With Black-Owned Banks Nearly Extinct, Some Are Leading the Fight to Save the Last One in New York

Michael Pugh
Michael Pugh

Harlem’s renaissance is impossible to miss. Starbucks and Banana Republic line 125th Street. Whole Foods is coming. Marcus Samuelsson’s Red Rooster restaurant draws gourmands from everywhere, and busloads of tourists come to hear gospel choirs in the churches. But one important uptown institution has missed the revival: Carver Federal Savings, the nation’s largest African-American-founded bank and the bedrock of the neighborhood’s business scene for 67 years.

Like other black banks, Carver was hit especially hard by the financial crisis, which disproportionately hurt its African-American customers. It weathered the storm thanks to extraordinary intervention by the federal government and a group of big Wall Street institutions. Now it is crawling out of its bunker, and new Chief Executive Michael Pugh has a simple message to the community: Come back.

“I invite you to check us out if you haven’t done so for a while,” he told members of the Greater Harlem Chamber of Commerce last week.

Whether there is a place for Carver, the last black bank in New York, is a question facing black banks nationwide. Since 1987, three-quarters of the nation’s 91 African-American banks have disappeared. The most recent casualty came last month, when regulators closed Atlanta’s Capitol City Bank & Trust after years of losses. In January, Chicago’s Highland Community Bank met the same fate.

The collapse of so many African-American banks has alarmed black leaders, including those inside the Obama administration, who are only now taking measures to save the 24 that remain in the United States. Most of the banks are small and struggle to make money, but their defenders argue they must be preserved because they remain career launching pads for minority and women bankers, in addition to having long histories of providing credit to consumers and entrepreneurs who couldn’t get it anywhere else.

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