About 16% of Native American households, 14% of black households and 12% of non-white Hispanic households do not have bank accounts, compared to 2.5% of white households, according to a survey of Federal Deposit Insurance Corp. of 2019 on the unbanked. .
Minority banks help close this gap by serving more low- and moderate-income areas than other banks, according to a 2019 FDIC report on minority deposit institutions, or MDIs. For example, the majority of the population served by the typical black-owned bank, 62%, is African American, compared to 6% of non-MDI metro area banks, according to the report.
Additionally, banking deserts, or areas of the country where one must travel miles to find a bank, have historically been a problem for some racial and ethnic groups, including Native Americans living on reservations.
“We work with people who are often out [of the banking system]and they become loyal customers,” says TW Shannon, CEO of Chickasaw Community Bank, one of 17 Native American-owned banks.
2. Boost wealth with home loans
Homeownership is one of the biggest contributors to wealth for many, but it primarily benefits white Americans. Asian and black borrowers made about 6% and 7% of U.S. home purchases, respectively, compared to 60% of non-Hispanic white borrowers, according to a 2019 mortgage market report from the Consumer Financial Protection Bureau. Native Americans accounted for less than 0.8% of home purchases.