There were more than one hundred black-owned banks established during this period, and the overwhelming majority of them existed in the South. The "rise of black banking" in the first half of the twentieth century happened in tandem with Jim Crow segregation, as blacks were relegated to a separate economy that forced them to set up their own parallel institutions. As Baradaran notes, however, black enterprises such as banks lacked the necessary capital to expand beyond certain parameters.
An example includes the True Reformers Bank in Richmond, Virginia, founded by the Grand Fountain of the United Order of True Reformers. Between 18, the earliest iterations of black banks formed through mutual aid and fraternal societies. Its failure left blacks with a general distrust of banking as an alternative form of wealth building. The bank took advantage of black depositors through a series of unscrupulous transactions by its white administrators. It begins with the early history of black banking and the Freedmen's Savings Bank in the aftermath of the Civil War. The book is divided into eight chapters that cover the period from 1865 to the present with historical and contemporary observations. Though integral, the responsibility and burden of fixing such a seismic problem should not be placed on black banks alone, because they are but a small factor in the larger system. However, black banks never came close to ending the practices that left black people in a state of economic inferiority. Historically, black banks have been praised for their potential to eliminate the racial wealth gap through extending economic opportunities to blacks.
Moreover, Baradaran unpacks the role of black banking in narrowing this long-standing economic divide. "And," she explains, "the color of capital, commerce, property, trade, and money was white" (5).
She argues that wealth inequality in the United States has been created and sustained for decades by banking legislation that has discriminated against blacks since their emancipation from slavery. In The Color of Money, Mehrsa Baradaran weaves together an intriguing and sobering analysis about the relationship between public policy and black economic realities.
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