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SALT LAKE CITY — Black investors are making history in the Beehive State with plans to open the state's first and the Mountain West's only Black-owned bank.
Redemption Holding Company, a Delaware corporation, announced last week it reached a purchase agreement with Holladay Bank and Trust, which opened in Holladay in 1974. The deal is pending federal regulatory approval.
Redemption Holding Company aims to reverse a decadeslong trend in Black bank closures. According to the company, the number of American Black-owned banks decreased from 50 in 1976 to just 16 in 2022.
Redemption Holding Company would move that number to 17 and would mark the first time in U.S. history that an existing commercial bank would become a Black-owned Minority Depository Institution — a federal term that refers to banks and credit unions that are owned or directed primarily by minority groups — through acquisition.
"Black banks make the American dream possible for all Americans by deploying resources that uniquely address the financial realities of communities that have been systematically excluded, overcharged and under-capitalized for hundreds of years," Redemption Holding Company CEO Ashley D. Bell said in a statement. "Redemption will serve as a lifeline to the next wave of Black and brown first-time homebuyers and small business entrepreneurs across the country."
The bank hopes to address racial and ethnic disparities in finances. For example, Black and Latino households earn about half as much as white households and only own about 15-20% as much net wealth, according to the Federal Reserve. Black borrowers are also twice as likely to have their mortgage request denied.
Redemption Holding Company will be led by a number of high-profile names, including Bernice A. King, daughter of Corretta Scott King and the late Dr. Martin Luther King Jr.; former NFL player and investor Dhani Jones; and Bell, a former White House policy adviser. Bell and King previously co-founded the National Black Bank Foundation, which has steered $600 million of investment opportunities into Black banks since 2020.
"In my father's last public address on April 3, 1968, he preached the imperative to accelerate the financial inclusion of Black Americans by supporting mission-driven Black banks — something he called a 'bank-in movement,'" King said in a statement. "More than half a century of struggle and incremental progress later, we're making good on Daddy's call to bank-in by creating new centers of opportunity for people of color, starting with this Black-led bank acquisition. Redemption is just that: delivering families from the cycle of unjust financial exclusion and intergenerational poverty."
