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Waterloo, Iowa, native ReShonda Young, co-founder of Bank of Jabez. Source: Screenshot by Black Iowa News.
ReShonda Young had trouble "Banking While Black." She’s making sure no one else does.
Young is the co-founder of the Bank of Jabez, set to open in Waterloo, Iowa, next year. The state’s only Black-owned bank will be a certified Community Development Financial Institution that will promote economic growth in underserved communities, according to its website.
"Things are moving forward," said the entrepreneur, who wants Blacks and minority groups to grow personal and generational wealth.
Young, born and raised in Waterloo, Iowa, spoke to about a dozen small business owners during the Black Iowa Business Directory September Roundtable held via Zoom.
With a background in investment and real estate, Young said God told her to open the bank. Support for the bank has emerged from unexpected places, and now she is securing more than $10 million dollars and has support from some of the nation's biggest banks.
The Wartburg College graduate told the small business owners she had rejected the idea of attending college for four years and working for 40 years for somebody else. After college, her identity was stolen and her credit was affected, she said. Even so, she forged ahead and began buying real estate in 2000.
“Now to invest in real estate with no money, credit, young, Black female, just fresh out of college is almost crazy to think that it's actually going to happen,” she said. “But what I'd learned at that point was the power of telling your story.”
Young met a realtor and other people who helped her accomplish her goals, but she also met some who tried to block her progress, she said. She had trouble securing bank financing when she opened Popcorn Heaven, which she said was licensed in eight states in the four years before she sold the business in 2019.
During the process of selling the business, Young said she saw firsthand the tactics used by her bank that gave an advantage to her buyer who was white.
“They gave her more than double the amount of money they were willing to give to me,” she said. “My repayment was a little over $3,600 a month, her repayment was $1,200.
Young said she was used to calling the bank with her needs, but then the banker ghosted her, she said. Later came threats, serious account problems and settlement, she said.
“I’m like, God, if I’m going through this, how many people are going through this?” said Young, who won a lawsuit in 2020 over discriminatory lending practices. “And we’re going through this stuff because of the color of our skin, generally speaking.”
She began praying about what to do.
“I hear very clearly I’m supposed to start a bank,” she said.
Young initially balked at the idea. Then, things began happening. A collaborator with a banking background materialized, and other individuals and business partners have arrived right on time.
Then came the name, Jabez after a Biblical figure, she said.
“So like three days later, he gave me the name,” she said. “And he gave her (colleague) the same name.”
She told the meeting attendees she doesn’t have millions of dollars to open a bank, and most people in the community don’t either. Even so, well-known banks have come on board and other financial roadblocks have receded, she said. She closed on the bank's location in Waterloo on Aug. 31. Young anticipates additional locations.
As plans for the bank take shape, Young said she has heard about the barriers people face with banks, including that some people don’t trust banks and others face language barriers. The bank will also have interpreters who speak the primary languages spoken in the community, she said. She is researching paying interest on accounts. She said they've interviewed some talented Black women for the CEO position. They also plan to hire loan officers who are certified financial coaches and offer a second chance home loan approval program to help combat the Black wealth gap.
Last March, 24/7 Wall St., a financial news and opinion company in Delaware, ranked Iowa 3rd on a list of worst states for Blacks, using governmental data. Minnesota ranked 2nd, and Wisconsin ranked 1st. The site also ranked the worst cities – Davenport, Des Moines, and Waterloo, 13, 11, 6, respectively – on the list of the 20 worst cities for Black Americans. Midwestern states dominated the list.
Weslyn Caldwell, Business Empowerment & Incubation coordinator at the Directors Council, said future events include a virtual webinar for Black businesses with Shopify. On Oct. 12, a holiday gear-up series will be held with Google and Facebook to help businesses prepare for the holiday season.
“So that way you can maximize your holiday sales,” she said, during Wednesday's roundtable.
Caldwell encouraged meeting attendees to list their businesses in the directory.