• Home
  • Archive
  • Media Kit
  • Contact Us
  • May 8, 2025

The Madison Times

The Paper That's More Than Black and White

  • News
    • Local News
    • National News
    • International News
    • Sports News
    • Education News
  • Columns
    • Columnists
    • Editorials
    • Letters to the Editor
    • Life Lessons with Alex Gee
  • Events
  • Health
  • Finance
  • Lifestyle
  • Classifieds
  • Community
    • Middle Spread
  • Milwaukee

Share this:

  • Tweet
  • Click to email a link to a friend (Opens in new window) Email
  • Click to print (Opens in new window) Print

Black Banks Struggle to Survive, Part 2

June 17, 2016

By Patrice Gaines
Urban News Service

black-man-wearing-suitLeah Chase recalls a time when she couldn’t get a loan from a white-owned bank to expand her now-legendary New Orleans restaurant.

“I remember my husband going to a bank we used for years,” said Chase, 93. “When we went to get a loan, we couldn’t … This was in 1957, and we wanted to make the restaurant bigger.

“Then Liberty Bank came along,” said Chase, referring to the black-owned Liberty Bank and Trust, headquartered in New Orleans. The Chases got a $150,000 loan from Liberty to remodel their Creole eatery, Dooky Chase’s Restaurant. Chase has 15 employees today, “sometimes more,” and has fed “the Jackson Five, Duke Ellington, the Freedom Riders … President George W. Bush and President Barack Obama.”

“We were able to visit the president of the bank,” Chase said of her first experience with Liberty. “We could never do that before. It was unbelievable.”

Ironically, while the number of black-owned banks dwindles, studies show that black consumers could benefit greatly from the personalized services that these banks still offer. There reportedly were more than 130 banks owned by African-Americans between 1888 and 1934, according to the Federal Deposit Insurance Corporation. There were 48 in 2001. Today, there are 22.

But while Chase remains faithful to Liberty, which operates in eight states, generations of younger black entrepreneurs and potential bank customers do not share her loyalty to black-owned banks, or any bank.

An FDIC report last month found that half of all African-American and Latino households are disconnected from the formal financial system, compared to one in five white households. This means blacks often pay more to cash checks, buy money orders and conduct other transactions. Studies and legal victories demonstrate that major financial institutions regularly discriminate against blacks.

The Consumer Financial Protection Bureau and the Justice Department found that Fifth Third Bank discriminated against black and Hispanic borrowers receiving auto loans. “Fifth Third charged borrowers higher interest rates because of their race or national origin and not because of the borrowers’ creditworthiness or other objective criteria related to borrower risk,” according to a Justice Department press release. An American Civil Liberties Union report last year found that between 2007 and 2011, black households had higher foreclosure rates, but these consumers also had more costly, riskier loans.

In spite of a long record of discrimination by many major financial institutions, blacks still hesitate to support black-run banks, said Michael A. Grant, president of National Bankers Association, the trade organization for minority and women-owned financial institutions.

“We found out a lot of African-Americans with good credit will go to majority banks and, if turned down by all, they come to us. They should come to us first. History shows if your credit is decent, you have a better chance to get a loan from an African-American bank. They will counsel, take more time with their customers.”

Personalized service always has been a staple at Liberty. “You are not part of a procedure,” said Alden McDonald, Liberty’s CEO and president. “Our procedures are flexible enough to make things work. When someone is coming to buy a house, we sit down with them to make sure they know what they are doing. Most customers we loan money to have credit ratings under 700.” A credit score above 700 “suggests good management,” according to Experian credit reporting agency. Some lenders raise interest rates dramatically for customers with scores of 699 or lower.

In Detroit neighborhoods, where a flurry of renovations goes on, McDonald said Liberty even helps people make wise decisions about contractors.

“Contractors have gone in and taken advantage and given high prices and left people in a hole,” he said. “We applied what we did in Katrina. We helped people realize the amount of money they needed to renovate was something they could afford. We even bring someone in construction to help them price out the work on the house before they get a contractor, so we can see if the contractor is really telling them what they need. We monitor the process. It costs us more but we are doing what we need to do to make sure people don’t get in trouble, so we get our money back.”

Leah Chase recently sent her granddaughter to Liberty Bank. “She is remodeling a house,” said Chase. “The president showed her what to do, how to get the loan. You feel there is somebody who has your interest.”

Share this:

  • Tweet
  • Click to email a link to a friend (Opens in new window) Email
  • Click to print (Opens in new window) Print

Popular Interests In This Article: Banking, Black Banks, Patrice Gaines

Read More - Related Articles

  • Akwaaba Means “First in Black-Owned B&Bs”
  • Where Did The Black Banks Go?
  • Banking Exec Earned His Money
    Banking Exec Earned His Money
  • Why We Must Fight for Environmental Justice for People of Color in 2016
  • Federal Judge Upholds Fearless Fund’s Grant Program for Black Women Entrepreneurs


Connect With Us

Become Our Fan On Facebook
Find Us On Facebook


Follow Us On Twitter
Follow Us On Twitter

Editorials

Karma Chavez
Amanda Zhang
Julianne Malveaux
Benjamin Chavis
George Curry

Journalists

Jacklin Bolduan
Brianna Rae
Aarushi Agni
Rob Franklin
Claire Miller

Topics

Brown Girl Green $
Young Gifted & Black
Universally Speaking
Ask Progress
Civil Rights

Topics

Police Shooting
Police Brutality
Black Lives Matter
NAACP
Racism

Politicians

Barack Obama
Hillary Clinton
Gwen Moore
Paul Soglin
Scott Walker

Contact Us

Phone:
414-449-4860

Copyright © 2025 Courier Communications. All Rights Reserved.
We use third-party advertising companies to serve ads when you visit our website. These companies may use information (not including your name, address, email address, or telephone number) about your visits to this and other websites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here.