Black investors announce historic deal with Utah bank
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Redemption Holding Company, a Delaware-based, public-benefit corporation started by a group of prominent Black investors, announced this week plans to acquire Utah’s Holladay Bank & Trust.
Why it matters: If the deal gets federal regulatory approval, it'll mark the first time in U.S. history that Black investors acquire a nonminority-owned bank and convert it into a Black-owned bank, RHC said in a news release.
- It would also become the only Black-owned bank in the Mountain West region, per RHC.
- As of December 2022, 21 Black banks remain in the U.S., according to data from the Federal Deposit Insurance Corporation.
Details: Ashley Bell, a former Trump White House adviser who'll serve as RHC's executive chair and CEO, told Axios the nearest Black-owned banks to Salt Lake City are in Los Angeles and Houston.
What they're saying: "They function like most banks, however, they know that there are critical challenges that people of color have had in getting equal access to credit in our country," he said.
- He said among the strengths of Black-owned banks is they understand the financial disparities impacting Black Americans.
By the numbers: In 2019, the median wealth of Black households — not accounting for defined-benefit pensions — in the U.S. was $24,100, compared to $189,100 for white households, per a Center for American Progress report,
- Black borrowers are also twice as likely as the overall borrower population to have mortgage requests denied by lenders across the top 50 U.S. metros, according to a 2022 LendingTree analysis.
State of play: Bernice A. King, the daughter of civil rights activist Martin Luther King Jr., will serve as the bank's senior vice president of corporate strategy and alliances.
- The bank's co-founder and former NFL player, Dhani Jones will serve on the bank's board, with King.
- Ryan Smith, majority owner of the Utah Jazz and Qualtrics co-founder, is also an investor, according to Bell.
Context: The number of Black-owned banks in the U.S. has diminished since the late 1800s and early 1900s, when the financial institutions were at their peak.
- Historically, African Americans would seek Black banks to avoid racism and discriminatory practices at other financial institutions, according to a Library of Congress research guide.
Of note: Holladay Bank & Trust, a woman-run, state-chartered commercial bank, was founded in 1974. Bell noted the bank would keep its current staff.