Imagine relying solely on predatory payday lenders or prepaid debit cards to secure the funds needed to meet your daily expenses. This is the reality for the 5.6 million households in the United States without access to the financial services that a bank or credit union can provide to historically underserved communities.
Whether it’s an inability to meet minimum balance requirements, living in a financially underserved area or distrust of financial institutions from historical exclusion and discriminatory practices, including redlining, millions of American families lack access to the necessary financial tools for achieving economic stability.
American banks have been closing physical branches at an astonishing and increasing rate for years. A recent report shows that these closures disproportionately impact consumers who are disabled, low-income, Black, Asian or live in racially diverse areas.
As many banks are cutting off a financial lifeline for countless individuals who rely on in-person banking, the National Community Reinvestment Coalition (NCRC) and its local member organizations are working to ensure more people are included in the economic mainstream. We spoke with key actors in the fight to reverse the trend of increasing banking deserts in disadvantaged neighborhoods by creating more equitable, hyperlocal economic ecosystems.
The Association for Black Economic Power
The contentious relationship between the largely African American community and traditional financial institutions combined with the widespread impact of predatory payday lenders in Minneapolis has long fueled a demand for Black financial independence. This movement coalesced into the Association for Black Economic Power (ABEP) in 2017.
“They were being raked over the coals by payday lenders to the tune of 400%,” said Debra Hurston, the executive director for the ABEP. “You think you’re getting a $200 loan, but multiply that by four. And there was no relief [and] no cavalry was coming.” The community was also reeling from the deaths of Philando Castile in 2016 and George Floyd in 2020, both African American men killed by police.
“To top off the financial challenges, there was also policing brutality [to contend with],” Hurston said. “The economic challenges had to be addressed to create real change.” Community discussions focused on investment in the local Black economy, highlighting the area’s lack of affordable and accessible banking options. This dialogue was the catalyst for residents to form the ABEP, with three main goals: creating a financial empowerment center, establishing a credit union and creating cooperative housing.
Today, ABEP’s Financial Empowerment Center (FEC) and Arise Community Credit Union are working to narrow the generational wealth gap in Minneapolis by providing fair banking options and financial wellness resources to the majority African American community.
To complement the FEC’s free and publicly accessible financial education programs, Arise – slated to open this June – will offer one-on-one financial counseling and affordable car and home equity loans. “The first step to generational wealth is owning a home,” Hurston said. “Minnesota has one of the lowest Black homeownership rates in the nation. That shows that wealth isn’t being passed on.”
Arise is the first Black-led credit union established in Minnesota and the first new state-chartered credit union in the state in 23 years. “Imagine all those years walking into a space feeling like you don’t belong,” said Hurston. “Arise is the space you walk into and feel like you’re home. That’s what a credit union that’s specifically built for you feels like.”
Detroit Reinvestment Coalition & First Merchants Bank
The economically declining Fitzgerald neighborhood in Detroit hadn’t been home to a financial institution in over a decade. As local groups, like the Detroit Reinvestment Coalition (DRC) and Community Development Advocates of Detroit (CDAD), are committed to revitalizing low-income communities, leaders hone in on the importance of economic inclusion to a thriving and productive society.
“Every community should have the resources they need to be great,” said Phyllis Edwards, a leader of DRC and an NCRC board member for nearly 10 years. “Things like turning to payday lenders to cash checks and not having access to savings accounts hurt Black and Brown communities. They need a bank that works with the community to make a difference.”
When the coalition – composed of several nonprofits, nearly all of which are NCRC members – learned that First Merchants Bank was considering a Detroit branch, it became heavily invested in the project’s success.
“We knew that for the bank and the community to thrive, we needed to understand why so many people are unbanked, what it would take to get people banked and where banks are located,” Edwards said.
Together, the coalition and NCRC created a national survey focused on economic inclusion, which was distributed to NCRC members. The survey report, along with community listening sessions, proved helpful in informing First Merchants’ role in Detroit’s revitalization efforts.
“We were really excited about the bank’s decision to listen to the data,” Edwards said. “Everyone wants to be where housing is more affluent; that wasn’t the case for First Merchants.”
First Merchants Bank, with operations in Indiana, Michigan and Ohio, saw an opportunity to continue expanding its reach while driving systemic change. They invested in a new 3,000-square-foot banking facility, symbolizing growth and renewal in the Fitzgerald community.
Opening in 2025, the full-service branch will offer personal and commercial products and services, including checking and savings accounts, loans, digital banking and on-site experts to help residents and businesses achieve their financial goals. This project is one part of the city’s overarching revitalization strategy – developed with extensive community engagement – to transform Fitzgerald’s vacant land and buildings into valuable community assets.
The bank also established a community advisory board and the First Merchants’ Fitzgerald Home Improvement Fund to help direct reinvestment and sponsorship resources based on community needs. These efforts are designed to maximize the city’s significant renewal initiatives, which include constructing more affordable housing and several beautification projects, such as commissioning colorful murals, building a 10-acre park and establishing community garden spaces.
“We are doing everything possible to help the Fitzgerald neighborhood access much-needed capital,” said Jaime Faulkner, the director of corporate communications with First Merchants Bank. “We aren’t just a facade of a banking center. We truly care about the holistic development and revitalization of the neighborhood.”
Edwards, who lives within walking distance of the new branch, said the community has enthusiastically welcomed First Merchants as a lasting part of the neighborhood’s regrowth. “The bank built a relationship with the community before a single brick was ever laid,” she said. “That commitment shows they know it’s not just about the here and now; it’s about generation after generation.”
With its multi-state footprint and over $18 billion in assets, First Merchants Bank (First Merchants), headquartered in Indiana, is passionate about helping historically underserved communities prosper. They have partnered with NCRC to locate areas lacking financial resources and access to affordable banking options, honing in on the Fitzgerald neighborhood in Detroit, Michigan.
“We know there are gaps [resulting in] banking deserts,” said Faulkner. “Through this partnership, and with the assistance of several local community organizations, we identified an area of Detroit where we could make an impact doing what we do best: building relationships with businesses and residents.”
Artina Packnett, the new branch manager, is local to the Detroit neighborhood and has a vested interest in the area’s revival. Since the April 2024 groundbreaking of the new banking facility, Packnett has immersed herself in building community partnerships, strategic relationships and financial wellness initiatives. “From day one we’ve been heavily invested in the neighborhood,” said Faulkner. “Everything we do is from a local perspective and Artina is a fantastic example of that effort.”
“We are not coming in to get accolades building branches,” Faulkner said. “We are walking alongside Fitzgerald in the revitalization happening there already.”
Nicole Rothstein is a Contributing Writer.
Photo credit: Tima Miroshnichenkno via Pexels
