Many are concerned about the future of banking for African Americans and where they keep their money considering the impending debt limit crisis that threatens America’s fiscal status globally.
In March, SVB was the first to fail as rising interest rates lowered the value of the bank’s holdings.
With their demise, America avoided the largest bank failure since 2008, when Lehman Brothers’ collapse triggered the Great Recession. Dominic Mjarten, CEO of Optus Bank, a Black-owned bank formed by Black leaders in 1921, expressed great worry to Yahoo News about the impact on the community bank system.The FDIC reported that, of the more than 5,000 U.S. banks, just 25 are Black owned.
Forbes adds that the failure of banks, especially Silicon Valley Bank, which dealt with roughly half of all U.S. technology firms funded by venture capitalists, will have immediate and long-term effects on the Black entrepreneurial environment. But, Teri Williams, president of the Black-owned OneUnited Bank, told the Washington Informer that African Americans shouldn’t lose any sleep.
She noted that the FDIC insures all deposits up to $250,000 for individuals and $500,000 for joint accounts. Further, “if you have more than one bank account, you can look for ways to increase FDIC coverage,” she stated.“The average deposit at Silicon Valley Bank was $4 million. They had deposits of up to $500 million. There really was a lack of appreciation for the need to have multiple bank accounts or talking to your banker about whether you have FDIC insurance.
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