Skip to main content

Black Banking Startup Raises $40 Million

According to a press release, "Greenwood, the digital banking platform for Black and Latino individuals and business owners, today announced it has closed $40 million of Series A funding from six of the seven largest U.S. banks and the top two payment technology companies: Truist, Bank of America, PNC, JPMorgan Chase, Wells Fargo (Its still time to Clean House at Wells), Mastercard, and Visa."

The investor group also includes the largest Hispanic bank in the US, Banco Popular. (Looks like the crisis has finally forced the realization that, as MLK noted, "we must 'live together as brothers or perish together as fools." )

FIS, TTV Capital, SoftBank Opportunity Fund, Lightspeed Venture Partners and All-Pro NFL running back Alvin Kamara were also listed as investors.

For a startup to receive funding from six of the seven largest firms in its industry is significant. The key question is why and what will they do with this funding?

Greenwood started out of the BankBlack movement, an effort to redress years of neglect and discrimination.

We have observed a remarkable increase in the performance of minority bank stock: these stocks (blue line) have outperformed the S&P 500 (green line).




The S&P 500 Index (green) returned 74.73% over the past year. The Minority Bank portfolio (blue) returned 112.27% over the same time period. 

At the Federal Reserve Bank of Kansas City in 1994, I suggested the Federal Reserve purchase mortgage-backed securities (MBS) originated by Black banks as part of open market operations. The Fed, then under Alan Greenspan, refused, reversing course only in 2008, when large non-minority banks got into trouble.

We still believe the Fed will need to create a Black bank liquidity pool totaling at least $50 billion by conducting repo and reverse repo transactions, purchasing Treasury, MBS securities (and/or SBA PPP loans) from Black banks, asset managers and fintech firms with a record of actually making loans to the Black community.

Greenwood may very well be one of these. We will see.

Popular posts from this blog

Projected Impact of Gun Laws on Corporate Profits in Texas

More Fortune 500 companies are located in Texas than in any other state. Texas successfully used low taxes and minimal regulations as bait to recruit companies like Tesla and Oracle. The state promoted these “advantages” in ads highlighting their “free-market” environment and criticizing the "tax and spend policies of liberal leadership" in Democrat-run states. Four million people migrated to Texas over the past ten years. Our economic models predict a reversal, however. State of Texas corporations on the Fortune 1000 list generate $2.2 trillion in revenue, $158 billion in profit. They have a market value of $3.8 trillion and employ 2.5 million people nationwide. We continue to believe this increased corporate presence in Texas imposes a tax on the nation as a whole. Texas allows anyone 21 or older to carry handguns without training or licenses, and maintains lower gun purchase age limits. Beyond the recent abortion bill, which allows people to sue those who "aid and abe

SUMMARY: THE INFLATION REDUCTION ACT OF 2022

The Inflation Reduction Act of 2022 (IRA) is a law passed by the 117th United States Congress in August 2022. It "includes a first-time provision that would allow the U.S. Department of Health and Human Services to negotiate prices of certain prescription drugs in Medicare and Medicaid. Savings would be generated by requiring drug manufacturers to pay a rebate for drugs whose prices increase faster than inflation under Medicare, and would create several reforms in the Medicare drug program, also known as Part D, including a cap on out-of-pocket drug spending for seniors beginning in 2025. It also extends by three years the expanded and enhanced Affordable Care Act tax credit ahead of planned premium increases set to take effect in 2023." We estimate the impact on the African American community to be significant, on the order of 8% of the total. (For a detailed analysis, email info@creativeinvest.com). The law's climate provisions consist of "subsidies for energy that

Fixing Abortion And Black Maternal Mortality Is NOT Up To the Supreme Court. It's Up to the Fed...

Black women die in childbirth at disproportionate rates compared to their white counterparts. Research conducted by the Centers for Disease Control and Prevention (CDC) clearly shows that social determinants - access to nutrition, transportation, and healthcare——are crucial factors. With the decision to restrict access to birth control and care, the Supreme Court imposed additional penalties on a selected portion of the US population - Black women. They were added without due process or a trial at the individual level. These elevated risks are clear and undeniable, as explained below. Assume two population groups or sectors. In Sector One, women die in childbirth at the rate of ten per 1,000 live births. In Sector Two, the maternal mortality rate is 100 per 1,000 live births. With the elimination of birth control, there are 2,000 live births in each sector. This implies 20 Sector One deaths and 200 in Sector Two. Amanda Stevenson, a professor at the University of Colorado Boulder,