Category Archives: Freedman’s Bank

Smaller banks, smaller stress. Bigger banks….
(Randal K. Quarles, call your office)

THREE CHEERS for the U.S. Federal Reserve for its recent study, “The Differential Impact of Bank Size on Systemic Risk, by Amy G. Lorenc and Jeffery Y. Zhang.

The study couldn’t come at a more critical time, as the Fed, Federal Deposit Insurance Corporation, and others immerse themselves in implementing the new requirements of the Crapo bank-regulation reform act.

   “Our empirical results,” the authors write, “show that stress experienced by banks in the top 1 percent of the size distribution leads to a statistically significant and negative impact on the real economy. This impact increases with the size of the bank. The negative impact on quarterly real GDP growth caused by stress at banks in the top 0.15 percent of the size distribution is more than twice as large as the impact caused by stress at banks in the top 0.75 percent, and more than three times as large as the impact caused by stress at banks in the top 1 percent.

These results,” they conclude, “support the idea that the largest banks should be subject to the most stringent requirements while smaller banks should be subject to successively less stringent requirements.”

Banking systems systems dominated by large banks are like a majestic ship — they can do many things; they move fast; they have big guns. But if one or two of these great vessels is hit, and sinks…

Community banks, by contrast, function like a network of rafts. They can’t move as swiftly. They don’t have huge guns. Water comes over the side and people get wet… but like a raft, the system doesn’t sink as readily.

Though the passage of the Crapo act in May was a valuable step, the fact remains, as we wrote at the time in “Fed, you’re up next, “it will take well beyond that for the Federal Reserve, FDIC, and other institutions to implement many of the new law’s provisions via regulation — and longer still for their impact to be felt in the real world.”

Note: the Fed acted in late August to implement an important increase in the threshhold level for small bank holding company policy statements to $3 billion — another step forward.

Here’s hoping the rule-writers at the Fed (att: Randal K. Quarles, pictured nearby) take the time to familiarize themselves with the Fed’s own important research contribution.

Community bank squeeze continues

    THE TABLE NEARBY illustrates the declinle of small and community banks since 2008 as reporter by the Federal Deposit Insurance Corporation, or “FDIC”

    (Note: March, 2018 figures will be released in a few weeks; the chart reflects a Freedman’s Foundation estimate based on public filings.)

    The falloff is italicized by the fact that large banks (which can more easily bear the fixed cost of regulation) continue to surge.

Indeed, a quick glance at the FDIC‘s estimates for the capitalization — see table below — show the increasing concentration of banking assets into the hands of a few institutions.

Concentration renders an industrty less competitive, less diverse, and more vulnerable to systemic shocks.

There’s also rich irony in this trend, given that one of the main goals of “banking reform” embodied in Dodd-Frank was to bring large financial institutions — those “too big to fail” — under control.

Legislative and oversight changes over the last 20 years definitely succeeded in adding regulations. They produced, however, not only unintended consequences — but in the case of large banks and the banking sector, virtually the opposite of their stated goals.

June 16-18 – Freedman’s and genealogy event in Atlanta

Freedman's Bank genealogical records history Atlanta eventThe Celebration of Juneteenth is coming to the Atlanta area June 16, including a look at the Freedman’s Bank records on African-American genealogy:

Atlanta Daily World writes:

On Saturday at 2 p.m., “Tracing History with Emma Davis Hamilton” will take place in McElreath Hall, Member’s Room. Hamilton, past president of the Metro Atlanta chapter of the Afro-American Historical and Genealogical Society (AAHGS), will lead a detailed 90-minute session designed to help participants work with the important records of Freedman’s Savings Bank. This Washington, D.C., institution was created after the Civil War, to assist newly emancipated enslaved and African-American soldiers. Its records contain valuable genealogical information such as birthdate, birthplace, where raised, former owner, employer, occupation, residence, and relatives. The bank not only provided services for African Americans, but white citizens as well. Hamilton has 26 years’ experience as a genealogy researcher.

Announcing the Freedman’s-Dos Equis “Most Interesting Rookie in the Playoffs” Award (NBA)

Freedman's Bank Dos Equis NBA Playoff Rookie Award


April 10, 2017

The Freedman’s Foundation is pleased to announce the first annual “Most Interesting Rookie in the (NBA) Playoffs” award….

in association with The 5/7 Club,, Freedman’s Bank,, and Dos Equis (a trademark and subsidiary of Heineken USA.)

Nominees will be announced on approximately April 28, coinciding with the end of the first round of the NBA playoffs.

Fan voting will take place beginning during the second round of the playoffs, and end not later than the end of the NBA Finals.

Following the fan vote, a panel of former NBA players and former and current sports journalists will make their vote. The two votes will be combined on a percentage basis and a winner announced approximately June 25.

“The award is designed to recognize outstanding rookie performance in the playoffs,” said FF chairperson Ronald Brown, “with a special focus on the player that shows intriguing promise for the future.

“That is, it is not necessarily intended to be a ‘MVP Rookie’ award, but a selection of the first-year player that demonstrates both performance and potential.”

For more information, contact:


Casualty rates slow, but casualties mount (an update)

US banking failures Freedman's Bank

The good news is, big banks have been bailed out (cc: US Taxpayer, $700 billion), and small bank failure rates slowed in 2016 and so far in 2017….

the bad news is, U.S. policy drove nearly half such banks out of business from 2009 to 2016, and there appears to be no relief in sight for the institutions that supply most of the capital to small businesses.

Click here for’s list
of the banking casualties since 2009


Freedman’s “still retains assets”

Freedman's Bank ClevelandElizabeth McIntyre from Crain’s Cleveland Business filed a notable piece on the legacy of Freedman’s Bank recently, as the 150th anniversary works its way across the midwest. A brief excerpt:

“The Freedman’s Bank became one of the first multi-state banks in the nation, comprising 37 branches in 17 states and the District of Columbia. Tens of thousands of former slaves deposited more than $57 million, most in small amounts. The bank fell victim to mismanagement, fraud and the “Panic of 1873.” It closed. Most lost their savings. More than $3 million in deposits, uninsured, were gone. And historians say it may have been the genesis of a deep distrust of banks by African-Americans.

“The Freedman’s Bank still retains valuable assets more than 150 years later: the records of depositors. At the time, former slaves provided details about their addresses and a record of spouses, children, siblings and parents. The records from 29 branches still exist at the National Archives and they’re a treasure trove for 10 million African-Americans today whose ancestors were depositors. The database also is accessible online for free at”

Read the full article at Crain’s Cleveland Business

Fed celebrates Freedman’s at 150

Don’t miss the rich history of Freedman’s Bank, now on display at the Federal Reserve….

including original artwork and passbooks, from some of the bank’s original $57 million in deposits.

Although the bank failed through poor government regulatory policy and mismanagement leading into the Panic of 1873, its mission was a noble one, and still timely given economic conditions today.

The exhibit, marking the 150th anniversary of Freedmans, will also travel to Atlanta and Cleveland later this year.

“Never again” — the Freedman’s collapse

footer-logo-whhaThree million dollars belonging to 61,000 African Americans. That’s how much accumulated wealth vanished when the Freedman’s Savings and Trust Company failed in June 1874.

A solid account from the White House Historical Society: