On April, 3rd, 1968, Martin Luther King Jr. gave his famous “I’ve Been to the Mountaintop” speech in Memphis. In it, he urged African Americans to put their money in black-owned banks. It wasn’t his most famous line, but the message was clear: “We’ve got to strengthen black institutions. I call upon you to take your money out of the banks downtown and deposit your money in the Tri-State Bank. We want a ‘bank-in’ movement in Memphis … We begin the process of building a greater economic base.”
The next day, King was assassinated, and his hope of harnessing black wealth remains unfulfilled. Before integration, African Americans in cities like Richmond, Chicago, and Atlanta relied on black community banks, which were largely responsible for providing loans and boosting black businesses, churches, and neighborhoods. After desegregation, black wealth started to hemorrhage from these communities: White-owned banks were forced to open their doors to African Americans and the money that once flowed into black banks and back out to black communities ended up on Wall Street and other banks farther away.
“We started to lose a lot of our businesses and support for our businesses,” says Michael Grant, president of the National Bankers Association, a trade group representing nearly 200 minority and women-owned banks across the United States. “That was the toxic side of integration.” The financial meltdown of 2007 wiped out 40 percent of African American wealth in the United States, killing off many of these already-struggling community banks (they were not part of the big Wall Street bailout). Tri-State Bank in Memphis still exists, but it’s among the few that survived. Only 25 black-owned banks remain in the United States, according to the latest data from the FDIC, compared to 45 a decade ago. At their height, there were more than 100, says Grant.