On Monday, the National Bankers Association (NBA) issued a statement ensuring minority entrepreneurs and others that the nation’s banking system is secure, despite the failure of New York-based Signature Bank and California-based Silicon Valley Bank (SVB). The two banks were closed and seized by federal regulators over the weekend.
The Washington-DC-based trade group that calls itself the voice of minority banks made clear its stance about the security and safety of the nation’s banking system–despite the second and third largest bank failures in American history. The financial collapse of Washington Mutual in 2008 remains the biggest bank failure in the country.
The statement from NBA, in part, reads, “In light of recent industry events, the National Bankers Association wants to assure consumers that your money is safe with minority banks. Minority depository institutions are very different from both SVB and Signature Bank, which had high concentrations in crypto deposits and volatile venture capital. MInority banks are not exposed to riskier asset classes..”
The National Bankers Association is a banking industry think tank that represents some of the country’s biggest and most prominent African American, Hispanic, Asian, and women-owned and operated banks in the country.
According to the NBA website, City National Bank of New Jersey, based in Newark, and Industrial Bank and Carver Federal Savings Bank in New York are the only African American-owned MDIs in the metro area. United Bank of Philadelphia in Pennsylvania is also a member.
Additionally, Nicole Elam, president, and CEO of the NBA, assured clients and consumers that minority deposit institutions (MDIs) have always focused on a conservative, relationship-based business model. “We continue to monitor SVB’s impact on large corporate deposit concentrations, fintech, tech companies, and larger financial institutions that have partnerships with MDIs,” Elam said.
Lastly, in a related matter, on Tuesday, Signature Bank and three former top executives were suited by shareholders who accused the bank of lying to investors about the financial security of the bank, just days before state regulators took control of it. And it was announced on Tuesday afternoon that the Justice Department is investigating the collapse of the banks.
This is a developing business story. Continue to follow NJ Urban News for local reaction to the two largest bank failures in American history….