Rescued! Largest Black Bank Receives $55 Million Bailout

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Carver bankCarver Federal Savings Bank, the largest Black-run bank in the U.S. is the latest bank to be bailed out. Carver Federal Savings received a $55 million cash rescue from key investors including Citigroup, Goldman Sachs, Morgan Stanley.

See also: Bank Of America Website Issues Continue

“This represents a significant shift from community ownership to corporate,” said an investor who identified herself as Wimberly Edwards.

Carver Bancorp CEO Deborah Wright tried to assure the audience at Harlem’s Studio Museum that Goldman Sachs Group Inc., Morgan Stanley, Citigroup and the other new owners are “keenly attuned to our mission” and “wouldn’t have stepped up” if they didn’t think Carver was worth preserving.

“I understand the optics,” Ms. Wright said in an interview after the shareholder meeting. “But there was no alternative. The amount of capital we needed wasn’t available locally.”

Carver’s clients, who generally live and work in the city’s poorer precincts, have been hit especially hard by the recession. The bank posted a $40 million loss last year, more than wiping out the prior decade’s worth of profits, as seriously delinquent real-estate related loans soared to about $120 million—well in excess of Carver’s $23 million set aside in reserves

Read more at the Root.

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