A city with great economic opportunity and great challenges for banks
Detroit presents certain challenges to banks and credit unions looking to go above and beyond in their service to the area. With a little more than 40% of the population in the urban area qualifying as low-income, the city is considered to be one of the poorest large cities in the country, contributing greatly to their high crime rates. Additionally, Detroit is one of the Blackest cities in the country, with 78.3% of their population identifying as Black in the most recent census. It’s been a majority Black city since the 1970s, when postwar suburbanization took effect and white families were able to take advantage of the GI Bill benefits which guaranteed home loans. Excluded from these benefits, Black families were forced to live in undervalued homes and neighborhoods in the inner city, leading to significant economic inequality along racial lines.
While this process of suburbanization and redlining took place in every city in the US, Detroit was hit especially hard, and this was during a time when their enormous auto manufacturing industry was hit hard by metal rationing during the Korean War. Unemployment rose significantly, and white men were prioritized for the few remaining jobs. All of these factors have led to the urban population of Detroit being resoundingly Black, and most of these families having much less inherited wealth than the white families who were able to get home loans in the suburbs.
So how can we find Better Banking Options that will diminish economic inequality in Detroit by making wealth-building loans to Black families? We have identified several banks and credit unions which do this, or which make an effort to serve communities which are also important to the economic landscape of the area.
- First Independence Bank – First Independence Bank is a fantastic Black-owned bank working in Detroit to make quality loans in low-income neighborhoods. They opened in 1970 and have been devoted to improving the economic prospects of each of their customers for 50 years. They’re one of two banks headquartered in Detroit, and two of their three locations (all in the city) are located in low-income census tracts. A CDFI as well as an MDI, First Independence Bank does a significant amount of both small business and housing lending. We love this Better Banking Option because they’re not just a local-minded institution with their focus solely on Detroit, they’re of the communities they work with and, as a Black bank, have a deeper understanding of the financial needs of Detroit residents.
- Polish-American Federal Credit Union – In the early 1900s, the largest ethnic group in Detroit, according to the US census, was Polish, much of which was concentrated in the Hamtramck neighborhood, becoming the city’s own Poletown neighborhood. Although construction and development projects eventually destroyed most of Poletown, still today there is a large portion of Detroit’s residents that have some form of Polish heritage. Polish-American FCU was formed in 1976 to serve the Polish community through exceptional banking and lending practices, and they accept all members with any kind of Polish background. Although they don’t specifically serve Black families in Detroit, they’re an LICU who works in low-income neighborhoods and makes a large quantity of quality loans, which is rare for such a small credit union.
- University of Michigan Credit Union – While they mostly serve neighborhoods outside of the urban lines of Detroit in Ann Arbor, Flint, Ypsilanti, and Dearborn, University of Michigan Credit Union is still a CDFI and LICU which makes a significant amount of quality loans in Detroit. Although you have to be in some way associated with the university, this is a fantastic option for students, staff, or faculty in the area wanting to make a local impact with their deposits.
These are just a few Better Banking Options in the Metro Detroit area, and you can find more by looking up Detroit in our search engine. There are also a handful of credit unions owned by Black churches in the area, and if you happen to be one of their congregants this could be a fantastic option for you. However, it’s clear that regardless of where you choose to bank in Detroit, your deposits could be doing a lot more good in one of these banks or credit unions than in the typical mega bank. We encourage you to make a difference with your deposits and move your money today!