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Why you should be banking with Citizens Savings Bank and Trust Co. (TN)

The oldest continually operating MDI in the country, providing small business loans in Nashville

Recently we’ve often mentioned the importance of community development banking in small, rural communities which received little to no support from traditional or larger banking institutions. However, it’s not only rural communities which are repeatedly ignored by mega banks. Urban, predominantly black neighborhoods have too often been labeled as “unsafe for investment” by home lenders and banking regulators in a process called redlining, which has systematically prevented black families from building wealth through equity since the end of the first World War.

While some might argue that having a bank run both for and by a minority group is exclusionary in a way that seems counterintuitive, just because a depository institution is an MDI doesn’t mean that their white members don’t also receive excellent service. Additionally, improving the economic health of disinvested neighborhoods can only stand to benefit the whole of the city, as each community contributes to the economy of the greater region. By investing in MDIs and CDFIs, we get an influx of lending to the parts of our cities which need it the most, and while this may not greatly improve racial economic inequality, it at least keeps us from contributing to it, and ideally starts the process of closing the gap.

Although their name doesn’t exactly set them apart from the pack (there is an abundance of banking institutions called some variation of Citizens Bank, we featured one just last week), Citizens Savings Bank and Trust Co. is an undeniably important bank simply because they’re the black-led bank in the country with the longest uninterrupted history, being in operation since 1904. This would have been a particularly important institution in the decades after opening, as many businesses at the time, especially in the south, could and did refuse any kind of service to black customers.

Having started with just $1,000 in assets, collected from community leaders who founded the bank, they were able to survive the Great Depression and steadily grow their assets into the $100 million they have today. They have three locations, two in Nashville and one in Memphis. They prioritize personalized customer service, an extremely important thing when working with black members who have not necessarily had a positive experience with banking in the past. While they don’t publicize any community volunteer work on their website, they provide financial literacy courses targeted to students and even have a “kids corner” of their website to educate even younger people about responsible money practices.

Citizens Savings Bank and Trust Co. is a CDFI as well as an MDI, and they have a net loans to deposits ratio of 90%, meaning that 90% of their deposits are used for lending. While we don’t currently have DLI-HDMI data for this Better Banking Option, it’s clear from the fact that only about 10% of the lending is devoted to housing that they make small business loans a much higher priority, with it making up 36% of their assets. Also, because two of their three branches are located in low- and moderate-income neighborhoods, they obviously value their members with fewer assets.

This is a great Better Banking Option for anyone wanting to invest in black business in Nashville and Memphis. They have online banking and recently added mobile banking options, so anyone interested can invest in this MDI and CDFI. Check out their website to get started today.


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