In a release on Twitter, Kevin Davenport, Virginia State University’s Chief Financial Officer, announced that President Makolah Abdullah would be establishing a personal banking relationship with Virginia State University Federal Credit Union, which is the fourth largest HBCU-based credit union with $8.6 million assets.
It is a move that is prominent after the massive banking black movement began last year. Noted web traffic to HBCU Money would spike anytime there was a police shooting last year to our African American Bank and Credit Union directories. Many African American owned banks and credit unions reporting thousands of accounts being opened and millions of dollars being moved as African Americans looked to take more ownership of their economic power. The movement also coupled with years of financial abuse by banks like Wells Fargo, Bank of America, and others towards the African American community.
The decision by President Abdullah is an important moment as college presidents tend to be more a more financially affluent group. Financially affluent African Americans have often been a group that has been missing among African American owned financial institutions as clients, leaving many institutions to try and survive by piecemealing less financially stable customers and contributing to decades of stagnant products and services offered. We hope this will spur many other HBCU presidents to move their banking relationships and continue to set the example for their students and our community that in order to build a stronger African American ecosystem our institutions, all of them, need our support, investment, and patronage.
Of course, the major missing piece is moving institutional accounts. HBCUs control billions in institutional money and could significantly enlarge the $10.4 billion that is now controlled by 339 African American owned banks and credit unions left. However, very few African American financial institutions are capable of handling institutional accounts. Currently, OneUnited Bank, the largest African American owned bank or credit union with $648 million in assets, has two HBCUs, Roxbury Community College and Florida Memorial as institutional clients. As the banks and credit unions become more stable with growing deposits from individuals, then they will be able to offer the more complex products that institutions and businesses need. So while President Abdullah maybe just one account, the halo effect could begin a second wave in the #BankBlack movement in 2017 and beyond.