Banking

"Empowering Communities With Capital"

Mission Statement: Our goal is to empower low-income and minority communities by attracting investments for health, education, homeownership, employment, and minority entrepreneurship using a holistic advocacy approach.

The Banking Industry as a Model for Fortune 500 Corporations

Although the Greenlining Institute is often highly critical of many specific bank actions, it is also working closely with the CEOs of major financial institutions and the four major federal banking regulators to ensure that the banking industry can more effectively serve our nation 112 million minorities, 5 million minority-owned businesses and the 73 million Americans who are underbanked or unbanked.

Greenlining has partnerships with Bank of America, Citigroup, Washington Mutual, Wells Fargo, Wachovia, Union Bank, Bank of the West, Comerica and US Bancorp as well as with smaller banks such as Rabobank and East West Bank.  In addition, Greenling has CRA-like partnerships with Merrill Lynch, the only investment bank that has a CRA-like agreement, and with First American, the only insurance company to have a CRA-like agreement.

These agreements involve over 2 trillion dollars in CRA commitments over 10 years, as well as major philanthropic commitments to underserved communities, supplier diversity commitments, community development commitments and affordable housing commitments. 

CRA Agreements

Over the last year, Greenlining has reached four major CRA agreements.  

(1)  A 150 billion dollar CRA commitment by Wachovia for California. 
(2)  A 11.5 billion dollar CRA commitment by the mid-sized East West bank. 
(3)  A unique agreement with Rabobank (the giant Dutch bank) to turn San Joaquin farmworkers into farmowners and
(4)  A CRA agreement with Merrill Lynch that will tap its innovative leadership for micro-enterprise, community development, small business lending and affordable housing. 

As part of Greenlining’s efforts to maximize minority opportunities, while enhancing bank profits, and to ensure that CRA agreements are met, Greenlining meets semi-annually with the senior management and the CEOs of all banks it has CRA agreements with.

Financial Institution Management and Supplier Diversity

As a result of the change in federal banking regulators and a new congress, Greenlining is active in a number of changes affecting the banking industry. Greenlining has been promoting a new banking bill that encourages far greater diversity at the senior management of banks.  Greenlining also produces annually an analysis of the diversity of the boards of directors of major banks (click here for report).  With the support of the Comptroller of the Currency, John Dugan, and John Reich the Director of OTS, Greenlining is developing with all the major banks a common metric and goals for supplier diversity directed at small minority-owned businesses. (see related annual report on utilities and supplier diversity here)

Philanthropy

Greenlining has taken the lead nationally in urging financial institutions to quadruple their philanthropy from 0.5% to 2% of pre-tax income.  This would increase banking philanthropy from $1.5 billion a year to $6 billion a year.  At 2% of pre-tax income, Citigroup and Bank of America for example, both of whom are behind Wal-Mart in philanthropic giving, would each give 600 million a year. 

Affordable Housing & Wall Street Accountability

The banking industry is rarely a redliner today.  However, most of the major financial institutions have been unable to close the minority homeownership gap due to environmental elitism, archaic tax-policies, and excessive government red tape. Greenlining is working with 15 financial institutions and a number of legislators in California to change this (visit the latest housing report here).

Fannie Mae, Freddie Mac and particularly FHA have failed to be a significant force in creating affordable housing or closing the minority homeownership gap.  Greenlining is supporting congressional efforts to change this.

Beginning in 2003, Greenlining took the leadership position in criticizing irresponsible exotic adjustable rate mortgages (ARMs).  As a result of March 2007 meetings with top regulators and efforts at the state and federal legislative level, Greenlining is supporting

(a) national regulation of all home loan originators in order to substantially increase standards, uniformity and enforcement

(b) regulators and congress holding Wall Street investment banks, such as Lehman Brothers, Bear Stearns and Merrill Lynch, responsible since they originated or provided credit for 70 percent of all subprime lending over the last 2 years and

(c) a new fiduciary standard of responsibility 

In addition, Greenlining is supporting a foreclosure moratorium for six months on all owner-occupied not-for-speculation loans for families with 120 percent or below median income.  Greenlining believes that there is today a major disparity between the laudable policy objectives of federal regulators and bank CEOs and actual implementation.  For example, loss mitigation efforts to prevent foreclosures are not meeting expectations.

Regulation B

One major gap in regulator and bank efforts to reach out to America’s 5 million minority-owned businesses is the adamant refusal of the Federal Reserve to allow banks to track and market to minority-owned businesses much as they can for homeownership.  Greenlining has taken a lead role in trying to overturn this Federal Reserve position, known as Regulation B, and is supporting the GAO investigation of the role the Federal Reserve plays in blocking minority small business lending. 

Small Business Administration (SBA) Lending

Greenlining has, since the Administration cut back on SBA support, been a critic of SBA practices but a strong supporter of the overall program.  Each year Greenlining issues a report detailing the minority accomplishments of the major SBA lenders (click here to visit our latest SBA report). 

Notable Regulator Accomplishments

Sheila Bair, Chair of the FDIC, is leading efforts to bring 73 million underbanked and unbanked Americans into the banking system.  She has the most diverse upper management staff and has taken the lead in promoting national responsible subprime lending.

John Dugan, Comptroller of the Currency, has taken the lead in promoting doing business with minority-owned business as a CRA activity and in urging responsible adjustable rate mortgage practices.

John Reich, Director of OTS, has moved his regulatory organization from an irresponsible outlaw into a well-respected regulator who strongly supports the needs of America’s 112 million minorities. 

The Federal Reserve, which should, by the nature of its responsibilities, huge budget, and large staff, be the leader in CRA and minority and subprime issues, has not yet determined how to be a leader.

Notable Bank Accomplishments

Citigroup, under CEO Chuck Prince, who was a keynote speaker at Greenlining’s 2007 conference, has taken the national lead in developing ethical principles that assume at a minimum a quasi-fiducially relationship to borrowers.

Wells Fargo continues to be the major leader in philanthropy directed at underserved communities.

Comerica, in partnership with Greenlining, has developed a plan to empower small non-profits and, along with Citigroup, is a leader in funding small micro-enterprise programs.

Bank of America has taken a courageous national leadership position in favor of serving all immigrants, including the undocumented. 

Countrywide Financial continues to be the national leader in helping to close the minority home ownership gap and its CEO urges that we not only help close the minority homeownership gap, but that we end the gap. 

Greenlining’s Semi-Annual Meetings with the Regulators

Besides its semi-annual meetings with the senior leadership of major banks, Greenlining meets semi-annually with Federal Reserve Chairman Bernanke, Comptroller Dugan, FDIC Chair Sheila Bair, and OTS Director John Reich as well as with key congressional leaders.  Greenlining’s next meetings with the four top regulators is set for November 27^th, 2007 in DC.

The Greenlining Institute’s 14^th Annual Economic Summit

Greenlining’s annual conference features key leaders from the banking industry.  The April 2007 conference, attended by 1,100 minority business, community leaders and 40 corporations, featured as keynotes speakers: Citigroup CEO Chuck Prince; Richard Davis, CEO of US Bancorp; U.S. Comptroller of the Currency John Dugan; Sheila Bair, Chair of the FDIC; and Janet Yellen, the President of the Federal Reserve Bank of San Francisco.  Past speakers have included Federal Reserve Chairs Bernanke and Greenspan, Speaker of the House Nancy Pelosi, and the CEO’s of Merrill Lynch, Washington Mutual, Wells Fargo, Bank of America and Countrywide Financial.