Netflix will deposit $100 million in Black-owned banks
Netflix will deposit $100 million in Black-owned banks
Streaming giant Netflix is depositing $100 million of its cash on hand in Black-owned banks. The company says Black-owned financial institutions have a harder time accessing capital and that the move should help the banks lend more to their communities.
There are only 21 Black-owned banks in the United States, and they’re predominantly located in communities of color. Michael Neal, a senior research associate at the Urban Institute, said they don’t have the deposits that other banks do.
“That then limits the amount of lending activity and community investment that they can do,” Neal said.
At the Black-owned Carver State Bank in Savannah, Georgia, Robert James II said more deposits could help his bank make more loans for affordable housing.
“We would be able to extend more small business capital,” James said. “We would be able to extend more credit to some of the nonprofits that we serve.”
But James said deposits are only one way to help Black-owned banks.
And remember that a deposit is a liability for a bank, said Mehrsa Baradaran, a University of California, Irvine, law professor and author of “The Color of Money: Black Banks and the Racial Wealth Gap,” the book that inspired Netflix’s action.
The bank has to be able to give you that money whenever you want it. It’s better for the bank if it can make you a loan.
“When I get a mortgage, and I pay the bank some percentage every month, that’s a bank asset,” Baradaran said. “The thing that builds wealth for banks — and for communities — is more opportunities for those assets, wealth-building assets.”
She said it’s great to see Netflix committing money to help Black banks, but even $100 million in deposits won’t solve the problem of racial wealth disparities.
“This was a structural problem created by policies and laws and federal subsidies going to white communities and not Black communities,” Baradaran said.
Until the country fixes those structural issues, she said, the racial wealth gap will continue to exist.
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