The country’s largest African-American-founded bank is fighting to survive. Carver Federal Savings bank, located in Harlem, has served the business community for 67 years.
But like most Black banks, Carver was hit by the economic downturn during the Great Recession. Thanks to help from the federal government the bank and a group of Wall Street institutions, Carver was able to stand the test of time. But despite it’s ability to survive, the bank isn’t quite in the clear, reports Crain’s New York.
BLACK AMERICA IS STILL IN DEEP RECESSION
"I invite you to check us out if you haven't done so for a while," Chief Executive Michael Pugh told members of the Greater Harlem Chamber of Commerce last week.
Whether there is a place for Carver, the last black bank in New York, is a question facing black banks nationwide. Since 1987, three-quarters of the nation's 91 African-American banks have disappeared. The most recent casualty came last month, when regulators closed Atlanta's Capitol City Bank & Trust after years of losses. In January, Chicago's Highland Community Bank met the same fate.
The collapse of so many African-American banks has alarmed black leaders, including those inside the Obama administration, who are only now taking measures to save the 24 that remain in the United States. Most of the banks are small and struggle to make money, but their defenders argue they must be preserved because they remain career launching pads for minority and women bankers, in addition to having long histories of providing credit to consumers and entrepreneurs who couldn't get it anywhere else.
Though Harlem's renaissance has expanded the presence of Chase, Citibank, Wells Fargo and Bank of America, black banks say that minorities need dedicated institutions to serve their financial needs because the era of discrimination is far from over. They point to the fact that regulators and the U.S. Justice Department found that minority borrowers were pushed into more costly subprime loans or charged higher fees than comparable white borrowers during the housing bubble, and that once-conservative black banks were pressured by federal regulators to get into risky loan-making.
The discussion as to whether or not Black banks will be able to survive will fall primarily on their ability to stay relevant.
"Absolutely these banks are still relevant, and it's important for black businesses to find ways to work with them," said Keith Clinkscales, CEO of Revolt Media, a cable network owned by Sean "Diddy" Combs.
Clinkscales said that his company is in talks with Carver bank to open an account. "I'm busy, you're busy, but we have to do it," he said.
(Photo: Carver Federal Savings Bank)