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Dashia Milden is a staff reporter for NextAdvisor based in North Carolina. She has previously written for…
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Is it time to move your money to a Black-owned bank?
Black Americans have been left out and let down by the banking industry, reinforcing a wealth gap that makes it harder for them to reach their personal goals. Working with a Black-led financial institution can help close those gaps and support the financial success of Black communities, according to advocates and industry experts.
Black Americans are more likely to be denied credit or be approved for less credit than requested compared to any other group, regardless of income, Federal Reserve data from 2021 shows. They are less likely to have access to basic financial services, according to the same study. They’re also more likely to report living paycheck to paycheck, having student loans, and not owning a credit card, according to a recent Credit Sesame survey.
And when it comes to housing, Black Americans are more likely to have mortgage applications declined, compared to their White counterparts. If Black people are approved, they have higher interest rates compared to White American households with lower incomes, according to a report from the Joint Center for Housing Studies of Harvard University.
“Our financial system today works great if you qualify for it,” says Kevin Cohee, chairman and CEO of OneUnited Bank, a Black-owned online bank. That’s why Black-owned financial institutions are playing a key role in erasing financial disadvantages faced by Black Americans and other underserved communities, he says. They offer services and accounts aimed at opening up the financial system to those who’ve been left out.
Research has also shown that Black Americans are more likely to be approved for loans by Black-owned banks, according to the Brookings Institute.
But since Black-owned banks often rely on government funding, they’re limited in the services and products they’re able to offer customers. Here’s how these banks are working to level the playing field for Black Americans, and how your support can help them.
Black-owned banks are uniquely situated to help provide solutions, education, and access to customers who traditionally have faced the biggest barriers to access.
“It’s us understanding [the problems] and being able to bring the resources to [provide] programs that have national effects,” says Cohee. “We can take on [topics like] financial literacy because when we’re unequivocally Black. We can communicate to Black Americans in a way where something like financial literacy becomes real.”
These banks offer resources such as financial literacy classes and homebuying courses to help educate community members on the options available to them. They often also tackle social and economic issues locally, with initiatives such as meal donations to support their communities.
Many Black Americans need targeted outreach, communication, and resources to help them enter the financial system for the first time or reenter after financial setbacks, Cohee says. And the big national banks just aren’t offering them.
Around 40% of Black households were either underbanked (27%) or completely unbanked (13%), according to a 2021 Federal Reserve report. The Fed defines “unbanked” as not having a checking, savings, or money market account — and therefore more likely to need to rely on alternative (and sometimes predatory) financial services like pawn shop loans or payday lenders. “Underbanked” is defined as having a bank account but still needing to use these alternative services. By comparison, the overall population was just 16% underbanked and 6% unbanked.
A Black-owned bank needs customers to thrive. But these banks have been on a decline in recent years — largely due to a lack of assets compared to larger banks.
Many Black-owned banks are a part of the FDIC and NCUA minority depository institutions (MDI) program, which supports minority- and women- owned financial institutions. But many Black-owned MDI banks have less than 1,000 customers and don’t bring in as much money as larger, well-known national banks and credit unions.
There are other challenges these smaller banks face, too. Today, online banks and fintech companies thrive on their ability to offer high interest rates and innovative technology, but it can be difficult for community-led institutions to keep up. Larger, national banks have more assets and money to open doors to more fintech features and opportunities.
Still, Black-owned online banks are entering the online banking market— as shown in our list below. Black-owned online banks not only have modern online and mobile banking features and resources, but can also help Black Americans in areas where traditional brick-and-mortar Black-owned banks are harder to find.
If you bank with a Black-led financial institution, then you’re using your spending power to support underserved communities, says Wole Coaxum, founder and CEO of MoCaFi, a Black-led online bank.
“Part of it is being supportive to drive viability,” Coaxum says. “You don’t have to change your behavior or anything. But in your day-to-day behavior, you’re serving and supporting businesses and supporting communities.”
Start by looking for a Black-owned or -led bank that will meet your financial needs, such as the available account type, perks, mobile app features, and more that can help you meet your goals. You may also choose to open an account for your kids or to prepare for retirement.
Many community and local banks, including Black-owned financial institutions, do not offer the same high yields on savings and deposit accounts that you can find from online-only banks. While a high-yield savings account can be a great tool to earn a bit of extra cash on your money, we believe the best account choice for you is the one that fits your financial and personal goals.
If you’re looking for the best interest rates, you’ll likely need to look at an online-only bank or credit union. But for many Americans, the opportunity to support the Black community by opening an account at a Black-owned bank may be worth more than the potential interest loss from choosing a non-high yield account.
Many Black-owned and -led banks offer traditional banking products, such as checking, saving, and investing options. These banks also offer services to help clients understand money and the financial system, including credit counseling, financial literacy and homebuying courses, and more.
You can also jump to our lists of Black-owned online banks and regional banks.
To compile this list, we compiled commonly cited and searched-for Black-owned and -led financial institutions as well as those listed as Black-owned within the FDIC’s minority depository institutions (MDI) program.
Not every state has Black-owned or -led banks. For that reason, we also included information on regional and online-only Black banks. While we used our best efforts and available resources to compile as many banks nationwide as we could, this list is not exhaustive. We will update this list in the future with additional banks as we learn more. If you know of a Black-owned bank not on this list, please email the author at dashia@nextadvisor.com.
Alamerica Bank: Alamerica Bank offers online banking and services such as bank transfers and transaction history. Bank transfers, account balance updates, a free three-ring binder to keep paper statement copies are also available.
Citizens Trust Bank: Citizens Trust Bank has a range of checking accounts, credit cards, and savings options. The bank also offers a learning center to help customers learn about building and maintaining credit. Citizens Trust branches are available in the surrounding Atlanta, GA and Birmingham, AL areas.
Commonwealth National Bank: Commonwealth National Bank offers several types of accounts, including a Fresh Start” account for those with less-than-perfect credit. There are also several savings account, including one for Christmas prep. Commonwealth also has several financial wellness events in the community to help “close the racial wealth gap,” its website says.
There are no Black-owned banks in Alaska, but you can still open an account with an online-only Black-owned bank.
Zions National Bank is a regional bank available in Arizona.
Hope Credit Union is a regional bank available in Arkansas.
Broadway Federal Bank: Broadway Federal Bank merged with City First Bank in 2021. The bank has branches in California and D.C. You can withdraw cash from your eligible account at 55,000 national ATMs, including Citibank and Allpoint ATMs.
Zions National Bank is a regional bank also available in California.
Zions National Bank is a regional bank available in Colorado.
There are no Black-owned banks in Connecticut, but you can still open an account with an online-only Black-owned bank.
There are no Black-owned banks in Delaware, but you can still open an account with an online-only Black-owned bank.
Phi Beta Sigma Federal Credit Union: Phi Beta Sigma Federal Credit Union offers a variety of banking products and plans to offer money markets, junior accounts, ACH, and online deposits in the future. Membership is only reserved for Phi Beta Sigma Fraternity, Incorporated and Zeta Phi Beta Sorority, Incorporated members, and their families.
Howard University Employees Federal Credit Union: Howard University Employees Federal Credit Union offers a few unique services, including insurance discounts, a free credit report, and Skip-A-Payment to skip a loan payment in December or January. This service requires a $25 fee and requests must be made 30 days in advance. Plus, interest will still accrue. The credit union is only available on Howard University’s campus.
City First Bank is a regional bank also available in the District of Columbia.
FAMU Federal Credit Union: FAMU Federal Credit Union offers online banking and mobile deposits. The credit union also offers first-time homebuyer, refinancing, and loan courses for customers. Accounts are limited to Florida A&M University employees and students, and select churches. You can access ATMs at American Express, Publix, and Walmart locations.
Carver State Bank: Carver State Bank has Christmas Club savings accounts, online banking, bill pay, and a Credit Card Potential Test to help determine your credit limit based on several factors, such as your credit score. Carver State Bank has two branches in Savannah, GA, online banking, and no ATM fees at MoneyPass and Wells Fargo ATMs.
Omega Psi Phi Fraternity Federal Credit Union: With Omega Psi Phi Fraternity Federal Credit Union you can open individual, joint, and custodial accounts. You must be a member of the fraternity to open an account. You can visit the Toccoa, GA branch to handle bank transactions.
There are no Black-owned banks in Hawaii, but you can still open an account with an online-only Black-owned bank.
Zions National Bank is a regional bank available in Idaho.
GN Bank: GN Bank offers several types of checking and savings options, including accounts for kids and teenagers. You can bank at GN’s bank location in Chicago and online.
Mount Zion Indianapolis Credit Union: Mount Zion Indianapolis Credit Union offers GAP car insurance, credit repair counseling, and debt protection insurance to its members. You can visit the credit union for more information on fees, deposits, and account types.
There are no Black-owned banks in Iowa, but you can still open an account with an online-only Black-owned bank.
Liberty Bank is a regional bank available in Kansas.
Liberty Bank is a regional bank available in Kentucky.
Southern Teachers & Parents Federal Credit Union: Southern Teachers & Parents Federal Credit Union has a range of account types and services, such as reloadable Visa cards, extended car warranties, discounted insurance policies, and financial counseling. The bank serves Southern University campuses in Baton Rouge, New Orleans, Shreveport, West Feliciana, Assumption, and Lafourche Parish. You can also bank at CO-OP shared branches and ATMs.
Liberty Bank and Hope Credit Union are regional banks also available in Louisiana.
There are no Black-owned banks in Maine, but you can still open an account with an online-only Black-owned bank.
Harbor Bank of Maryland: Harbor Bank of Maryland offers several types of checking, saving, and investment accounts. The bank also has calculators to help understand retirement, leasing, home buying, and more. Harbor Bank has eight branches throughout the Maryland area, plus online and mobile banking.
Municipal Employees Credit Union of Baltimore: The Municipal Employees Credit Union of Baltimore offers home, auto, disability, and life insurance. You can bank with MECU online or via mobile app. You can also handle transactions at one of its nine branches and 30,000 ATMs.
Andrews Federal Credit Union, Democracy Federal Credit Union, and Industrial Bank are regional banks also available in Maryland.
OneUnited Bank is a regional bank available in Massachusetts.
First Independence Bank: First Independence offers services including life insurance, financial planning, roadside assistance, local discounts, and business banking products. You can handle transactions online using the mobile app, and at one its three branches. FIB is also available in Minneapolis, MN.
Liberty Bank is a regional bank available in Michigan.
First Independence Bank is a regional bank available in Minnesota.
Jackson Area Federal Credit Union: Jackson Area Federal Credit Union offers accounts for kids, teenagers, and young adults to learn good spending and saving habits. The credit union also has financial calculators to help you plan to set aside money for retirement, debt, mortgages, and more. The credit union has two branches, a mobile app, and ATMs through CULIANCE Locator and Dolphin ATM Alliance.
Hope Credit Union and Liberty Bank are regional banks also available in Mississippi.
St. Louis Community Credit Union: St. Louis Community Credit Union offers youth accounts, financial education resources, and it partners with other local organizations to offer other services, such as food and healthcare. The credit union has 15 branches across the St. Louis area and other shared branch locations.
City First Bank is a regional bank available in Montana.
There are no Black-owned banks in Nebraska, but you can still open an account with an online-only Black-owned bank.
Zions National Bank is a regional bank available in Nevada.
There are no Black-owned banks in New Hampshire, but you can still open an account with an online-only Black-owned bank.
Messiah Baptist Church Federal Credit Union: Messiah Baptist Church Federal Credit Union offers holiday and vacation club savings accounts, special loan payoff, and debt relief programs. Financial education classes are also publicly available, however, the products and services are only for customers.
Andrews Federal Credit Union and Industrial Bank are regional banks also available in New Jersey.
Zions National Bank is a regional bank available in New Mexico.
Carver Bank: Carver Bank has special accounts for students and military members. It offers banking transactions via mobile app, Zelle, online, and eight branches in New York. You can also use Carver’s surcharge-free ATMs at Allpoint, Wells Fargo, and Chase.
Urban Upbound Federal Credit Union: Urban Upbound Federal Credit Union has a few services available for customers to bank and learn financial literacy. New York Housing Authority members can pay their rent through the bank with lower convenience fees and other benefits. UUFCU also offers free financial counseling and calculators for loans, mortgages, and deposits. The credit union charges a $5 quarterly fee for inactive accounts, but you can avoid this by making one transaction annually. Access accounts via online banking and in-person at its Long Island City branch.
Industrial Bank is a regional bank also available in New York
Mechanics & Farmers Bank: Mechanics & Farmers Bank has a wide variety of banking products and services, including cell phone protection, travel discounts, interest, cash back, notary services. With M&F Bank, you can redeem your rewards for travel, events, gift cards, and more. The bank also offers financial education and calculators as personal finance management tools. You can bank online, via mobile app, and in-person at the bank’s eight branches.
Greater Kinston Credit Union: Greater Kinston Credit Union offers a range of banking products and services, including GAP insurance, notary services, youth bank accounts, and Another Chance (GKCU’s overdraft protection service). You can manage your accounts online and in-person at the Kinston branch.
There are no Black-owned banks in North Dakota, but you can still open an account with an online-only Black-owned bank.
Toledo Metro Credit Union: Toledo Metro offers several banking products, including custodial and youth bank accounts. Services available include GAP coverage, insurance, and extended car warranties. Members can use MoneyEd for financial education resources. You can handle banking transactions at Toledo Metro Credit Union’s shared branches and ATMs.
Toledo Urban Federal Credit Union: Toledo Urban Federal Credit Union offers a wide range of banking services depending on your financial needs, including a holiday or vacation savings account. Customers also have access to credit counseling, overdraft protection, notary services, income tax services, and a bill payment center to pay your utilities in one spot. TUFCU also is heavily involved in the community, including festivals, concerts, parades, and Community Day.
First Security Bank and Trust Company: First Security Bank and Trust Company is one of Oklahoma’s top banks in the Small Business Association Paycheck Protection Program to support local businesses that were affected by the pandemic. Online banking, bill pay, and in-person banking are available.
Zions National Bank is a regional bank available in Oregon.
United Bank of Philadelphia: United Bank of Philadelphia has accounts for seniors, kids, burial reserves, vacations, and holidays. Personal finance, retirement, and investment calculators are also available to help members manage their finances. Lastly, UBP has online banking and no-fee ATMs.
Hill District Federal Credit Union: Hill District Federal Credit Union has debit and gift cards, Christmas Club savings accounts, and more. HDFCU also has adult and kids’ financial literacy classes, but you must meet certain membership requirements to join. Visit the bank in-person to learn more about account offerings.
Democracy Federal Credit Union is another regional bank available in Pennsylvania.
There are no Black-owned banks in Rhode Island, but you can still open an account with an online-only Black-owned bank.
Optus Bank: Optus Bank is South Carolina’s first black bank. It is a Certified Community Development Financial Institution, which is “a mark of distinction reserved for financial institutions committed to empowering economically distressed communities,” according to its site. Online banking is available using the Optus mobile app, digital wallet, Alexa voice commands, and in-person at the bank and ATM. You can set financial goals, manage savings categories, pause your debit card, and more using the mobile app.
Palmetto Health Credit Union: Palmetto Health Credit Union gives members local discounts, complimentary notary services, postage stamps, and gift cards. The credit union also offers credit life and disability insurance. You can bank online, via the mobile app, in-person at branches, and 30,000 surcharge-free ATMs in Columbia, SC. However, you must meet membership requirements.
Brookland Federal Credit Union: Brookland Federal Credit Union offers financial literacy classes, identity theft resources, GAP insurance, and car insurance. BFCU also has a savings calculator to help calculate savings and interest earned. Eligibility is limited to Brookland Baptist Church members and their families.
There are no Black-owned banks in South Dakota, but you can still open an account with an online-only Black-owned bank.
Citizens Bank: Citizens Bank offers several banking products and services, including ATM rebates, overdraft protection, and waived monthly maintenance fees with electronic bank statements. It also has financial calculators to calculate loans, home buying, and savings. Citizens Bank has online and mobile banking, a digital wallet, 13 branches, and several ATMs throughout Tennessee.
Hope Credit Union and Liberty Credit Union are regional banks also available in Tennessee.
Unity National Bank: Unity National Bank has a range of banking products and services, including a safety deposit box and notary services. It offers online and mobile banking, and it has three branches in Texas and Georgia.
Faith Cooperative Credit Union: Faith Cooperative Credit Union offers a range of banking products, including club accounts, but checking accounts are not available. You must also be a customer for at least one month to apply for a loan. FCU membership eligibility is limited to Friendship-West Baptist Church, St. John Missionary Baptist Curch, and their families. There is only one branch at the Friendship-West Baptist Church in Dallas.
Mount Olive Baptist Church Federal Credit Union: Mount Olive Baptist Church Federal Credit Union offers savings, auto, mortgage, and loan calculators to help you manage your money and financial goals. Keep in mind that it doesn’t offer CDs, checking accounts, IRAs, or money market accounts. You can handle transactions online or at the credit union’s branch in Arlington, TX.
Oak Cliff Christian Federal Credit Union: Oak Cliff Christian Federal Credit Union offers a few special accounts, including Christmas and kids club savings accounts. The OCCFCU branch is in Dallas, TX, but online banking is available. You must meet eligibility requirements to join.
Zions National Bank is a regional bank available in Texas.
Zions National Bank is a regional bank available in Utah.
There are no Black-owned banks in Vermont, but you can still open an account with an online-only Black-owned bank.
Virginia State University Federal Credit Union: Virginia State University Federal Credit Union offers several account types and a range of insurance policies including GAP, life, and disability. You can access your account online or at the branch location near Virginia State University. Faculty, staff, contract employees, alumni, and students of the university may join, as well as their immediate family members.
Andrews Federal Credit Union, Democracy Federal Credit Union, and Transit Employees Federal Credit Union are regional banks also available in Virginia.
Zions National Bank is a regional bank available in Washington.
There are no Black-owned banks in West Virginia, but you can still open an account with an online-only Black-owned bank.
Columbia Savings and Loan Association: Columbia Savings and Loan Association is best for those interested in business banking. You can learn more about the bank’s options at its branch in Milwaukee.
There are no Black-owned banks in Wyoming, but you can still open an account with an online-only Black-owned bank.
If your area doesn’t have a Black-owned bank, these online options may fit your financial needs:
Greenwood: Greenwood is an online-only bank. When you become a customer, five meals will be given to a family through Goodr, a hunger relief and food waste solution non-profit. You can also donate to the United Negro College Fund (UNCF) and the National Association for the Advancement of Colored People (NAACP) through spare change round-ups. Greenwood also has member services, including extended warranties, airport concierge, and ID theft protection. However, Greenwood currently has a waitlist to join.
MoCaFi: MoCaFi doesn’t require a credit check or banking history to open an account. You can withdraw money at no charge from Allpoint™ or Wells Fargo ATMs, and mobile check deposits through Ingo™ Money. You can deposit cash at no fee at Rite-Aid, CVS, Walgreens, Dollar General, and Family Dollar. And when you support small minority businesses, you’ll earn 3% cash back with the MoCaFi debit card.
These regional banks aren’t limited to locations in one state. If you don’t see a black-owned or black-led bank for your state, check whether a regional bank services your area:
Andrews Federal Credit Union: Andrews Federal Credit Union offers several account holder services, including GAP insurance, payment protection, overdraft protection, and early direct deposit. Andrews Federal Credit Union serves Washington, D.C., Maryland, Northern Virginia, New Jersey, and select military areas. AFCU also offers online and mobile banking.
Democracy Federal Credit Union: Democracy Federal Credit Union has a range of banking products and account services, including bill pay, and a car buying service with TrueCar. Democracy also offers debt management, financial counseling for adults and youth, and budgeting assistance. The credit union has shared branches and a few dedicated branches in the D.C., Maryland, and Virginia areas. Online and mobile banking is also available.
Hope Credit Union: Hope has several personal banking products and services, including insurance. The bank has branches in Alabama, Arkansas, Louisiana, Mississippi, and Tennessee. Hope Credit Union also assists with many community initiatives geared toward affordable housing, offering financing to retailers to provide healthy food in communities, and economic mobility for HBCUs.
Industrial Bank: Industrial Bank offers checking, savings, and investing account types for consumers and businesses. You can earn rewards for using your debit card with Industrial, and surcharge-free ATMs with Allpoint. Industrial has branches in D.C., Prince George’s County and Largo, MD, Newark, NJ, and Harlem, NY.
Liberty Bank: Liberty Bank merged with Tri-State Bank in Memphis and Trust Co. to offer personal banking products and services, including online bill pay, debit cards, credit cards, and more. Liberty Bank also offers a financial wellness program, mortgage center, and small business resources. Branches are available in Alabama, Illinois, Kentucky, Louisiana, Michigan, Missouri, and Tennessee.
OneUnited Bank: OneUnited Bank offers savings, investing, and budgeting courses. It doesn’t charge ATM fees through MoneyPass Network, Chase Bank, or Citibank branches. There are 90,000 banking locations and over 35,000 ATMs. OneUnited Bank has several perks including getting your paycheck deposited two days sooner into your account, round-ups to automatically save your change, and no monthly fees. Branches are available in California, Florida, and Massachusetts. Online and mobile banking is also available.
Zions First National Bank: Zions First National Bank has a virtual personal finance center, podcasts, calculators, and on-demand webinars for the public. You’ll also receive discounts to shows, festivals, and museums when opening an account. Choose from several types of checking accounts, loans, and investment options. However, monthly maintenance fees vary depending on your account type and balance. There are 122 branches across Idaho, Utah, and Wyoming. Online and mobile banking are also available.
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