The Case for More Diverse Ownership of Black-Owned Banks

American Banker
Monday, September 25, 2017

The wealth gap between whites and blacks in America is massive and persistent, but the nation’s black-owned banking sector has been shrinking faster than the rest of the banking industry. The connection between these two trends is the subject of a new book by University of Georgia law professor Mehrsa Baradaran: “The Color of Money: Black Banks and the Racial Wealth Gap.” Baradaran argues that the sector can never eradicate black poverty without more structural support. “To be a black-owned bank, 51% of your capital has to be from black investors. And that really restrain them, because they can’t raise capital in the typical ways,” said Baradaran in an interview with American Banker. “So maybe give them more flexibility in that.”