LV Congressman Charlie Dent is hosting a small business financing seminar today and tomorrow. Like most of us, Democrat or Republican, liberal or conservative, Dent recognizes that these small mom-and-pops are responsible for many of our jobs. Another person who recognizes this is CACLV's Alan Jennings. I've told you before about his small business lending arm, the Rising Tide Community Loan Fund. Whether it's the Birdlady of Easton or Bath's Daily Grind, the Lehigh Valley's only federally-certified microlender has been there with 76 microloans for $1,447,000 (as of April), creating or helping save 142 jobs in the process. According to yesterday's Morning Call, the fund has just been replenished with a $353,514 Treasury Department grant. Private sources also contribute to this loan pool.
In addition to microlending, Jennings was in Los Angeles last week, asking federal regulatory agencies to improve Community Reinvestment Rules to make credit more accessible to our small businesses, especially in low and moderate income communities.
Alan L Jennings, Executive Director of the Community Action Committee of the Lehigh Valley, is a long time advocate for access to credit for low-income families and their neighborhoods. His testimony in Los Angeles will address issues like collection and disclosure of small business lending data by race and census tract, opportunities for the public to be better informed about and comment on bank plans to merge or close branches, stronger rules related to the even distribution of branches (where most small business lending is done) throughout communities, not just in upper-income census tracts, and better consistency in rule interpretation among and within the regulatory agencies.
Jennings told the suits that in the "most dysfunctional credit market in decades," regulators themselves have contributed to the credit crunch by subscribing to the notion that lending in lower-income communities is too risky when the reality is that community development lending "is safe and sound."
He also argues for more transparency in Community Reinvestment Rules:
"Public comment periods are not publicized (in our region the only branch in one of our moderate-income boroughs closed and nobody knew until the bank informed their customers, long after the regulator approved; the low-income elderly folks who don’t drive never knew what hit them.) Large bank mergers occur, affecting hundreds of communities and hundreds of thousands of people, and no public hearings are held. Not only should hearings be held, but large mergers should only occur when the surviving bank offers a community reinvestment plan that includes public input."
Noting that bank branches "remain the most visible icon of banking, for everything from deposits to mortgages to small business lending," Jennings is shocked that many branches can have "satisfactory CRA ratings despite having not a single branch in a low- or even moderate-income census tract; in some cases, they don’t have a branch in an entire city but still get away with it."
13 comments:
Oh boy here we go again, blame the banks. Many of the nation’s current problems were instigated by similar altruistic but misdirected activists’ years ago. Round and round we/ America go, circling the drain.
Scott Armstrong
Robin Hood revisited.
Jennings would have you believe that as horrible and greedy as those bankers are, they would happily lose the scads of dough they could make on that "safe and sound" lending, just to get their bigot on.
Jennings is out of order. Banks have been contributing to community reinvestment since the mid-80s. Whose fault is it that lenders were forced to give mortgages to people who could never have afforded certain priced homes? Yesterday's paper featured a couple in financial trouble who needed to borrow $40,000 more from the seller for a $300,000 priced home and no mortgage underwriter thought that was odd?
. "In addition to microlending, Jennings was in Los Angeles last week, asking federal regulatory agencies to improve Community Reinvestment Rules to make credit more accessible to our small businesses, especially in low and moderate income communities."
And where exactly is a low and moderate income community? Certainly not Bethlehem that now boasts not only a multi-million dollar casino, the soon-to-be world famous Musikfest cultural headquarters, numerous colleges and a university, an award-winning five-star hotel and an historic district that annually draws thousands.
Alan Jennings is a saint. You should back off on him.
The bankers' problems were not with bad loans to minority and downtown locations but no doc loans to suburbs.
The government should not be intruding on what should be a two party transaction between bankers and borrowers. If the government wants to lend money to those who cannot meet conventional standards then they should do it themselves and leave the private institutions out of it.
Allen Jennings is a saint only if you believe his views on the dynamics of modern poverty are correct. I think he is a well intentioned fool. One of many.
Scott Armstrong
Banks being forced to make loans to bums everybody knew would never pay is what caused this mess. If repeating the same action and continuing to expect a different result are the definition of insanity, Jennings endorses insanity.
On the other hand, more spirit and initiative crushing "stimulus" will certainly keep those who make their salaries in the poverty business - in business.
I thank God for the Allen Jennings of the world. If not for them who would think for the ignorant lower classes.
Spending/consumption is a downhill effort -- especially, spending funded by the borrowing from future economies, which is the exact opposite of investing in those future economies.
The future is here. Now what?
Where is the incentive for running uphill? Where is the incentive for taking on the discipline of risk, and creating opportunities to run uphill together?
Every government dollar depends on taxation of the private economies, current or future. Government credit is just an obligation tax future economies -- the opposite of investing in them.
In our economies, we can participate in one of two ways: ROI at risk, or ROI guaranteed, as wages/salary. But in order for there to be guaranteed ROI, someone must guarantee that ROI, and that someone must be participating with ROI at risk-- at disciplined risk, if our economies are going to be focused.
Any scheme which attempts to shed risk onto someone else without compensation is going to ultimately pervert the economies, and/or drive them to their knees.
That is what our current tribal insanity is doing -- not just by well meaning government, but by soft-fascists who leverage the miscues of well meaning government fat-fingerings in the economies into a gaming of the system.
A gaming of the system that couldn't exist without the fat-fingering of government. As in, the spectacle of 'mortgage backed securities.'
As in, the systemic replacement of 50 sets of more stringent state banking and lending regulations with a single point of failure over-reaching federal model, via court case after court case and even USSC case-- a complete systemic failure to recognize the threat of monopolistic system design.
Without that fat-fingering of the mortgage marketplace by government, there is no 'CountryWide.' Only 'StateWide,' and this systemic failure never makes it past P8 of the local paper, as the balance of 49 other state experiments running parallel and not miraculously aligned on a single point of failure regulatory model easily absorb the stupidity of any one failure.
The American phrase is 'United we stand', not 'United it stands.'
It's the economies, stupid. Not 'the' economy.
Frediano, love the scarf!
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