Black lawmakers push bill to bolster minority-owned banks
The co-chairs of the Congressional Black Caucus Economic Development and Wealth Creation Task Force have introduced a bill designed to support minority owned banks and increase access to affordable financial services.
Reps. Dwight Evans (D-Pa.), Gregory W. Meeks (D-N.Y.) and Joyce Beatty (D-Ohio) have proposed a bill that would enhance the Minority Bank Deposit Program, which encourages federal agencies to use minority-owned banks and low-income credit unions as financial agents and depositories.
MBDP was created in 1969 to help minority-owned banks access funding to provide loans within their communities, many of which are under-served and lacking affordable financial services.
The caucus’ task force took on the challenge to reform MBDP after recent reports in the Wall Street Journal found that “the 2008 recession hit the Black banking sector especially hard. The article noted that “Black-owned banks could disappear entirely within the next eight to 12 years.”
“Making access to capital and credit a reality for all small business owners and entrepreneurs should be a reality for each and every individual in our neighborhoods. This is an issue too many individuals in our neighborhoods struggle with, specifically in our minority communities,” Evans said in a news release.
“In our commonwealth, the Pennsylvania MBDA Business Center has generated over $290 million contracts and financing, and created hundreds of jobs since 2004,” he said in reference to the Minority Business Development Agency.
“The numbers don’t lie—they clearly demonstrate the viability of a model that creates jobs, spurs economic growth and facilitates community investment,” said lawmaker, who represents the state’s 2nd Congressional District. “I am pleased to join with my colleagues to introduce the Minority Banking Deposit Program, which reinforces, strengthens, and modernizes these critical financial institutions.”
Although more than 80 minority banks and low-income credit unions are certified to work with the federal government under the MBDP program, most of them do not have any direct business dealings with the federal government.
“Limited access to affordable financial services is a persistent problem in my community, and many other underbanked communities around the US. Since the financial crisis, over 5,000 bank branches have closed their doors, leaving communities like mine with less safe and costlier financial services options,” Meeks said.
“Our bill strengthens minority-owned banks, improves the financial health of the communities in which they serve, and provides more Americans with reliable and affordable banking options. I urge all of my colleagues to join us in this effort,” he added.
“Since the 2008 financial crisis, the number of minority-owned and women-owned banks and credit unions have plummeted, leaving countless businesses and families in the surrounding communities with few, if any, financial options to start or grow their business — much less help to get a home or a car loan,” Beatty said.
“That is why it is critical that Congress pass legislation supporting the Minority Bank Deposit Program to ensure all American entrepreneurs and families have equal opportunity at achieving their American Dream,” she said.