Melvin B. Miller
Editor & Publisher

Money talks

OneUnited Bank has officially opened its new branch in Grove Hall. As might be expected, the occasion was well received. Now is the time for community residents to turn out in great numbers to open accounts.

Not too many years ago, African Americans understood well the importance of black banks. The policy of “red-lining” limited bank services available to minorities. Also, the treatment of minority customers at white banks was not always courteous.

With laws making racial discrimination more difficult, the number of black-owned banks in the United States has declined in the past 20 years from almost 50 to only 31, according to the Federal Reserve. Just recently, another black-owed bank was lost when the Independence Federal Savings Bank of Washington, D.C., became owned and controlled by a white majority.

Unfortunately, now that white banks solicit their business, many blacks do not understand the importance of having a strong ethnic presence in the banking industry. Black bankers tend to have a better understanding of the projects that will build the community. White banks know that blacks are a good source of business, but they tend to go after only the safest loans.

Other businesses also compete to become dominant with black consumers. Just 20 years ago, the total income of African Americans was $208.5 billion, according to a study by Target Market News. That figure has climbed to $723 billion. That is a sizeable, and therefore very attractive, market.

Despite this substantial increase in their income, many blacks believe that they are still poor. Consequently, they do not properly monitor their financial resources. Indeed, there are too many blacks who survive below the poverty level.

Nonetheless, the per capita income of African Americans is $19,869, an amount equivalent to or greater than that of residents of Spain, Greece, New Zealand, Portugal, Mexico, Poland, Russia, Brazil or Argentina.

The proclivity of blacks to see themselves as poor is intensified by the stagnation of their income. When adjusted for inflation, the purchasing power of all working class Americans, black or white, has actually declined. Blacks are also aware that the income gap with whites continues. According to Census data, the median income for whites in 2004 was $47,800, compared with $29,600 for blacks.

However, the most important gap is the racial disparity in net worth. A 2004 study by the Pew Hispanic Center found that the median net worth of blacks in 2002 was only $6,000, compared to more than $88,000 for whites. Net worth is determined by adding the value of all assets, such as cash, cars, homes and investments, less the amount of all debts, like credit cards, car notes or mortgages.

Net worth provides the resources to survive the loss of a job, start a business or buy a home. Your net worth, not your standard of living, determines how wealthy you are. Black banks have the special task of helping blacks acquire wealth and build their communities. OneUnited Bank offers the highest savings interest rate of any bank in America.

The bigger it is, the more that OneUnited Bank can do for the black community. In banking, size matters. The bigger the bank, the more varied the services it can offer.

East West Bancorp, the largest Chinese bank in America, has $10.7 billion in assets. It serves a Chinese population of only 3.4 million. OneUnited, the largest black-owned and managed bank in America, has only $650.4 million in assets. East West is 16.5 times larger, and it serves a much smaller population.

It makes good business sense, but it should also be a source of ethnic pride to put your money on deposit in OneUnited Bank.

“It’s my responsibility
to put my money here.”