More On The "Business and Building" Black-Owned Bank Initiative

In all of my discussions with representatives of the banks we seriously considered for the endorsement eventually given to One United Bank, the challenge that these institutions were facing was clear and simple - they do not have enough people opening accounts, and therefore are unable to take advantage of growth and development opportunities that lie within the Black community. 'Cedric, you are absolutely correct, our problems stem from deposit deprivation, and what is doing is wonderful and would address that," one high-level representative admitted to me.

For years has been looking at the problem - in public postings of articles on Black-owned Banks; and in private research and discussion with these institutions. One piece of research that we came across written in the 19th century outright stated that banking was the last field that we were to be kept out of in the business profession, because of its importance. Our economic condition is partly the way it is because we as a people, have not related to one another, and our commercial lending institutions (and other formal and informal institutions of capital accumulation, and financial intermediation) as other communities have. My 2003 interview with Steven Silbiger, author of The Jewish Phenomenon, provides strong evidence, supporting our position. The rich recorded history of the economic activities of various ethnic, immigrant, and even religious communities provides overwhelming proof.

Many of us know the statistics, and have done the historical research. The question remains - what are we going to effectively do about it?

Our Business and Investment Initiative - which also has an Investment Club initiative, which we will discuss in more detail in person at the Business and Building gathering in Washington D.C. later this month - is dedicated to skillfully pooling our resources, in a way that helps Black financial institutions, individuals and communities. By keeping the focus on three areas: financial literacy, wealth creation and community development, our agenda is holistic and capable of satisfying those who are 'unbanked,' never having had a bank account; those who are looking to invest their money and gain a nice return in order to build wealth; and those who are seeking to find ways to leverage unity in financial matters and cooperative economics to develop our suffering communities.

Our Initiative and selection of One United has laid the groundwork and already set a standard for a meaningful relationship between a group of individuals concerned about community and economic development and those financial institutions based and rooted in our community, serving in the name of our people. At our gathering, we will discuss in more detail the strategy, negotiations, and incorporate new ideas that can take this Initiative to another level. We look forward to other Members of our Community building on what a few of us have set in motion. In order to maximize the relationship we need a critical mass of involvement, engagement and support.

The Black-owned Bank is the best formal institution we have available to start all of these discussions. Sure, down the road we expect to evolve into high finance and connect with Black investment banks, private equity and venture capital firms and asset managers, but the institution that is in the neighborhood, where all of us can find an initial shared interest and point of departure for dialogue and action, rooted in our historical struggle, is the community commercial bank.

It seems, that everyone knows that banking in the Black community is viable and lucrative. Over the years I have privately debated ideologues, reporters, and activists who seem to hate the sound of the idea of Black people attempting to pool their resources together. I understand that some of their negative reaction has nothing to do with whether this is important or not or feasible. Some - even a few Black people - still simply hate the sound of Black unity in money matters, and want to prescribe full economic integration - advising us to place our dollars in institutions outside of the, in many cases, segregated (or separated) Black community. Their advice is an approach that no other group in American history took in order to create wealth, start businesses, and help their suffering poor.

'They' will never openly tell us the secret of their economic success, or teach and train us into it on a mass level. That responsibility remains our own. We are offering a possible avenue.

In argument, there are two facts that they cannot overcome that are germane to what this is really all about - 1) studies have shown that Black lending institutions are more likely to lend money to Black applicants than White banks are and 2) because of income density, poor Black neighborhoods offer the greatest deposit and profit potential for banks looking to establish multiple branches (that is why I/we see so many Bank of America, and Wachovia branches and those of other 'mainstream' banking institutions) in some of the supposedly 'worst' neighborhoods. The second point is one of the 'secrets' of banking that many know but won't tell.

And that is why many Blacks are mocked and ridiculed when they attempt to take their money out of 'mainstream' institutions and park it in one that is Black-owned.

We'll share such stories and more on October 28th. But this is about building and business, not venting and whining.

We have the power, in unity, to change everything we complain about, individually.

There are many, many ways that our Initiative can positively affect political issues facing our economy; individual and group investment strategies; Black-owned businesses seeking capital, real estate development; and the business models of our financial institutions.

That's enough for now, we have much more to discuss in person. I look forward to seeing you later this month, for a much needed heart-to-heart to get into this subject with the detail and spirit it deserves.

It is time for us to put our money where our mouth, mind, and heart have been for years.

We are blessed to have a tremendous opportunity to do more than just know or understand a problem, but to actually do something wonderful about it.

If you want to discuss taking our struggle to a higher and more effective level, and take action steps toward it, please join us October 26th to the 28th for "Business and Building" II in Washington D.C.:

Wednesday, October 24, 2007