WASHINGTON – Ron Busby appeared reflective as he sat at the mahogany board room table at Industrial Bank, a black-owned establishment, based in North West Washington, D.C. Busby, the president/CEO of the U. S. Black Chamber Inc. (USBC) then summed up his thoughts in one sentence:
“This is a game changer,” he declared.
Amidst an economic downturn that has pulverized segments of the black community with record unemployment and loss of wealth across the nation, Busby had just opened a U. S. Black Chamber account with Industrial. The deposit was a calculated move to start a new relationship that he hopes will spread into a national movement that will strengthen black financial institutions and ultimately uplift the community at large.
“If you really look at the statistics in reference to not only Industrial, but other minority and black-owned banks, you’ll see that they are in our communities; they lend money to our businesses as well as our local communities,” Busby said.
“It is game-changing, because now you have a national organization that’s not just talking about a solution but is actually actively participating in the solution.”
Founded by Jesse H. Mitchell, Industrial started with six employees and $192,000 in assets in 1934 and now has 150 employees and more than $333 million in assets.
Busby said, “We will probably do about a half million dollars of business a year that will run through this particular bank.”
The 4-year-old Black Chamber, Inc. boasts about 108 chambers in 22 states and 240,000 members – mostly black-owned businesses.
“The more deposits we have, the more we’re able to lend out,” says Industrial President/CEO B. Doyle Mitchell Jr. “In order to grow, you’ve got to have deposits.”
Mitchell, also chairman of the National Bankers Association (NBA), envisions a spread of the movement.
“I see it as an encouragement to other black national organizations and black companies to do more business with each other, because I think we trail everybody in trying to do business with each other and keeping money in our own communities,” Mitchell said.
Mitchell and Busby both serve on the Small Business Administration’s Council on Underserved Communities, where they first began this conversation. Now they are strategizing with Michael Grant, president of NBA, which has a membership of 37 mostly black-owned banks.
Grant listed several major black organizations.
“All of these organizations have constituencies that go all over America, all of these organizations handle money and their members handle money,” Grant said.
“You start with the leadership of these organizations and you say, ‘Listen, we need to do a better job at harvesting our own wealth. Yes, we want to look to politicians to do things and yes we may ask the corporations to be more fair about their hiring and their contracting and so forth, but what are we supposed to do?'”
Their answer is a “national action plan,” in which black chambers – and ultimately black businesses and black organizations – will be encouraged to open accounts in black banks. Among the initial cities are Phoenix, Ariz.; Austin, Texas; Atlanta, New York City, and Detroit.
Busby points out the strategy is part of the USBC’s “solution-oriented” mission statement, which deals with supporting African-American businesses and banks based on five pillars:
*Advocacy: Fighting for legislation, programs and policies that promote small business growth.
*Access to capital: Creating avenues “by which Black businesses can gain greater access to credit, capital and other financial instruments.”
*Contracting: Helping members “gain access to business opportunities” in private and public sectors.
*Entrepreneurial training: Assisting black business leaders in achieving “stellar performance and growth through entrepreneur and business management training.”
*Chamber development: The growth and expansion of new chambers around the nation.
“The Civil Rights Movement was the last time that over time we came together and we all got some kind of agreement – if you will – on one accord about what we wanted,” Grant said.
“The Civil Rights Movement ended up changing a lot of people’s minds and attitudes because the reward was so close in front of them. If you want to change behavior, you have to use positive reinforcement so that rewards for the new behavior are strong enough.”
Economist Julianne Malveaux lauds the plan, but says prospective participants must ask hard questions in order to hold the banks accountable.
“This is a very welcome move, because only one in 10 black dollars goes into black entrepreneurs and banks,” Malveaux said.
“So, whereas a dollar may turn over seven or eight times in other communities that invest in themselves, the African-American community’s dollar may turn over only once; then go right out.”
She said the success of the movement will be contingent upon whether black banks are serious about spreading the wealth in black communities.
“There are a series of questions that people who are changing accounts will have to ask, and those are questions that minority banks will have to answer,” Malveaux said.
“Like, for this support, what are you offering? Is this support simply rhetorical or does this mean more lending in the black community? Does it mean more opportunity for our young people? Does it mean more employment for our young people?”
