I've been waiting for this for a while. Black celebrities finally have the hutzpah to open a minority focused bank. Even with cutting the brick and mortar costs this will be monumental task and is likely to fail. But at least someone in that community is finally putting their money where their mouth is. I wonder why Oprah, Lebron, or Kaep haven't dove into this before? Because they know the numbers suck. It will likely need a constant infusion of capital to keep it afloat. In the end it will probably only be viable with "community grants". The reason minorities can't get mortgages at the rate of whites is not racism. It is lower credit scores and lack of assets for down payment/closing costs. There is very little margin in mortgage lending these days and even less in small balance deposit and checking accounts. They are going to find out that the existing banks aren't being racially biased, they're just trying to find profitable lines of business. Lending to customers with $150 in the bank and wanting to buy a $90K home just don't feed the bulldog. Killer Mike's Greenwood Black-owned bank receives "tens of thousands" of account requests in less than 24 hours - CNN
They gave raised 3 million in 2 years? Gonna need a lot more but good luck to them. Taxpayers should not bail them out
There have been several of these over the years. Properly run, they make a lot of money percentage wise over the big boys. For 30 years, the most profitable bank in Texas was in a minority neighborhood, and while not minority owned, it had some powerful minority directors. One in Houston that never turned a profit, yet the feds always looked the other way.
but "properly run" means charging a 580 FICO about 150bps more than a 660 FICO and that is the very thing that these sort of new-minority focused banks are claiming is wrong with the established banks. They're going to find out pretty quickly that 580 credit is based on 580 payment history. Doesn't take very many mortgages going bad to undo the portfolio.
The minority community does not care about the interest rate. All they care about is the monthly payment. As for minority owned businesses, that's a different animal that my experience with would crash this board. Not bad experiences, really great experiences, but what THEY taught me would be unthinkable to the liberal community.
Killer Mike's heart is in the right place. But. He is a raging Marxist, and now a bit of a hypocrite.
That is why he is a hypocrite. Marx was against banks and money. Killer Mike likes to make money though while at the same time bad mouthing the economic system that he benefits from.
