The Board of Directors of the Federal Reserve System stated on March 5, 2021, that the system would begin to include women-owned financial institutions in its definition of minority depository institutions.
The broadening of this term is a significant step toward acknowledging that women have been excluded from the financial industry, even though women make up a substantial share of the world's population. The tiny percentage of female-owned financial institutions in the U.S. indicates this underrepresentation.
What Exactly Is A Minority Institution Of Deposit?
Today, the Federal Deposit Insurance Corporation backs deposits at 4,914 different commercial banks and savings organizations across the country.
To be considered minority ownership, shareholders must be either citizens or permanent legal residents of the United States. 8 As of the fourth quarter of 2021, the Federal Reserve has not released its official list of banks in the United States that women own. 5
In The Beginning: Women In Banking
Even though American banking history began with the Bank of North America in 1781, it took nearly a century for a woman to hold a prominent position in a bank.
Deborah Powers was a pioneering entrepreneur who, in 1877, along with her two sons, founded the D. Powers &'' Sons bank in Troy, New York. She was the first and oldest woman known to have created a bank, and she was born in the 18th century, making her the only woman bank president in history to have been born in that era.
However, Powers wasn't the first American woman to hold the position of the bank president. Louise took over as president which her late husband had founded in 1855. This was just two years after his death. Up until her son took over in 1892, Weiser served as president.
Women-Owned Banks and Societal Advancement
The history of women and banking is fraught with both triumph and tragedy. Many women in the 19th century were not even allowed to open bank accounts due to legislative restrictions, even though many women achieved significant gains in banking leadership.
All property owned by women was transferred to their husbands at the time of marriage before the passing of the Married Women's Property Acts in several states.
And lest you think this is all old history, the Equal Credit Opportunity Act wasn't established until 1974. Even then, married women couldn't receive credit cards without their husbands' permission.
The Prosperity of Female-Owned Financial Institutions
There needed to be more development of banks owned by women, despite the achievements of pioneers like Deborah Powers and Maggie L. Walker. Three of the 45 institutions in the National Bankers Association are held by women, yet this is only sometimes a selling factor.
Take New York City's First Women's Bank, for example; it was founded in 1975 at the height of the second-wave feminist movement. After 14 years, in 2016, the bank rebranded itself as First New York Bank for Business.
What The World Needs Now Is Women-Owned Banks
Most individuals understand that there is a gender gap in earnings at this point. The latest current statistics from the U.S. Census Bureau show that in 2020, women earned 83 cents for every dollar men made on average. In 2019, female workers earned an average of $9,613.13, or $545.7 billion less than male workers.
Additionally, our findings suggest that the wage disparity between men and women may be much worse than 18 cents, depending on factors such as the confluence of race and gender.
As a result of their unique perspective, women-owned banks are better equipped to evaluate the creditworthiness of prospective borrowers and provide a remedy to another form of financial discrimination that women face: a lending or credit gap.
Do Any Women-Owned Banks Exist?
Historically speaking, Deborah Powers is the first American woman to establish a bank. Powers started D. Powers &'' Sons in Troy, New York, in 1877 when he was 87. It was Powers and her two sons that established the bank.
The St. Luke Penny Savings Bank in Richmond, Virginia, was formed by Maggie L. Walker in 1903, making her the first African American woman to do so. The butler's son Walker was born to a woman who had been enslaved and a formerly enslaved person.
In addition to his role as a civic leader during the Jim Crow era, Walker also established a newspaper used by civil rights activists. 12
