A Brief Timeline of Financial Institutions and Black History
In honor of Black History Month we would like to share some moments throughout history that affected the financial industry and banking institutions.
1888
The first black-owned bank in America was Capital Savings Bank in Washington, D.C. Several more black-owned banks quickly followed in the coming years.
1920s- 1930s
The first black-owned credit unions were formed in the United States in the 1920s and 30s.
There was clearly a gap in the financial industry, and a need for financial institutions in urban areas. Credit unions in the beginning of the 20th century were created with a goal to help marginalized groups like poor farmers and urban groups to become more self-sufficient.
1934
When President Franklin D. Roosevelt signed the Federal Credit Union Act into law in 1934, federally chartered credit unions in every state became legally authorized to create a system of not-for-profit cooperatives to promote thrift and sound financial practices.
1960s
As the Civil Rights Movement gained momentum in the 1960s, so did the founding of black credit unions.
President Lyndon B. Johnson’s policies, The Great Society Initiative, allowed hundreds of credit unions to be formed to serve low-income groups, often in black neighborhoods. Credit unions served as an alternative for saving and borrowing money in more rural and urban communities, often due to segregated banking institutions.
1989
Although banking-related, in 1989 the Financial Institutions Reform Recovery and Enforcement Act was enacted, mandating the FDIC to help preserve and promote minority-owned institutions. (The National Credit Union Share Insurance Fund was created by Congress in 1970 to insure members’ deposits in federally insured credit unions.)
Today
Today, there are still black-owned banks and credit unions that serve the same purpose that they did over 60 years ago- to help close the wealth gap in America. You can find more information about black-owned banks and credit unions here.
