OneUnited: Making a Difference

By Karen Kroll

OneUnited Bank aims to both make money and make a difference. “We want to make banking—and purposeful, sound money management—‘cool’ within the black community,” says Teri Williams, president and COO. “It’s our mission and purpose and why we believe we exist.”

With $650 million in assets, six locations in California, Florida and Massachusetts—and an online banking offering—OneUnited is the largest black-owned bank in the country, Williams says. It’s also a community development financial institution (CDFI).

OneUnited Bank is the product of the consolidation of four black-owned banks: Founders National Bank of Commerce in Los Angeles, Family Savings Bank in Los Angeles, Peoples National Bank of Commerce in Miami and Boston Bank of Commerce. “We did a roll-up strategy and changed our name to OneUnited,” Williams says.

Its acquisitions provide OneUnited with the scale needed to invest in technology, Williams says. OneUnited launched its internet banking offering 2005, making it the first black-owned internet bank. Through its website and products, OneUnited promotes the $1.2 trillion in spending power held by black Americans.

A three-pronged approach to empowering a community.

Along with changing perceptions about banking, Williams says that OneUnited is focused on:

  • Financing affordable housing in low- and moderate-income communities
  • Promoting financial literacy
  • Channeling black Americans’ spending power within the communities it serves

It’s an ambitious agenda, but Williams and her colleagues have made steady progress.

Over the past five years, OneUnited has lent almost $1 billion, the majority within low- to moderate-income communities. OneUnited’s loan portfolio includes single family residential loans, multifamily real estate loans, and commercial real estate loans.

When lending for multi-family properties, OneUnited bases the loan terms on current rental rates. That is, it doesn’t loan for more than what the current rates would allow with the expectation that the prospective landlord will raise rental rates and push out lower-income tenants. “These owners could raise their rent but recognize the importance of maintaining a sense of community,” Williams says.

In its efforts to promote financial literacy and build clients’ money management skills, OneUnited provides a roster of financial education courses, from retirement planning to financing a small business. It also offers a secured credit card as well as a “second chance checking account” for clients who have records within ChexSystems that may keep them from opening a traditional checking account. Many clients who perform well with these financial tools over a period of eighteen months can transition to other products.

Customers can open a no-fee checking with $100, or an interest-bearing account with $500. “We recognize that banking needs to be affordable,” Williams says. OneUnited’s investment in technology helps the bank efficiently maintain low-balance accounts, she adds.

OneUnited also is working to reduce the racial disparity many black Americans still face in many areas of banking. While 16 percent of white Americans says they’re unbanked or underbanked, 47 percent of black Americans do, along with 37 percent of Hispanic Americans, according to the Federal Reserve’s Report on the Economic Well-Being of U.S. Households in 2017. Black applicants for credit at all income levels are more likely to be denied or approved for less than they’d requested. For instance, while 17 percent of whites with incomes of $40,000 to $100,000 were denied credit, 30 percent of blacks were denied, also according to the report.

Part protest, part progress.

In 2016, OneUnited, working with the Miami Dade Chamber of Commerce, the Young Professionals Network, Black Professionals Summit, and other groups, asked members of the black community to open $100 savings accounts with black-owned banks. Numerous celebrities joined the “bank black” effort, including Queen Latifah and Michael Jordan.

The call to action was prompted by the high-profile police shootings of black teens and young men. “The black community felt under siege,” Williams says. The initiative was “part protest and part progress”—a way to channel black spending to support black communities.

It had the added benefit of transforming how many black Americans think about money, Williams says. “They’re asking if they can use their money to support black businesses or other businesses that show respect to the black community.”

Since the #BankBlack initiative, OneUnited’s deposit base has doubled, Williams said. The bank enjoys a large following online, with about 200,000 Facebook friends, many of whom communicate with the bank. “For some of them, it’s the first time they feel joy about banking,” Williams says. “My heart melts.”

OneUnited also is having an impact on a smaller scale. The bank may work with some customers for a year or more to help them purchase their first home. “To close on a home brings joy to all of us,” Williams says.

To expand on the work OneUnited already has done, Williams and her colleagues continually debate the direction they’d like to go: additional acquisitions, branching into new products, like insurance and investments, and/or opening more physical locations. “I’d love for us to have a community location in every major city in the country,” she says. “A place where the community can come to figure out how to build wealth.”

Karen M. Kroll is a business and financial services writer and content marketer based in Minneapolis-St. Paul. Email: karen@karenkroll.com.

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