The banking industry is one of the most misunderstood. Many people do not realize that banks are owned by people, and they view them as utilities (electric, gas, banking). Some American banks are publicly traded, especially the large national banks, but most are privately owned. Currently, I own the largest Black-owned bank in America, OneUnited Bank.  Nevertheless, I was still astonished when I saw the opportunity 20 years ago, some 20 years after I graduated from Harvard Business School and worked in financial services for seven years, including at Bank of America and American Express.

There are currently only 19 Black banks in America out of more than 5,500 financial institutions. White people own most banks across the country, and most Americans bank with institutions owned by white people. That’s usually the case. Historically, the American banking system has created systemic and intentional barriers to the development of wealth for the Black community, such as financing slavery, Jim Crow laws, and predatory lending. While black banks employ more African Americans and lend to more black communities, they are less likely to hire white people.

#Bankblack Is Not Exclusive To Blacks.

How Does A Bank Get Bought?

• As far as buying a bank is concerned, it’s just like buying any company. Assets bought or invested lead to ownership. Today, $50 million can be invested by a group of investors.
• Second, regulators require a “clean record” and expertise in banking.
• In addition, you want to have a team managing the bank. Banks for sale must follow extensive banking regulations, balance the need to make money with managing risks (such as credit risk and fraud risk), and reinvest in the community.

Blacks should own banks, regardless of how long and difficult it is to buy them.

OneUnited Bank illustrates how communities of color can overcome the financial challenges historically associated with financial institutions with #BankBlack. With pride and trust rebuilt, the world will be a better place. Many of our customers have never experienced joyous banking before. Some customers had never done business with another bank before their relationship with OneUnited Bank.

Where Do Young Bankers Come From?

Since we serve them all, everyone needs to support us. #BankBlack does not belong to any particular group. We overcome disenfranchisement with the help of our customers, who are our primary allies. Our goal throughout this journey is to promote financial literacy because, at its core, banking should be used to build wealth and develop communities, not misunderstood.

How Much Does It Cost To Open A Bank?

These costs are significant, considering the banking industry is one of the most regulated in the country. Starting a bank typically requires $12 million to $20 million in capital. You may be able to raise the money locally if you start a community bank. Otherwise, you will have to approach investors.

Raising capital is necessary before applying to regulatory agencies. The regulators are strict in reviewing applications following the financial crisis. Once you have been approved for an account, you can open it.

What Are The Ongoing Expenses Of A Bank?

On an ongoing basis, costs vary. Expenses, however, account for about 15% of non-interest costs, with a median cost of $400,000 per branch nationwide.