Myth Busting Women’s Banking for Women’s History Month

Pair of blue Aldo high heeled shoes with floral print. One is resting on a large white block. The other is hovering above against a light blue wall.

I keep seeing articles and some allusions on big financial sites that say something along the lines of, “It was illegal for women to have bank accounts in their own name before the 1960s.”

And this just isn’t accurate.

While I’m all about pointing out the financial barriers women face — and banking was and is one of them — I’m fairly certain this one isn’t true.

Let’s talk about what really happened in the 20th century and prior to get a better look at women’s banking history.

Not all women

Let’s be perfectly clear with something upfront: Discourse around women’s rights in American history most often revolves around white women’s rights. Some of the laws we’ll cover today date back to a time when slavery was still legal. Some of them were influenced by people who used blatantly racist arguments to prop up the rights of white women.

And we can see the residual effect of that racism even to this day. Black individuals and other marginalized populations are still being denied credit or being given access to less credit than white individuals in 2023. Some offenders over the past 10 years include:

  • Wells Fargo
  • Hudson City Bank
  • Associated Bank
  • Bank of America

On top of limited credit, systemic poverty enforced by redlining and a million other racially-charged laws means that you’re more likely to be unbanked if you’re not white.

If you’re unbanked because you’re in Chexsystem, you might have ended up there because of the predatory fees banks are allowed to charge on low-income client accounts. If you’re in Chexsystem that effectively means you still can’t open a bank account at most financial institutions to this day.

Further reading: Kassandra Dasent’s review of The Black Tax

Colonial America & Post-Revolutionary America

Women could participate in the economy — including banking —  in Colonial America. To be fair, the percentage of women that did participate in banking in particular was minuscule compared to total populace because there were still so many societal obstacles. Though a much larger portion of the population did engage in small business endeavors.

It was a little more complicated for married women. When you got married, you were typically subject to coverture laws, which essentially means you merge into the same legal being as your husband. In most colonies, that meant your husband could conduct business relative to your shared estate without your consent, but you could not do the same without his consent.

You could, if you were monied and powerful enough, become a feme sole trader, which was a legal allowance that let you evade coverture. In this way you could get married and still maintain your own legal estate as if you were single.

While things got marginally less good after the Revolution that established our new country in terms of banking and property rights, as pressure to raise the first generation of American men fell on mothers, by and large these same rules applied to women in the early days of America. Things were particularly favorable to women (at least in the context of the times) in the Northeast, and New York state in particular had some progressive laws in this rite.

FUN FACT: Wanna know something that was widely accepted in early America? Abortion.

When things started to change course

Things started to change for women in the Victorian age leading up to and including the Industrial Revolution.

Why did they change?

Ironically enough, because of the rise of one specific woman to power.

Queen Victoria of England is purported to have some pretty strong views on women’s roles in society, which included unpaid domestic labor and motherhood as a divine calling. ‘Proper’ women weren’t meant to work outside the home. Her philosophies spread to the States.

This was also the era when women were considered to be morally superior, and had to take on the burden of amending men’s iniquities while being discouraged from building their own independence.

In many ways, this was a rebellion against the relative gains women’s rights had experienced in England in the 1700s.

How much of these popular thoughts of the time can actually be ascribed to Victoria’s opinions is a little cloudy. While she is on record saying women shouldn’t pursue certain professions, and after her death some comments she made casting the women’s rights movement  in a negative light surfaced and circulated, she was also used as a foil by both sides of women’s rights movements simply because she was a woman in power.

A lot of women who weren’t rich still did work. Things weren’t equal towards them, and there was a lot of workplace harassment. (Arguably while things have gotten better, these circumstances still exist in 2023.)

Rich women often passed from being an attachment on their father’s estate to merging into their husband’s estate, without building up any assets or savings they could truly call their own.

Early laws for women’s property and banking

It’s interesting that the number of laws protecting women’s financial rights rise exactly when those rights were effectively being further restricted because of shifting societal norms.

Most of these laws applied to married women because, again, if you were single or widowed or  divorced, you were still allowed to hold property or open a bank account. At many, though not all, banks, you might need a male family member’s consent, but this was  a bit less common than if you were married.

Just because you were allowed to manage your finances independently if you weren’t married didn’t mean you didn’t face discrimination. A bank might refuse to lend to you or allow you to open a bank account based on your gender, though a lot of the culture around those laws varied in different states.

There were often ‘Ladies Waiting Rooms‘ at banks that were friendly to women. Depending on the state and the individual bank, these rooms were meant for you to wait while your husband conducted business, or for you to wait while someone in the ‘Ladies Department’ prepared for the meeting concerning your own, independent finances.

1839: Married women can hold property in their own name in Mississippi. But like…

Mississippi is often credited as the first state that passed laws allowing married women to hold their own property. But the story is messy.

Remember how I said women’s rights were often advocated for in a racially-charged way?

This story is no exception.

Both legal cases that culminated in the passage of the Married Women’s Property Act of 1839 centered around a woman’s right to own a slave as her own property.

The other aspect of this story is that while Mississippi was the first state to feel the need to pass this type of law, Louisiana Civil Code may have had some modicum of influence on the case. And Louisiana Civil Code already allowed married women to maintain their own property.

Please note that I do not condone the language used in the following piece, but you can take a deeper dive on the history of this specific law here.

1848: Married Women’s Property Act in New York State

In 1848, New York State passed a law that gave married women the right to own their own property. It should be noted that despite being a Northern state, slavery did still happen in New York. So it’s not like that element was taken out of the equation.

This law gave married women the right to:

  • Not be automatically liable for her husband’s debts.
  • Enter contracts independently.
  • Collect rents in her own name.
  • Receive inheritances in her own name.
  • File a lawsuit on her own.

Every single other state followed suit over the next 52 years, with similar laws on the books across the country by 1900.

1862: First state allows women to open bank accounts regardless of marital status.

That’s right. Alllll the way back in 1862, California became the first state to pass a law that explicitly allowed women to open a bank account in their own names — regardless of marital status. So even married women could participate independently.

Something to note, both with New York and California, is that these laws were impacted by people involved in the Suffragist movement. Many in the Suffragist movement were notably racist, using the rights that Black men technically but not always effectively gained after the Civil War as an argument for why white women should be granted political power and the right to vote.

Banker of Note: Maggie Lena Walker

1862: Homestead Act

In 1862, Abe Lincoln signed the Homestead Act. There’s a lot to say about the Homestead Act, but there are two pertinent points in today’s context.

The first is that it pushed cultural norms by not requiring a male cosigner for single women to participate in homesteading in their own name. While it wasn’t a banking regulation, the fact that this policy was included was of influential note.

The other thing to note with the Homestead Act is that, once again, systemic obstacles made it difficult for Black people to participate regardless of gender. Kassandra keyed us into the fact that while former slaves were eligible, the application fees were high enough to be prohibitive to an already economically disenfranchised people, resulting in 99% of the beneficiaries of the Homestead Act being white.

So, what happened in the 1960s, then?

To be real with you, I’m not 100% sure what people are referring to when they say something in the 1960s happened to make it legal for women to hold a bank account. All I can find are unsourced declarations parroted across finance sites over the past couple of years.

There were laws passed that protected women against (certain types of) pay discrimination when it came to the minimum wage, and against certain cases of employment discrimination. White women did piggyback their way into the Civil Rights Act of 1964, too, though this law didn’t apply to banks.

What I can tell you is what happened in the 1970s.

RBG and credit

Okay, so we know that at least since the mid-1800s if not prior, women could open a bank account in their own name. Whether they could do it as a single woman or a married woman varied by state. And even in states that allowed it, there were cultural practices that effectively ended in discrimination.

Credit was even more of a problem, and it was becoming an increasing concern as Americans started relying more heavily on credit in the 20th century. In these instances, married women were often still considered to be one legal body with their husbands, and banks often required the husband’s signature and assets to be considered on the application.

In this space, single women also faced discrimination, especially if they were younger and of marrying age. The assumption was that once they got married, they’d no longer work or have an income, and therefore they’d be bad accounts to take on.

Perceived fertility wasn’t the end all and be all, though — we were still holding onto some Victorian values that women were the weaker sex, more emotional and incapable of handling practical, logical matters on their own. Like money, and more specifically, credit.

In 1974, after a lot of great work from RBG while at the ACLU, the Equal Credit Opportunity Act passed, which, among other things, required banks to consider credit applications in a woman’s own name regardless of marital status, and only allowed banks to require the consideration of a husband’s finances if it was a joint application.

My understanding (I am not a lawyer) is that these regulations applied to anyone who issued credit, and because banks and financial institutions are the ones that tend to offer credit, they also could no longer make these requirements of those applying for deposit accounts, either.

Though, again, depending on where you lived, you may have already been protected from that discrimination by state law for deposit accounts in technicality if not practice.

Why is this important?

Were things harder for women in regards to banking prior to the 1970s?

Absolutely.

But it was not illegal for a woman to hold a bank account prior to the 1960s. Some women did, and some women also held mortgages and other financial products in their own names. Some women were independently wealthy of their spouse or lack thereof.

A lot the women who did hold bank accounts were single — whether they be single mothers, never married, or widowed. Overall, they faced a lot of financial obstacles particularly when it came to workplace and employment discrimination. But when they were allowed to earn money, some were allowed to manage it, and many of them deserve some props for doing so.

It’s not just the erasure of women’s contributions that’s important. When we pretend like nothing was allowed for women in the financial sector prior to the 1970s, we also erase the systemic racism built into our legal history. Many of these laws were passed in favor of white women’s whiteness, sometimes in direct and vocal opposition to the rights of Black citizens and other marginalized citizens.

We continue to see the remnants of these ideologies passed on through our laws and the practice thereof today.

All this said, I do not have a PhD in History. I am not a lawyer. If I’m missing nuance, if I’m missing laws, let me know in the comments. This conversation is open to discourse.