The Daughter of a Slave Who Did the Unthinkable
“The daughter of a former slave, Walker became the first Black woman ever to head a U.S. bank when she founded the St. Luke Penny Savings Bank in Richmond, Va., in 1903. Her success came from doing what great entrepreneurs do: Walker zeroed in on an underserved market and focused her prodigious energy on meeting its needs. But her story is all the more remarkable because it played out on a stage of such intense bigotry.
…Having grown up in a network of mothers who had to manage family finances to the penny, Walker saw the economic independence of Black women as an ethical imperative.
“Who is so helpless as the Negro woman?” she asked in a speech in 1901. “Who is so circumscribed and hemmed in, in the race of life, in the struggle for bread, meat and clothing, as the Negro woman?”
She called for St. Luke to create a department store and a newspaper—but, above all, a bank. That, she believed, was the way to uplift Black women. “Let us put our moneys together; let us use our moneys; let us put our money out…and reap the benefit ourselves,” she proclaimed. “Let us have a bank that will take the nickels and turn them into dollars.”
Walker had worked as an insurance agent and had taken correspondence courses in business and accounting, where the color of her skin wouldn’t disqualify her from participating. The manager of one white bank in Richmond allowed Walker to spend several hours a week there for months, studying how banking worked down to the finest details.
Few companies have ever launched into more hostile seas.
At the time, many white banks refused to lend to Black borrowers. Those that did often charged higher rates, creating resentment and further hardship that drove borrowers to pawnbrokers, payday lenders and loan sharks.
…Although the bank was open to all, Black women remained Walker’s preferred customers. They generally could work only as servants, laundresses or factory hands, often subsisting on $5 a week.
So Walker made loans as small as $5. The bank kept evening hours six days a week to accommodate workers who labored past 5 p.m.
Walker knew impoverished borrowers could be honest and diligent. So she turned local communities into ad hoc credit committees, enabling St. Luke to lend to borrowers with trustworthy references.
Most mortgages then required at least a 40% down payment and matured in about five years—with much tighter terms for Black borrowers. St. Luke, however, accepted down payments as low as 10% and let home buyers refinance as needed.
By the 1920s, St. Luke customers had fully paid off nearly 650 mortgages, and almost 40% of Black homes in Richmond were owned by their occupants, among the highest rates in the U.S.
Walker gave each of the bank’s stockholders, even those who owned only a fraction of a share, voting rights and input on operations.
In the bank’s elegant interior, holding a brass pen in their hands, even the poorest customers could feel respected.
By the 1920s, at least 100 Black women worked at St. Luke’s enterprises, probably more than at any other organization in the U.S. financial industry…”