There are thousands of federally insured banks in this country and only about 20 of them are owned by black people. That absence has helped to fuel a huge racial wealth gap in this country, a gap where the net worth of a typical white family is more than 10 times the net worth of a typical black family. And now a group in Atlanta is trying to change that by launching a new digital bank aimed at serving communities of color. Last week, they started signing up customers.

One of the founders of that bank is a guy who's long called attention to racial injustices in his music.

Look at, obviously, Atlanta born rapper Killer Mike, one half of the critically acclaimed run The Jewels. Should I call you Killer Mike?

Mike, not just Michael. OK, Mike, my father is Mike and my daughter is Mikey. So I got stuck with Michael.

All right, Michael.

Welcome to the journal, our show about money, business and power. I'm Kate Lindborg. It's Thursday, October 15th. Coming up on the show, an interview with killer Mike on the importance of black banks and why he's starting one. At Facebook, we've taken critical steps to prepare for the U.S. elections. We've more than tripled our safety and security teams, implemented five step add verification and launched a new voting information center. Learn more at FT.com about elections.

Killer Mike or Michael, as I'll call him, is a Grammy winning artist and activist and a businessman. Can you tell us how you decided to go from being a rapper and an entertainer to running businesses?

Well, I live in the mind of a 12 year old where you can do anything. So and when I was 12 years old, I wrapped and sang and dance and I put together go karts and my grandparents were very serious about saving money. So it's not out of the spectrum of possibilities because, you know, the four elements of hip hop are, of course, b boy D.J. rapping and graffiti. But I would add that in particular in the 90s, led by the example that came out of the 80s with Def Jam and other prominent labels like Rap A Lot and Hoopla's Records and Luke Skywalker Records, it came a business sense and I would add a fifth thing became economy and commerce.

We got a chance to see the power of the dollar, not only as entertainers. We made money like black artists had always made money. We got a chance to understand the power of participation and not only be an artist within the production companies being successful and moderately or greatly successful record labels. And that started to show me at a very young age how influential hip hop was. There was a world to be made in terms of money and influence. So actually, I got into hip hop and I realized being mentored by people like Big Boy from Outkast, that hip hop did just make you famous and give you economic gain.

It gave you an opportunity to participate in business. And once I had the ability to start doing business, I did.

So about nine years ago, I bought a barbershop on the Internet and my wife didn't talk to me for two weeks. You so angry. And for the last nine years, she's made me make business decisions versus emotional artists decisions. So instead of buying a Dodge statement, I bought an apartment building and things of that nature.

So you've gone into real estate, restaurants. You have a couple Atlanta barbershops. Yes. And now you're starting a bank. What made you decide that banking was your next venture?

So I've always been black because it's what my grandparents taught me to do. I've always had one big bank account in terms of whatever big when you're 12, you keep eight hundred bucks that you're parents in your grandmother's made you save the one bank account. And then we'd have a auxillary bank account, usually with women would be out of place and you'd have a couple hundred bucks that you could control where you know. So as a child, I learned the importance of banking, but I've seen what banks do when they shrink in my community and I've seen what happens when they exit in our community.

So I grew up in a part of the west side of Atlanta called the Collier Heights ABCL community. Now, when banks started to leave our community, what replaced them were check cashing places and predatory lending places. And what I saw was an undercurrent of robbing poor people, essentially. So if you cash the check for a hundred bucks, you're a mom with two children. If someone's taken 20 points off a dollar for you, that means you get 80 bucks and you're forced now to contend with taking care of you and two children with 20 dollars less every hundred dollars you check or twenty to twenty five cents of every dollar taken.

And that's just grossly unfair. It never gives you an opportunity to properly set up a bank account. It never gives you an opportunity to teach your children banking. It never gives you an opportunity to get out of the money or save because you're constantly living a secular life of giving just enough to get by and being robbed.

And so when a group of community leaders from Atlanta reached out to Michael saying they wanted to start a digital bank, one that would serve communities of color as a way to close the wealth gap Michael was in, they named the bank Greenwood after the Greenwood district in Tulsa, Oklahoma, in the early nineteen hundreds.

That neighborhood was among the wealthiest black communities in the country. It was known as Black Wall Street, but in nineteen twenty one it was burned to the ground by a white mob.

It was a community. It was a community of people that were helping to forge America going west. They had been freed and they have set up a town within the town themselves. And because of hate and animosity, bigotry and racism, it was destroyed. And we decided that the spirit of Greenwood should not be destroyed. The spirit of what Detroit was, what Harlem was and what Washington, DC and the DMV area was with Inglewood was what Houston's Fifth Ward.

And there were those areas where once black enclaves, many of them still are of power, wealth and the ability for working class blacks to accrue something and have themselves and their children move up into the middle class. Greenwood represents that spirit. Next year, it never dies. So what we're talking about is black people having the ability to participate in capitalism in a way that they see fit that benefits them as an individual in their community. And it's better for the greater community.

You know, people in the wider community need to understand that. Why? Wider community need to understand that when the black community is doing better economically, the entire system does better because capitalism needs products and services. We provide both. Capitalism needs customers. We are that. And we also need some equity and ownership and we deserve that. So Greenwood is a nod and acknowledgment to the place that once was it is it not an acknowledgement to the spirit that is?

And it is the first step in a step that our platform will grow into to help many of us rebuild the greenwoods wherever we are.

What kind of bank are you envisioning? Well, right now, we're a banking platform. What I'm envisioning is that becoming an actual bank, one day you start as an acorn, you plant, you get sunshine grow. Make sure she kalpen gets on it and eventually you have an oak tree. But that takes a while. We are the first stage in a new form of banking and that form of banking is happening now. My 30 year old bank, she banks right from her SailPoint right in her hands.

So my grandmother would march me into a traditional bank and the 40 bucks that made selling grass that I thought I was going to get to spend on six, like she would make me put 20 bucks in a bank account. My daughter with Greenwood, she gets to do banking directly from her cell phone. So she's going to be handling money at a much more mature pace than I was.

Who do you see your bank as serving? Who are your target customers?

The black and Latino working class in the immediate Apsey Asabi on a bigger scale, everyone who wants home loans, auto loans, and especially creative's because this company is in part created by creative. So they understand in a city like Atlanta, creatives and creative starting businesses is more sure-fire than other places. But in terms of who can it help in the very immediate time, Lightbourne, it helps the working class, because if you're a member of a working class society here, you understand that there are a hundred and ten different ways to take a dollar out of your pocket just for adults.

You know, if you overdraft in a regular bank account, they charge you twenty five and thirty seven bucks. If I didn't have the three bucks you overdraft me for, where am I going to get the other thirty three bucks to pay you back. So these type of things are evil almost in their nature, in the way that they keep poor people poor and green. What is the alternative?

Is this a problem facing poor black communities or is this a problem facing all poor communities?

Well, it's facing all poor communities. The problem though is blacks have never been allowed to increase the wealth that other communities have.

So other poor communities should be helped, can be helped and are welcome to Bangor Raywood. The reason I specifically am messaging it to black people is because of the wealth disparity in America. To blacks. It's easier because a lot of Americans have a four hundred year head start, even African Americans who came here through Ellis Island because redlining, the refusal to acknowledge the GI Bill for black people, Jim Crow laws, it put them ahead of the foundational blacks that had been here.

So every step of the way, the ability for blacks to do well has had obstacles. And finally, it seems that that doorway or a pathway to joining the American dream in terms of accruing wealth is there in Greenwood is one of the many ways you can do that. But you must you must take control of your dollar in this country in order to take control of your destiny. So everyone, in a word, everyone is invited to be a part of Raywood.

We're speaking specifically to blacks and Latin. That's when you hear us talk because it's like triage in a hospital. They're in most desperate need of support right now. After the break, what that support looks like. At Facebook, we continue to take critical steps to better secure our platforms, including more than tripling safety and security teams to thirty five thousand people and partnering with security researchers, other tech companies and law enforcement. What's next? We support updating Internet regulations to address today's challenges and hold companies, including Facebook, accountable for combating foreign election interference, protecting people's privacy and enabling safe and easy data portability between platforms.

Learn more at about Fab.com regulation. Welcome back. What strategies does Greenwood have to reach black communities and communities of color where other banks have failed?

Well, first they want to be there. I can't always be a hero in a world of mass exodus, you know, where grocery stores and banks are both exiting what they call depreciated or underappreciated spaces. Typically, black or brown people live in those places. Greenwood actually wants to be there. Greenwood wants to be your bank. So I think that people understand from a trust factor, we're coming in very serious. The other thing they're doing is they're doing some things that are cool around here working at AutoZone.

Right. And there will be months where rent is due on Wednesday, but shooting it paid the Friday. Those times I really sort of used a banking institution that understood that and that would let me cash not check to Greenwood. Does them to some people, you know, that doesn't sound like a big deal. But when you're working class, you know, as a 23 year old man with two children, that extra one hundred and twenty five dollars pay in terms of what I would have to pay if I was late with my rent determined if my daughter could go to nursery for a week, you know, in a matter.

So that is a very big deal to me. And also, I think in over maybe 20, 30000 places, they'll be able to use the ATM card for free. That's a big deal that matters to me as much now when I have to pay an extra three, four or five bucks just to pull money out. But I remember a time in my life where that was a big deal. You needed that five dollars and not to have an overdraft be.

One of the challenges community banks have faced is having a hard time getting enough deposits.

Yes. Well, you, Michael, be depositing your money in Greenwood. Absolutely.

I'll be depositing some of my money every week because that's my grandparents taught me. You don't ever put all your money in one place like my grandmother when she died, had money in three banks, two black banks, one national bank. And we still have two grand up on our carpet.

So so they would absolutely will get an account for me, will give an account to my wife. I want to get accounts from all four of our children. If Greenwood is successful, what effect do you hope it will have? I'll tell you, I have a state and local right. So I don't know things say the world, but I do know that states can provide good examples for things that can be emulated over and over again. If Greenwood works for me on a very local level, I start to see check cashing places in Atlanta close because I know that people have an opportunity to keep their job.

That's on a very basic level.

If works as effectively as I think it does in the next few years, we will start to see can't hold a neighborhood that I grew up in that was 80 percent home ownership and 20 percent renter has now turned into 70 percent renter, only 30 percent homeownership. I'd like to see 60 40 in the next few years and get back to the 80 20, because homeownership is the first sign of wealth in this country. If your parents have something to leave you multicam a piece of land or house it, get you or put you at a disadvantage to actually enter and remain in the middle class.

You made this passionate speech after the killing of George Floyd, and one of the things you said was that people need to strategize, organize and mobilize, plan, strategize, organize and mobilize. So from a dollar perspective, if I plan to strategize on plotting out what I'm going to do with my dollar, if I plan and strategize with others, what to do with that dollar, let's concentrate our dollar and deposit into a place like Greenwood.

Then we have organized a power grab that organized because lending dollars to other people or businesses that will service to our community and being mobilized in dollar by helping to get car loans, home loans, business models, and those places should replace the predatory businesses that are there.

They should add additional competition to capitalism, not only to the banks, but some small and medium businesses that will come out of there.

And that on the other side should be more beneficial for the customer, because where there's more competition, usually prices fall or become more adequate to what the customers like.

And I think that we have the potential to do that. And if I didn't, I wouldn't be here. Michael, thank you so much for joining us. Thank you so much, Kate. I appreciate you.

That's all for today, Thursday, October 15th. The Journal is a co-production of Gimlet and The Wall Street Journal. If you like our show, follow us on Spotify or wherever you get your podcasts. We come out every weekday afternoon. Thanks for listening. See you tomorrow.