Black Money Business Jobs : Black-owned Banks Struggling to Keep Doors Open

Discussion in 'Black Money Business Jobs' started by Destee, Jun 5, 2007.

  1. Destee

    Destee destee.com STAFF

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    Black-owned Banks Struggling to Keep Doors Open

    by Heather Faison
    Originally posted 5/30/2007

    Independence Federal Savings Bank, one of the nation's oldest Black-owned financial institutions, based in Washington, D. C., was taken over in an aggressive buyout by a White developer last week, sending a chilling message to the already diminishing Black financial industry.

    “This was quite a loss and unfortunately when one Black bank closes there is a big sore, but when one bank from a majority-own closes it is not as devastating,” said Norma Hart, President of the National Banker’s Association.

    Less than two decades ago there were nearly 50 Black-owned banks. But, according to the Federal Reserve there were only 31 certified operations in 2006.

    That number decreased when the takeover of Independence Federal Savings in Washington, DC, by developer Morton A. Bender, was finalized. After a ruthless five year battle during which Bender held up the bank in multibillion-dollar lawsuits, federal regulators allowed him to acquire 51 percent of the company’s stock which gave him control of the bank’s executive board.

    “That’s really a sad day; especially since the owner believed in the community and had he still been alive I believe that would not have happened,” said Hart.

    Black-owned banking institutions have opened doors of financial opportunities to African Americans since the Jim Crow era when White-owned banks denied service. Whether it was helping a small business get off the ground or a family move into their first home, these institutions have a legacy of service to communities and neighborhoods and are fighting to maintain ownership and keep their doors open.

    The Consolidated Bank & Trust Company of Richmond, Va. was founded in 1903 by Maggie L. Walker, an African-American who was the first female Bank President in the United States. Consolidated had been the oldest continually operating Black-owned bank in the nation until two years ago, when the struggling bank merged with Abigail Adams National Bancorp, Inc., the parent company of The Adams National Bank.

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    :heart:

    Destee
     
  2. Destee

    Destee destee.com STAFF

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    "Only 31 certified operations in 2006"

    Do yall find that number surprising, or is it just me?

    :heart:

    Destee
     
  3. Monetary

    Monetary going above and beyond PREMIUM MEMBER

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    Thanks for sharing this article Destee.

    I have a few comments on what is happening with some of these Black-owned banks and a suggestion or two for Black-owned businesses, not just Black-owned banks.

    What I see happening in this article is that Black-owned banks may be laying back after finding what they feel is their "niche" in the banking industry. THERE IS NO SUCH THING NOWADAYS. The trend in the banking industry...and in most industries...is for a company to be a one-stop shop for customers. That means they will try to provide every service currently available to their customers that other companies can provide. Not all companies are doing this. However, this is how they increase market share and profit. This is called competition. Black-owned banks should be no different. Black-owned banks shouldn't just sit back and provide only those services that are in high demand for their respective target group (Black people in their immediate surrounding neighborhood...although they provide these services to non-Black groups as well). This is what I infer from the article.

    Black-owned banks/companies should seek to be a one-stop shop for their customers as well. They should provide checking and savings accounts; higher interest accounts (Money Market accounts, Certificate of Deposits (CDs), Individual Retirement Accounts (IRAs)), loans (personal, car, mortgage, education, and business), and access to financial advisors. They should run the gamut when it comes to banking.

    Also, Black-owned banks/companies should increase spending on innovation by putting a percentage of their profits into Research & Development (R&D) to improve ways to serve their customers.

    All Black-owned businesses should be financially and operationally stable. By this, I mean that the management should run the business efficiently (low cost in producing a good and/or service) and financially sound (sufficient operating cash flow). They should always be leery of corporate raiders waiting to implement a hostile takeover at any moment. In order for this to happen, you must have management of this mindset. If you get to the point where you can no longer improve the company, then step down and bring in some new blood.

    A Side Note: We, as a people, need someone who will stick and stay, someone who has as their mission to provide us with the best product and/or service available at a reasonable cost. The current mindset of some business owners to take advantage of the lack of services provided in the Black community to the detriment of that community must be identified and avoided at all cost. Beware of the pied piper. Let's support those who have our best interest at heart and not jump for anything that's offered because we have not. We deserve better.

    Peace Fam.
     
  4. KWABENA

    KWABENA STAFF STAFF

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    Good Point(s) Bro. Money.

    My thing is: I am not sure of exactly how much work these Black Banks/Companies are putting into maintaining their Businesses. They need to do much more than sit behind the counters, and run their Banks. Perhaps, I suggest the following (the same goes for Black Businesses):

    - Hold Seminars/Classes in Our Communities
    - Hold Workshops
    - Invest in Mass Communications as far as Advertising in concerned
    - Build and Establish working relationships with other Black Business Owners
    - Form alliances with other Business (preferably Black Businesses)
    - Recruit Students/hold Internship Programs and Opportunities for Students
    - Sponsor Student Organizations
    - Sponsor various School programs
    - Get into the Churches and work with the Ministries

    etc. etc. etc.

    That is worth the try.

    MK
     
  5. dustyelbow

    dustyelbow Well-Known Member MEMBER

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    Black banks have been doing what they could that is why they started out with SAVINGS in their name and/or SERVICE.

    They were working on PRINCIPLE set by many founders.

    Now these other services although good for the POCKET of those who HAVE does not benefit our COMMUNITY in GREAT NUMBERS.

    I salute their INITIAL EFFORTS to get our community to SAVE and many did but in TODAY'S CLIMATE saving is a LOST ART.

    SAVING at best is considered COUNTERPRODUCTIVE.

    I am sure many of our ancestors who did BUSINESS in AMERICA would FIND it ODD that SAVINGS is considered COUNTERPRODUCTIVE.

    Maybe I am talking foolish stuff....

    Oh well.
     
  6. nubian noir

    nubian noir Well-Known Member MEMBER

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    I agree with you on many of your sugguestions. I will just piggyback on the part about the students. I think that they being the black banks should put more into reaching the kids about saving and investing and learning how money works.
     
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