most likely the least amount from an economic perspective,” said Kelly.  


Building financial awareness in the Black community is key to breaking generational and systemic strongholds. With just 42 Black-owned banks across the country, the race is on to shift the mindset of African Americans and their relationship with money.  


“The foundational relationships between Black-owned banks and the communities they serve are crucial to changing attitudes in the Black community. We know that customers need assistance with building healthy financial habits and accessing personal finance education and resources. But we can’t stop there; our commitment extends past changing mindsets and education to the evolving behaviors in the community that will lead to generational wealth creation,” said Elam.  


The National Bankers Association stands as the leading force in minority banking. Hoping to give the community education and opportunities around banking, the organization continues to be a path and partner towards economic freedom for minorities.  


“This is just a saying of mine that ‘money is the oxygen in a capitalistic society,’ and we have to figure out collectively how do we keep more oxygen in our communities, how do we learn to acquire more oxygen into the communities we support and until we do that, we will always be the discrepancies we see as it relates to wealth along the lines of race,” said Kelly.  

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