By Mehrsa Baradaran
A Book Summary by CUEvangelist – February 19, 2024
“The Color of Money: Black Banks and the Racial Wealth Gap” by Mehrsa Baradaran delves into the complex history and current state of accessing capital in African American communities. This book explores the deep-rooted racial wealth gap in America, highlighting how historical and systemic discrimination has influenced economic opportunities for Black Americans. Baradaran examines the role of Black banks, after the Civil War to their struggle to support economic growth within Black communities amidst a broader financial system that perpetuates racial inequalities.
She begins the book with the end of the Civil War and the “40 acres and a mule” promise given to recently freed slaves, a covenant that was never fulfilled. Unfortunately, this unfulfilled promise set the stage for the persistent wealth gap between White and Black Americans seen even today. Baradaran then traces the development of Black banks, starting with the Freedman’s Savings Bank, which was supposed to safeguard the earnings of Black Americans but ended in failure, continuing the distrust Black communities had with the banking sector.
Baradaran argues that Black banks were predestined to fail because they operated within a segregated economy that limited their growth and effectiveness. Despite the efforts of these banks, the systemic barriers in place made it nearly impossible for them to bridge the racial wealth gap. The author points out that without access to the same financial opportunities and protections as their White counterparts, Black Americans were often left with predatory lending as their only financial option.
The book also covers the civil rights movement’s impact on banking and finance for Black Americans, including the introduction of policies aimed at increasing economic opportunity, such as the Community Reinvestment Act. However, she points out that these measures were not enough to overcome the structural barriers that maintain the wealth gap.
Finally, “The Color of Money” is a critique of the racial wealth gap and the role of Black banks within it. Mehrsa Baradaran depicts the complexities of attempting to achieve economic success and equality within a system that is fundamentally unfair and unequal. She calls for more comprehensive solutions that address the root causes of the racial wealth gap rather than relying on Black banks to solve systemic issues. This book provides a compelling overview of the history and challenges of Black banking and offers insights into the broader struggle for economic justice and financial inclusion in America.
Mark S. Brantley, Esq. is currently known as the CUEvangelist – “Spreading the Good News About CUs!” Mark was the former vice-chairman of the AACUC, former board member of CUNA, and former Chairman of the Municipal Credit Union. He has written numerous articles and white papers on credit union advocacy, legislative, and regulatory matters.
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