Would a Black-owned bank in Utah help those excluded from access to financial services?
The face of bank ownership in Utah is changing.
A group of black investors is acquiring Utah-based Holladay Bank and Trust. The deal by Redemption Holding Company marks the first time an existing commercial bank would become a Minority Depository Institution via acquisition.
According to the Federal Deposit Insurance Corp., a Minority Depository Institution is a formal federal designation for banks and credit unions that are either owned or directed primarily by African Americans, Asian Americans, Hispanic Americans or Native Americans. Minority individuals make up 51% or more of voting stock.
The move is welcomed by Utah's Black Chamber of Commerce.
"When you look at Black-owned banks in other parts of the country, what they really do is have the opportunity to provide what we truly call community banking,” said President and Chamber CEO Sidni Shorter. “And when we define community from a diverse culture, it does come with a certain set of understandings that for especially for Black businesses and I'll speak from a chamber perspective, that it's critically important to have a banking relationship where there is someone that understands some of the challenges that you have just being in business."
Shorter is hopeful this will lead to more opportunities to establish a banking relationship with small minority business owners as well as those looking at other financial products like a home loan.
Redemption Holding Company is led by former White House Policy Advisor and Small Business Administration Regional Administrator, Ashley D. Bell. Dr. Bernice A. King, daughter of the late Dr. Martin Luther King, Jr. and Coretta Scott King will serve on the corporation's advisory board.
Bell told The Hill that Redemption will serve as a lifeline to the next wave of Black and Brown first-time home buyers and small business entrepreneurs across the country.
Figures from the U.S. Census Bureau show that African Americans only make up 1.5% of the population in Utah. Hispanics are 14.8% of the population. Digging further into 2021 American Community Survey data from the bureau, Black homeownership in Utah sits at 0.4%, and with Hispanics, it’s at 9.7%.
For My Home Utah LLC owner Justin Moody, having a Black-owned bank in Utah is a step forward for minorities in the state. Moody said one of the reasons he got into real estate was to help minorities have a chance of realizing their dream of owning a home.
"You know, when you're a client, you make good money, you have a job and you just don't get passed along to a lender. I think that was the issue that Utah was dealing with. But it's starting to take shape and people are actually starting to take notice and it's starting to change."
Moody said lenders need to be more open to people of different backgrounds. In the meantime, he encourages future home buyers to educate themselves on the resources that are available through the state.
"They have government programs not only for minorities but for everyone — where it's basically they'll give you your down payment. Most people think that, ‘oh, I got to have an 800 credit score.’ Or, you know, a million dollars in the bank, and we're not that," Moody said.
At this point, it's unclear how Redemption Holding Company will work to ease any real estate barriers for minorities in the state. The Utah Black Chamber is hopeful though it will provide another option for individuals who may have been denied financial support elsewhere.
It’s something Shorter said happens more often than not.
"And one of the things that we advise them on, if you are banking with an institution and you just get a no, you have a banking institution, you don't have a banking relationship. Because it's advantageous to get to a yes because getting to the yes gets you as a customer what you need, but it also gets the bank your business."