Since the 19th Century, African-American-owned banks have played a vital role in the economic development of our communities. Between 1888 and 1934, there were more than 130 U.S. banks owned by African-Americans, which is believed to have been the force behind the explosion of African-American businesses, which grew from 4,000 in 1867 to approximately 50,000 by 1917. While the 1960s produced a growing number of African-American banks, by the 1980s, many of them had failed. Today, according to a March 2010 Federal Reserve Board report, only 30 U.S. banks are owned by African-Americans.

The structural exclusion of African-Americans from the mainstream economic sphere led black entrepreneurs to build their own financial infrastructure to support the economic development of our communities, but the dramatic decline in the number of black-owned banks has led many to question the role of African-American-owned banks in revitalizing our neighborhoods today.

According to Dr. Brooks Robinson, economist and director of blackeconomics.org, black banks are critical to creating loans for black businesses. “Black-owned banks in black communities can even draw the traditionally unbanked poor into the formal economy,” Dr. Robinson states. “And [they can] push egregiously exploitative pay-day and check-cashing operations out of business.”

Indeed, African-American owned banks and other opportunity financial institutions, including Community Development Financial Institutions, tend to serve low-income communities and communities of color. Their strength and appeal is that they have the power to alter African-Americans’ relationship with the financial industry, offering a promise of trust and accountability when others are content to exploit or neglect. Their reach is into the neighborhoods — and blocks — where the alternative is often the abusive “pay-day” structure that locks too many of our households into the cycles of economic harm from mounting, uncontrollable debt.

The disposable income that quickly floats through many of our communities has long been critiqued as an obstacle to the creation of jobs or of an infrastructure to sustain economic development. However, black banks can leverage deposits to lend in our communities and facilitate a recycling of financial resources in a way that can produce jobs and improve the quality of our communities through emerging infrastructure development (e.g., construction and the “greening” of our neighborhoods).

Actor and entrepreneur Duane Martin sees black-owned banks as an important lifeline to support the targeted financial needs of communities that are often denied loans from some of the more mainstream institutions.

“I call it going straight to the vein,” said Mr. Martin. ”[In black banks], our investment can support that guy trying to get that barber shop, or that cleaners, or that family trying to buy their first home. My wife and I put our money in a Black bank so that we can be in the ‘hood everyday.”

However, black banks alone will not solve the tremendous financial struggles faced by African-Americans.

“To be sure, there is a role for [black banks] to play, but they should not be expected to play the leading role in wealth accumulation and economic development in the black community,” said Dr. Bernard Anderson, Whitney M. Young, Jr. Professor Emeritus at the Wharton School of Business.

The larger, mainstream banks must still be held accountable for fair and responsible lending in order to bridge the racial wealth divide; and the protection of human and civil rights in the workplace and the education pipeline must remain core to the fight for equity and advancement.

The role for black-owned financial institutions is the same as it has always been — to support the financial needs of the communities in which they are located. They leverage deposits and support the formation and development of emerging enterprises that will produce jobs and improve the economic landscape of our communities.

But black banks need our investment in order to thrive. In this economic climate, when so much is at stake in terms of our ability to salvage economic security from the greatest loss of home ownership and wealth in three decades, it has perhaps never been more apparent that our struggle to build wealth is for most, a process, and not an event.

As was true in 1888, when Capital Savings Bank emerged as the first black-owned bank in Washington, DC, the greatest investment we can make in this rebuilding effort is in ourselves.