ICYMI: How 'Progressive' Policy Weakens African-American Banks
By Carrie Sheffield, April 09, 2015 Forbes
The Washington Post and other outlets have highlighted the decline of banks owned by African-Americans, however coverage hasn’t connected that trend with post-recession Dodd-Frank regulations that accelerate the decline of community banks. The balance sheets of black-owned banks, along with minority-owned banks generally (which the government calls Minority Depository Institutions (MDIs)), are similar to general community banks, according to the Federal Deposit Insurance Corporation (FDIC) relying on core deposits to fund loans heavily weighted in residential and commercial real estate.
A recent Harvard study found that while the number of community banks was already declining before the financial crisis, since the second quarter of 2010 – Dodd-Frank’s passage – community banks have lost market share at a rate double what they did between Q2 2006 and Q2 2010.
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