Why America’s First Black Female Bank Founder Is Still Owed A Great Debt

From Forbes’ new CultureX series: At the dawn of the 20th century, Maggie L. Walker taught a generation of women how to achieve financial independence and enrich their lives.

---

In 1901, a 37-year-old daughter of a former slave and white Confederate soldier addressed the members of her Black fraternal society in Richmond, Virginia, and posed a provocative question: “Who is so helpless as the Negro woman?” Maggie L. Walker asked the Independent Order of St. Luke. “Who is so circumscribed and hemmed in, in the race of life, in the struggle for bread, meat and clothing, as the Negro woman?”

Walker responded with a bold plan to address these inequities. She proposed the creation of a local department store and a newspaper to provide business opportunities for women in the community. Then she revealed the cornerstone of her vision: “First, we need a savings bank,” she said. “Let us put our moneys together….Let us have a bank that will take the nickels and turn them into dollars.”

As Walker saw it, patronizing white-owned banks—which granted Black citizens, and women in particular, business loans at oppressive rates, if at all—would continue to “feed the lion of prejudice.” It wasn’t just rhetoric—Walker's plans had already been in motion for some time. Two years later, she opened St. Luke Hall, an office building in Richmond’s Jackson Ward that eventually housed her private office, the Order’s vault, and a printing press for her newspaper, The St. Luke Herald. She studiously observed the operations of other banks, spending several hours a week at the white-owned Merchants National Bank of Richmond. At the same time, Walker recruited new members for St. Luke to build up the customer base she knew was necessary for success.

“It's one thing to say, this is something that you want to do. It's a completely other thing to actually make it happen,” says Shennette Garrett-Scott, a professor of history and African American studies at the University of Mississippi. “There just was no clear path that this was actually going to happen.”

But on November 2, 1903, thirty-eight years after the end of slavery, Walker opened the St. Luke Penny Savings Bank, becoming the first Black female bank founder in America. Her bank offered checking and savings accounts, mortgages, and investment capital for local entrepreneurs, who would help shape Jackson Ward into a thriving center for Black businesses. At the same time, Walker also handed out small coin banks to help customers save at home and encouraged them to come back to St. Luke when they had accumulated at least a dollar.

That first day, 280 customers deposited more than $9,400 (or about $280,000 today), including the largest deposit of $441 and one account that was opened with just 31 cents. A decade later, Walker’s bank was managing $200,000 in assets (or $5 million in 2021).

More significantly, Walker correctly anticipated her bank’s halo effect. “Through all of the work that she did, it was Black women who were in the offices,” her great-great granddaughter Liza Mickens says. “She was the largest employer of Black women in the city of Richmond.”

---

When Maggie Lena Draper was born in July 1864, the year before the Civil War ended, Richmond was still the capital of the Confederacy. Her mother, Elizabeth Draper, worked as a kitchen servant for Elizabeth Van Lew, an abolitionist and Richmond’s most notorious Union spy.

Although her mother could not read or write, she instilled a deep respect for education in her daughter, and young Maggie excelled academically. She graduated from the Richmond Colored Normal School in 1883 and took a job as a teacher at a local middle school, which paid her $35 per month. But her marriage to local brick contractor Armstead Walker—whom she had met during a Sunday school program at her church—ended her teaching career. At the time, Virginia law forbade married women from being employed as teachers.

Her career hamstrung by sexism and racism, Walker began rising through the ranks of the Independent Order of St. Luke, which she had first joined in her teens. When founder William Forrester mismanaged the organization’s finances to the point of near collapse—St. Luke had lost two-thirds of its members, counted just $31 in its treasury and was nearly $400 in debt—Walker saw an opportunity. Agreeing to accept one-third the salary that Forrester had received, she took over St. Luke in 1899 and refilled its coffers by charging longtime members a higher tax and selling insurance. Within a year, Walker doubled membership to 907 people and had increased the Order’s treasury holdings to a net $1,288 (or $38,000 today).

In 1903, to further capitalize St. Luke Penny Savings Bank, Walker sold shares of it for $10 apiece and required her board of directors to purchase ten shares each. While some had to take on debt to meet the minimum, the bank loaned $8,400 (roughly $250,000 today) to its customers in its first year of operation, double what Walker had received from sales of her bank's stock.

Walker wasn’t in it solely for the money. “She wasn’t self-interested,” notes Ethan Bullard, the museum curator for the Maggie L. Walker National Historic Site in Richmond. “She said, ‘Take out a loan from my bank and create your own business.’”

She appealed to Richmond’s working class by offering longer banking hours, including nights and Saturdays. She also accepted deposits that were less than a dollar to encourage more women to contribute their savings. These strategies paid off, and by the mid-1920s, St. Luke had accumulated $500,000 in assets (around $7 million today) and had provided mortgages for 645 homes.

---

---

In June 1913, the bank had nearly $120,000 in outstanding loans (or $3.8 million today) and $17,004 in cash deposits (around $538,000). St. Luke also pioneered what we now consider microlending—the bank made loans as small as $5 (around a week’s wages for most customers at the time) and considered a wide range of factors in its underwriting. Character, work ethic and community ties often went into lending decisions, compared to more traditional standards such as employment status and income.

Still, the dream wasn’t big enough for Maggie Walker.

While the Broad Street commercial district technically permitted Black customers to shop at the time, they could not use the main entrance or try on merchandise due to Richmond’s Jim Crow laws. So in 1905, Walker expanded her empire and founded the St. Luke Emporium, a department store and the new home for St. Luke Penny Savings Bank. The store was primarily staffed by Black women, featured Black mannequins and allowed Black customers to enter through the front door.

“Buy Black,” Walker exhorted in a 1906 speech. “Every time you set foot in a white man’s store, you are making the lion of prejudice stronger and stronger.”

Even before the Emporium opened, Walker faced serious resistance from local white merchants, who feared her growing power. They offered her $10,000 ($300,000 today) to walk away from the project—or about $3,000 less than the building alone was worth. When she went forward anyway, they sabotaged the Emporium by starving its resources. “There was nothing else they could do, except shut off the supply chain, to stop her,” says Rasheeda Creighton, a Richmond-based business consultant. Compounded with some Black merchants’ fear of retaliation for selling their wares at the Emporium, it closed just six years after opening, in 1911.

Walker’s personal life wasn’t much easier during this same period: In 1915, her son Russell accidentally shot and killed her husband, mistaking him for an intruder in their home. Walker also developed Type 2 diabetes, which required her to use a wheelchair for the last decade of her life.

“She was discriminated against all her life,” says Bullard. “She was a woman in a man's world. She was African American in a Caucasian world. She was disabled in a very ableist society.”

Such resilience served Walker well as the 1920s were coming to an end and financial collapse lay ahead for America. Walker saw how white regulators were cracking down on Black banks, implementing fines and effectively shuttering operations; by the end of the decade, only three Black-owned banks remained in Richmond. But Walker also saw the way white-owned banks operated, acquiring smaller competitors, and wanted to emulate that.

“The Great Depression came really early in the African American community,” explains professor Garrett-Scott, author of Banking on Freedom, an economic history of Black women before the New Deal. “And she was very aware of these machinations, of white banks’ tendencies to swoop in and take advantage of the closing of Black banks. And she wanted to head that off.”

Walker approached the heads of the two other Black-owned banks, Second Street Savings and Commercial Bank and Trust, and proposed they combine operations. In late 1929, St. Luke merged with Second Street to become Consolidated Bank and Trust Company; after struggling for two years on its own, Commercial folded itself into the union in 1931. That institution not only survived the Depression, it continued into the early 21st century. In 2005, Richmond’s Consolidated Bank lost the distinction of being the country’s oldest Black-owned bank when Abigail Adams National Bancorp became its parent company; in 2011, the West Virginia-based Premier Financial bought Consolidated from Abigail Adams and formed Premier Bank, a regional bank that now has $1.3 billion in assets.

Not all of Walker's business ventures were so fortunate: The Independent Order of St. Luke, which Walker had grown to 100,000 members by the late 1920s, saw membership drop and dues go unpaid during the Depression—and this, in turn, meant less money to run the St. Luke Herald, her weekly, 12-page newspaper. In the early 1930s, the Herald became a monthly bulletin.

Walker died of diabetic gangrene in 1934. According to an analysis of her will, her net worth at the time was $45,000—or nearly $900,000 today. Following Walker’s death, her daughter-in-law preserved the 18-room, two-story home she and Armstead had purchased in 1904—which in 1935 was assessed at $9,810 (around $190,000). In 1979, Walker’s granddaughter, Maggie Laura Walker, sold the home to the National Park Service; it is now a designated National Historic Site.

Today, just as she did in her lifetime, Maggie Walker still watches over Richmond. In 2017, years before the Confederate statues were removed from Monument Avenue, a sculpture of her by the artist Toby Mendez was dedicated at the intersection of Adams and Broad Street—around the corner from the original St. Luke bank.

For Liza Mickens, her 23-year-old great-great granddaughter, the statue's geographical location is especially salient. “To have Walker, standing at the gateway of Jackson Ward, is a full circle moment for our people, for our community,” she says. “Between the reckoning Richmond's had with its history and seeing other monuments go, it really proves the need to have monuments that champion the stories that have been overlooked and the stories that have been repressed.”

In recognition of Walker’s dedication to financial inclusion, PayPal established the Maggie Lena Walker Award last year for female entrepreneurs who are helping to close the wealth gap. But her spirit is most alive in Richmond’s Jackson Ward Collective. Founded by Melody Short, Rasheeda Creighton and Kelli Lemon, the collective is a small-business incubator, giving micro-grants and entrepreneurial advice to Black-owned businesses in Walker’s hometown. The three entrepreneurs had been talking about building an accelerator for Richmond’s Black-owned businesses for years, but officially launched Jackson Ward in 2020. Within its first two weeks of opening, 150 businesses had signed on.

The collective’s goal is to rebuild the Black entrepreneurial ecosystem that Walker championed and provide businesses with capital they need to survive. “We have some elders in the community,” Lemon says, “and they actually call us the Daughters of Maggie.”

Editor’s note, 10:15am ET March 21: This post was updated to reflect that Merchants Bank was a white-owned bank; that St. Luke assets were $200,000 in 1913; and that Virginia law specifically forbade married women from being employed as teachers.

CultureX is a series that celebrates decades of forgotten Black entrepreneurs.