This is the fourth post in our “Then & Now” series in which we highlight an example of business-related discrimination in Black history and pair it with a similar event(s) during our modern day. We share these comparisons to demonstrate the continuing fight for Black justice after the passing of the 1964 Civil Rights Act. Despite popular conceptions of America existing as a “post-racial” society, racism lives—and thrives—to this day, representing the need to further our pursuit of equity for all.
Throughout US history, Black individuals have experienced numerous examples of racial discrimination and general difficulties at financial institutions. This history comes into focus during the 1860s around the time slavery was abolished and Black Americans were granted citizenship (due to the Thirteenth and Fourteenth Amendments, respectively). Specifically, in 1865, the US government chartered the Freedman’s Savings Bank, meant to provide Black individuals with both a safe place to deposit their income and basic financial education, services denied to them previously.
Freedman’s Savings Bank started off well. Tens of thousands of Black customers collectively deposited millions of dollars into the bank, thus encouraging the financial institution to open branches across the country. But due to the volatile post–Civil War economy and mismanagement by white bank executives, who handled the Black customers’ savings riskily and inappropriately, the financial institution collapsed in 1874, leaving depositors in a precarious situation. Though the bank promised to return a portion of the savings lost to its Black customers, most individuals received either pennies on the dollar or nothing at all.
“Freedman’s Bank Beaufort So. Ca.” by Hubbard & Mix (1863–1866). Public domain.
The collapse of the Freedman’s Savings Bank helped promote a distrust of the financial services industry among Black Americans—and for good reason. Over the next century Black individuals would be regularly denied mortgages or auto loans, and if a credit line were successfully opened, the fees were often higher. Unfortunately, Black credit seekers experience similar examples of discrimination from financial institutions to this day.
Even using a bank can be dangerous for a Black customer. Several instances of blatant racism have occurred in recent years at some of the country’s most well-known banks. At the end of 2021, Hopkins order picker Joe Morrow went to a U.S. Bank branch in Columbia Heights, Minnesota, to deposit his paycheck after a 12-hour shift at work. Despite having an account with the bank and his ID on him, Morrow was suspected by a branch bank manager of attempting to cash a fake check. The bank manager finally verified the legitimacy of Morrow’s check, but only after the 23-year-old Black man was removed by police, threatened with arrest, and placed in handcuffs.
“U.S. Bank Tower Building, Lincoln, Nebraska” by Tony Webster (2018). Licensed under CC BY 2.0.
In another example from 2018, Clarice Middleton tried to cash a $200 check at a Wells Fargo branch in Atlanta, Georgia, but three of the bank’s employees accused her of fraud and called the police. In that moment, Middleton thought, “I don’t want to die.” Although the police officer left without taking action and Middleton was eventually able to cash her check, the emotional and psychological scars remain. To make matters worse, after the incident, a Wells Fargo spokesperson claimed that Middleton started to shout “abusive and profane language” (she didn’t), effectively gaslighting her.
The history of Black banking in America is a reminder that many basic services, such as access to a savings account, remain difficult for customers of color who continue to be racially profiled and treated disrespectfully by employees. At Inclusive Journeys, we condemn this discriminatory behavior and aim to cultivate a safer banking environment for Black and brown individuals. We encourage users to leave reviews of their experiences at banks, whether positive or negative, on the Inclusive Guide so that marginalized customers may know which financial institutions are safe for them to visit—and those which may not be. We also want to uplift the Black-owned banks that strive to make the financial services industry more welcoming and accessible to customers of color.
Help us foster a better banking culture for Black and brown individuals. You can join our fight for justice by leaving a review on inclusiveguide.com and donating to our GoFundMe campaign at gofundme.com/f/digital-green-book-website.
Flitter, Emily. “‘Banking While Black’: How Cashing a Check Can Be a Minefield.” The New York Times, 18 June 2020, nytimes.com/2020/06/18/business/banks-black-customers-racism.html. Accessed 12 Feb. 2022.
“The Freedman’s Savings Bank: Good Intentions Were Not Enough; A Noble Experiment Goes Awry.” Office of the Comptroller of the Currency, occ.treas.gov/about/who-we-are/history/1863-1865/1863-1865-freedmans-savings-bank.html. Accessed 12 Feb. 2022.
Rasmussen, Eric. “‘Banking While Black’: Police video shows how cashing a paycheck led to handcuffs.” 5 Eyewitness News (KSTP-TV), 7 Dec. 2021, kstp.com/kstp-news/top-news/banking-while-black-police-video-shows-how-cashing-a-paycheck-led-to-handcuffs/. Accessed 12 Feb. 2022.
Williams, Mariette. “After years of banks overcharging and undervaluing Black customers, ‘banking Black’ is gaining popularity as an effective way to fight systemic racism.” Business Insider, 22 Feb. 2021, businessinsider.com/personal-finance/banking-black-americans-switching-banks-2021-2. Accessed 12 Feb. 2022.