Lower Country Churches to Invest Thousands of Dollars in Black Owned Financial Institutions | New
It is more difficult for blacks than for other groups of Americans to obtain business loans, real estate financing, and high-paying jobs.
For more than a century since the end of slavery, African Americans have been systematically excluded from economic opportunities offered to the majority, resulting in a wealth gap between blacks and whites.
But the Charleston area hopes to be a leader in what has been a national effort to encourage people to invest in black-owned banks, institutions that could, in turn, support minority-owned businesses and low-wealth communities.
Five Charleston-area churches have pledged thousands of dollars to black-owned financial firms as part of an effort to close the wealth gap. Mount. Moriah Baptist Missionary, Royal Baptist Missionary, Charity Baptist, Mt. Zion AME and Grace City Church will soon be devoting 10% of their operating budget or savings to black-owned financial hunches, many of which were founded to provide Afro – Americans have better access to financial opportunities.
Pastors from several other churches have also verbally committed to discussing with congregations the possibility of doing the same.
This is not the first time that a place of worship in the Lowcountry has decided to transfer money from a white-owned bank to an African-American corporation. Royal Baptist took $ 20,000 of his savings two years ago and deposited it with the Charleston-based Community Owned Federal Credit Union in an effort to help strengthen the historic organization founded by the civil rights activist from the Charleston area, Esau Jenkins, and a group of visionaries in 1966.
But the current effort is a multi-church, multi-racial initiative that crosses denominational lines. These are some of the largest historic places of worship in the Tri-County region, which have long anchored their communities, serving as hubs of spiritual and social activity.
The investments will collectively total hundreds of thousands of dollars. Mount. Moriah pledged $ 200,000, Royal Baptist $ 20,000 and Grace $ 90,000.
Charity Baptist has yet to decide on an amount, but it will represent at least 10% of the church’s operating budget, Pastor Nelson Rivers said. Mount. Zion’s investment will be “tens of thousands,” said Reverend Kylon Middleton, the church’s pastor.
The size of the congregations is also worth mentioning. Mount. Moriah and Royal alone – both based in North Charleston – collectively have at least 5,000 members.
The effort is also taking place amid a wave of social unrest over systemic injustices and at a time when increased attention is being paid to racial disparities.
The ongoing coronavirus pandemic has also shed light on the plight of blacks and Maroons, with minority-owned businesses struggling to secure commercial loans to avoid shutting down.
Reverend Byron Benton, pastor of Mt. Moriah. Pastor of a church of more than 2,000 members, Benton hopes to start a movement that sees black and white places of worship use their funds to invest in black-owned banks, which in turn could better enable banks to investing in communities that have been systematically ignored. by financial systems.
For Benton, closing the racial wealth gap is about focusing on issues of education, crime, and health.
“It is about solving the problems that arise in our community,” he said. “Without correcting the racial wealth gap, it would be difficult to resolve these issues.”
History of systemic injustice
While slavery may mark America’s first attempt to rob blacks of any chance of success, economic injustices did not end when blacks were freed.
In 1863, blacks held 0.5% of the total wealth of the United States. More than 150 years later, the number has barely dropped to less than 2%.
“This gap dates back 400 years,” said Dominik Mjartan, President and CEO of Optus Bank.
It is not accidental. In many cases, this has been the result of systemic, intentional and even violent efforts to prevent black people from climbing the economic ladder. Obtaining bank loans, fair wages, decent jobs, and safe spaces to do business have all been complicated for African Americans.
Notable examples include:
- The 1921 Tulsa Race Massacre in Oklahoma left hundreds dead and 1,000 homes destroyed in a black neighborhood that once housed a variety of businesses.
- The efforts of the Federal Housing Authority, beginning in the 1930s, to allow segregation, with the FHA refusing to issue mortgages in and near black neighborhoods. This practice, known as redlining, stripped black families of one of America’s main mechanisms for wealth creation: homeownership.
- Continuation of discriminatory practices by financial lenders: A 2018 study from the University of California found that black and Latino customers are often charged 5.6 to 8.6 points of interest higher on mortgage refinance loans. This results in annual disparities of $ 250 million to $ 500 million.
Disparities have received increased attention in light of the coronavirus which has disproportionately affected minority communities. Few federal loans of more than $ 600 billion from the Paycheck Protection Program have gone to communities of color, in part because traditional lenders have prioritized large corporations, which are mostly white-owned.
Sandra Sims knows this all too well.
She and her husband own Columbia-based Carolina Concessions. When the federal government rolled out the Payroll Protection Program loans in April, Sims contacted his main bank, a large traditional financial institution.
There was no movement on his loan for over a month, but Optus reached out to The Sims just before the bill was finalized in early April. Within two weeks of congressional approval of the PPP loans, Optus had approved Sims for a payday loan.
She encourages all African Americans to invest at least some of their money in black-owned banks.
“Optus came for us when the general public (the bank) didn’t,” Sims said.
Start a movement
Optus was founded in 1921 by a group of African Americans who believed that everyone should have access to the American Dream.
The bank, one of 20 nationally designated as black-owned, says church investments will better equip the financial institution to intentionally seek opportunities to close the wealth gap, such as providing loans to those who could not get them others. banks.
More than 90% of dollars lent by Optus are donated to African-American and women-owned businesses, and more capital can better enable the bank to carry out this mission, Mjartan said.
A broader movement that focuses on investing in minority communities has the potential to reshape America, he said.
“Imagine if institutions like ours were 100 times the size we are today,” Mjartan said. “What would this country look like?”
Although Optus is not as big as the country’s major financial institutions, the bank has grown this year.
The bank’s assets have grown from $ 90 million before the pandemic to more than $ 160 million, Mjartan said.
The Charleston-area churches initiative doesn’t take away as much from some banks as it does to support a minority-owned business. African Americans have a long history of investing in white-owned financial institutions because they believe their money would be safer.
But if an African-American bank is federally insured, people should feel just as comfortable putting money into a black-owned financial group, said Reverend Isaac Holt, pastor of the Royal. Missary Baptist.
Pastors and financial experts also note that the initiative is twofold. While this involves providing banks with more capital, it also involves equipping individuals with skills in money management and credit creation.
This is because even though banks have capital, a person with a bad credit history may not be able to access those funds.
Increasing Hope, a North Charleston-based nonprofit of Dorothea Bernique, offers courses in credit rebuilding, foreclosure prevention, small business training, and tax preparation. Earlier this year, she partnered with Mt. Moriah and used dfree, a financial empowerment program, to teach more than 80 people techniques on achieving economic freedom.
Black people often don’t learn how to get good credit, which is unfortunate because American society is all about credit, she said.
“It is up to us to learn how the system works,” she said.
Pastors say that economic empowerment is also about instilling hope and showing people what is possible.
Some black neighborhoods in the Charleston area have been plagued by crime, failed schools and lack of economic investment. But if families have more access to capital, it could have a ripple effect and revitalize communities.
Holt said that increasing employment opportunities can lead to a reduction in criminal activity. It can also allow people to financially support candidates who have people’s best interests in mind, he said.
“Money doesn’t buy happiness,” he said. “But it certainly gives you a lot more options.”
The pastor said it could also help African Americans stay in neighborhoods that are increasingly threatened by gentrification which can drive up housing prices.