The Color of Money: Black Banks and the Racial Wealth Gap

by Mehrsa Baradaran

The largest black bank to fail was Jackie Robinson’s Freedom National Bank of Harlem.123 The bank’s 1990 failure was a devastating blow to Harlem and sent a shock wave through the entire black banking industry, especially because there were cries of discrimination and a double standard by the federal regulators that administered its liquidation. The “kid gloves” that Jackie Robinson had complained about were off now in the new hypercompetitive banking world. Not only did the bank’s regulator, the FDIC, not follow the FIRREA mandate to preserve the minority bank; it did not even use its standard protocol in liquidating the bank, causing more hardship than necessary to the banks’ customers.