There is a new Black-owned bank on the horizon. This news comes at a time when Black-owned banks that are backed by the Federal Deposit Insurance Corp. are dwindling.
Black investor group Redemption Holding Co. recently purchased Utah-based Holladay Bank and Trust. The new bank is pending regulatory approval. The deal was announced in late February. The bank is based in Holladay, a suburb of Salt Lake City.
The Loss of Black Banks
There were fewer Black-owned FDIC-backed banks in 2022 then there were in 2002, going from 47 to 16, approximately a 66 percent decline, Banking Dive reported.
These 16 existing Minority Depository Institutions (MDI) make up less than .03 percent of all FDIC-insured financial institutions.
According to Axios’ estimation, which the outlet used the Federal Deposit Insurance Corporation as a source, there are 21 FDIC-insured Black banks remaining in the states in 2022.
This, however, is a 55 percent decline compared to what was available in 2002.
“Black banks make the American dream possible for all Americans by deploying resources that uniquely address the financial realities of communities that have been systematically excluded, overcharged and undercapitalized for hundreds of years,” Ashley D. Bell, a former White House policy adviser for entrepreneurship under President Donald Trump, told the outlet.
Redemption Holding’s New Bank
Bell is also the Small Business Administration regional administrator for Redemption Holding Co., a group of for-profit Delaware-based businesses, created by Black investors who are professionals in the health, legal, tech and finance industries.
The acquisition of the non-minority-owned bank, marks a historic win for those living in the Mountain West region – it is the only Black-owned bank of its kind in the area.
“Redemption will serve as a lifeline to the next wave of Black and Brown first-time home buyers and small business entrepreneurs across the country,” said Bell.
Part of the deal in acquiring Holladay Bank & Trust is that RHC will keep the current management and staff. The Wall Street Journal reported the Salt Lake City white bank held roughly $68 million in total assets and $56 million in total deposits at the end of 2022.
One of the daughters of Dr. Martin Luther King Jr., Dr. Bernice A. King, was one of those who led this effort alongside Bell.
“In my father’s last public address on April 3, 1968, he preached the imperative to accelerate the financial inclusion of Black Americans by supporting mission-driven Black banks — something he called a ‘bank-in movement,’” King said. “More than half a century of struggle and incremental progress later, we’re making good on daddy’s call to bank-in by creating new centers of opportunity for people of color, starting with this Black-led bank acquisition. Redemption is just that: delivering families from the cycle of unjust financial exclusion and intergenerational poverty.”