Of the 44 Black-owned banks and credit unions in the U.S. with approximately $8.12 billion in assets, none are in Minnesota. That changes today, when Minnesota’s first known Black-owned bank, First Independence Bank, 3430 University Ave. S.E., Minneapolis, opens for business.
“We know that banks represent beacons of hope,” said Kenneth Kelly, chairman and CEO of First Independence Bank. “You can’t go to any major city in this country and not see the largest building in this city having a bank name on it.”
Being a “beacon of hope” was the original mission of the bank, which was first envisioned by the Detroit-based founders in the wake of the chaos that took place in Detroit during the riots of 1967.
Since the death of Floyd, Kelly said he and First Independence leadership saw similar parallels between post-1967 Detroit and post-George Floyd Minneapolis, and a similar opportunity to provide paths toward financial stability for Black Minnesotans.
There are stark financial disparities in Minnesota for First Independence to attempt to tackle. Perhaps the most glaring is the gap between white and Black homeowners in the metro area, which is more than 50 percent according to the Minnesota State Demographic Center.
“There’s a really disturbing litany of statistics about the disparities within our economy,” said Minnesota Department of Commerce Commissioner Grace Arnold. “Some people are being left out.”
Arnold said different communities have different needs and go about their finances in different ways. She said her goal is that the state supports the sorts of entities that address the financial needs of specific groups. “What (First Independent’s opening) allows for is a couple of things,” said Arnold. “One is its wealth creation within the state. But it’s also a bank that is serving a need, filling a gap that currently exists.”
Kelly said just about every disparity can be traced back to economic issues. He said he wants the bank to help untangle those issues for Black people – as well as anyone else. “We’re Black-owned but not Black-only,” said Kelly.
Also, First Independent has come to Minnesota because the state has a lot of money.
“The resources in Minneapolis are bountiful,” said Kelly. “The area has a high per-capita Fortune 500 base. That’s also attractive from a business perspective. But what we also know is that has not been equitably distributed in terms of when you look at it along the demarcations of race, etcetera. What we want to do is be a voice for inclusion. We want to be a voice for demonstrated diversity.”
Damon Jenkins, senior vice president, who was partially raised in Minneapolis, graduated from Minneapolis South High School, and has prior bank experience, will handle the day-to-day for First Independence’s inaugural Minnesota branch. He said his approach is “about growing the bank, partnering with the community and beyond.”
In a unique arrangement of competitors as partners, First Independence has partnered with five Twin Cities banks: Bank of America, Bremer, Huntington, U.S. Bank and Wells Fargo. The site of Minnesota’s First Independence is a shuttered Wells Fargo not far from the University of Minnesota campus that was gifted to the nonprofit, Project for Pride and Living, which in turn is leasing the space to First Independence.
“I’d argue (partnering with large banks) is an unprecedented move in the banking sector that illustrates the commitment to using all resources to power the potential of others,” said Jenkins, adding that he is actively looking for additional partnerships that can bring more expedient equity to people who have “been cut out.”
First Independence, back in Detroit, largely did business in commercial lending, some residential lending as well as business leasing for equipment. Those are the three cornerstones, said Kelly, but, as the bank has partnered with larger banks, First Independence has added merchant services and services for the growth of non-interest income.
The plan is to replicate that in Minneapolis. “But markets are very different,” said Kelly. “We might not do the same thing to the exact same proportion.”