In the nineteenth century, Asian American merchants, a relatively small sector, provided some limited financial services to their communities. However, as a working class population, Asian Americans still faced barriers to commercial banks, which could provide the capital needed to own a home or start a business. These communities either relied on personal savings or family resources, or they created rotating credit associations.

Starting in the twentieth century, Asian American entrepreneurs founded the first formal Asian American commercial banks. Ethnic banks of this kind became known as “minority-owned banks.” Black people led the way: One of the earliest minority-owned banks was the United Order of True Reformers, a Black-owned bank with a state charter founded in 1889 in Richmond, Virginia.

Bankers rely on relationships and reputation to maintain customers, and they rely on access to capital. When racial and ethnic communities cannot get loans or other important financial services from large commercial banks, minority-owned banks become a lifeline.

In this module, we learn about the importance of finance in a capitalist economy, the history of Asian American banks, and how one minority-owned bank became the scapegoat of the 2008 global financial crisis.