Black financial services and regulatory experts have announced the launch of a new fund aimed at creating tens of millions in tier 1 capital for Black-owned banks.

With support from LendingTree, Dentons, KPMG, Comer Capital, and others, the Black Bank Fund will purchase $250 million in non-cumulative, non-voting, preferred stock in Black-owned financial institutions — purchases that will immediately translate into tier 1 capital, enabling the banks to make $2.5 billion in new loans to underserved borrowers. In addition, a National Black Bank Foundation will be created to raise public awareness about the critical role these Black-owned banks play in providing financial literacy and wealth-building programs for underbanked people of color. 

According to the FDIC, the number of Black-owned banks has declined by more than half, to only eighteen, since 2011. The lack of access to basic financial services has forced many African-American households to rely on costly alternatives such as check-cashing services, payday loans, money orders, and prepaid credit cards. 

"Black families can't build wealth through home equity and Black entrepreneurs can't create jobs because they can't access capital from their neighborhood bank," said Tishaura Jones, National Black Bank Foundation co-founder and treasurer for the City of St. Louis. "In cities like St. Louis, just like in New Orleans and Washington, D.C., the work of uplifting Black banks is both urgent and vital."

"We've spent the last year speaking candidly with leaders of Black banks to understand the structural and specific challenges facing the sector, and each of them pointed to their comparatively small assets," said Brandon Comer, Black Bank Fund co-founder and managing partner of Comer Capital Group. "The Black Bank Fund and [National Black Bank] Foundation provide a holistic solution that addresses the banks' ability to extend credit to Black borrowers meaningfully while fostering sustainability and growth."

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