Brief The Potential and Limits of Black-Owned Banks
Michael Neal, John Walsh
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To help policymakers and other stakeholders better understand the role and trends of Black-owned banks, we evaluate the most recent comprehensive data. We find that the typical Black-owned bank is a community bank that serves predominantly Black communities in many ways. Black-owned bank lending helps small businesses, nonprofits, as well as Black homebuyers. They have always maintained their focus on predominantly Black communities, increasing their mortgage lending to these communities and to Black borrowers during the housing crisis, while other institutions backed off. These banks are typically willing to serve their communities and generally lend in greater shares to moderate- and low-income communities in ways that may protect diversity in these neighborhoods. However, these banks have declined significantly in numbers and likely face headwinds that extend beyond those of the community banking sector as a whole.

Research Areas Wealth and financial well-being Neighborhoods, cities, and metros Race and equity Housing finance Housing
Tags Federal housing programs and policies Asset and debts Racial and ethnic disparities Housing markets Housing and the economy Single-family finance Financial products and services Wealth inequality Inequality and mobility Finance Community and economic development Racial barriers to housing Racial inequities in neighborhoods and community development
Policy Centers Housing Finance Policy Center