Are Banks Abandoning Fresno Home Buyers?

The Fresno Bee
By Vedika Ahuja and Tate Hill

If you or someone you know bought a home in Fresno recently, chances are the lender wasn’t a bank. That raises a number of concerns.

Recently, The Greenlining Institute and the National Community Reinvestment Coalition analyzed federal data on California home mortgage lending for 2015, examining statewide figures and looking specifically at lending patterns in Fresno, Oakland and Long Beach. Each city had a different story.

In Fresno, the story might be titled, “The Rise of the Non-Banks.” Surprisingly, nine of Fresno’s top 10 home purchase lenders weren’t banks – a much larger presence of non-banks than in the statewide figures, and a huge difference from 2013 when five of the top 10 lenders in Fresno were banks.

Why does this matter? Traditional financial institutions like banks and credit unions don’t just make loans. They take deposits and offer savings and checking accounts, ATM services, etc. The non-bank lenders writing most of the home purchase and refinance loans in Fresno don’t offer those services.

Just as important, banks holding Fresno residents’ deposits have an obligation to the community under the Community Reinvestment Act, an important law which requires banks to meet the credit and borrowing needs of the communities they serve.

The CRA has brought billions of dollars in investment to underserved communities that financial institutions had largely neglected, including rural communities here in the Valley.

One question our findings raise is, “Where are the banks?” Wells Fargo, California’s top lender, was also Fresno’s leading home purchase lender in 2015. But no other bank – not even giants like Bank of America and JP Morgan Chase – made the top 10.

What’s going on? Many banks, including Bank of America, Bank of the West, and MUFG Union Bank hold substantial deposit shares in the area. However, we see banks pulling out of the home-lending business in Fresno, and also closing branches here. Since 2008, California has lost five percent of its bank branches while Fresno County has lost 15 percent.

That is why we are working with numerous organizations on the San Joaquin Valley Economic Justice Campaign, an effort to hold banks accountable to meeting the credit needs of low-income communities and people of color in the area.

We urge banks to increase affordable home lending to underserved populations and support housing counselors and other local organizations that build the financial health and wealth of Valley communities.

We should also consider how non-banks impact the Fresno community. These non-banks aren’t covered by the Community Reinvestment Act and don’t technically have an obligation to meet the needs of the community. Many of these non-banks are more effective at reaching communities of color than banks, with three such lenders making over half of their Fresno home purchase loans to Latinos.

This could be a good thing, but could also pose a risk, depending on the terms and rates of those loans. From the little research available, non-banks appear to charge slightly higher rates than deposit banks for similarly situated borrowers.

We did not compare rates and terms of loans given by Fresno’s non-bank and bank lenders, but this question definitely needs further research, and will become increasingly important. Immigrant communities, especially those who speak and read only limited English, could be exploited if we’re not careful.

Homeownership remains one of the most crucial ways to build intergenerational wealth. Cities, community leaders, and nonprofit organizations must work together to ensure that communities of color and low-income people throughout the Valley are not left behind as the financial industry evolves.

Vedika Ahuja is Economic Equity Senior Manager at The Greenlining Institute. Tate Hill is Senior Manager of Administration at Access Plus Capital in Fresno and a Greenlining Institute board member.


Are Benefit Incentives Not to Work a Cause or a Result?

The Wall Street Journal
by: Orson Aguilar

It must be nice to live in such a sheltered world that you can imagine, as Richard Vedder does, that Americans aren’t working because they’re so lazy they would rather collect food stamps or freeload through college on Pell Grants than get a job. Has Prof. Vedder ever tried feeding himself on $125 a month?

Continue reading “Are Benefit Incentives Not to Work a Cause or a Result?”

Are Foundations Doing Enough for Society?

Source: The Chronicle of Philanthropy | Written by: George Dean and Nativo Lopez
Now that California’s Assembly has passed legislation designed to shed light on the diversity practices of the state’s grant makers and the measure is pending in the State Senate, it is time to ask Congress to take similar action and to look more closely at just what Americans are getting from the massive subsidies they provide to the nation’s foundations. Continue reading “Are Foundations Doing Enough for Society?”

At Five Years Old, Obamacare Is Uneven and Incomplete—But It’s Working

The Progressive
by Orson Aguilar

On its fifth anniversary, the secret of Obamacare is that it’s working.

The Affordable Care Act, signed into law on March 23, 2010, is doing precisely what it was supposed to do: provide health coverage to millions of Americans who didn’t have it and couldn’t afford it.

The numbers are stark. At the end of the third quarter of 2013, just before enrollment started under the act, 18 percent of Americans lacked health insurance, according to Gallup. This translated into more than 46 million people with scant access to health care. By the end of 2014, the uninsured portion of the U.S. population dropped to just 12.9 percent. That’s still too high, but it’s the best in years.

The rates of health coverage for Americans have improved across the board, but they’ve increased the most for the groups that have had it worst. For African-Americans, the uninsured segment dropped from 20.9 percent to 13.9 percent in just one year, while for Latinos it dropped from 38.7 percent to 32.4 percent. Looked at by income, those making less than $36,000 per year made the biggest gains, with the uninsured share for them dropping nearly 7 percentage points.

But these gains have been spread unevenly. The states that embraced the new law—setting up their own health insurance marketplaces and expanding Medicaid—have seen the biggest gains.

We’ve seen this firsthand here in California, which has led the nation in implementation, helping more than 2 million people gain health insurance in the act’s first year. But states that didn’t set up their own marketplaces and didn’t expand Medicaid deprived their citizens of many of these gains. By mid-2014, according to Gallup, the states that embraced the Affordable Care Act made nearly twice as much progress in cutting the uninsured rate as those that didn’t.

The difference was dramatic. Every single one of the ten states with the largest drops were those that expanded Medicaid and established a state-based health marketplace or joined a state-federal partnership, according to Gallup.

Ah, but isn’t the law breaking the bank? No. According to a new report from the Congressional Budget Office, the law’s costs are running less than expected because health insurance premiums aren’t rising as fast as they did before health care reform.

Obamacare is not perfect. It doesn’t cover everyone, and in a country as wealthy as ours, that’s a disgrace. And it depends too much on private health insurance, a system rife with waste and dysfunction.

But while not a perfect law, the Affordable Care Act is a good law. If Congress ever succeeds in repealing it or if the Supreme Court cuts the heart out of it (as could happen later this year), millions of Americans will suffer for no reason.

Obamacare is working, and families across America are better off as a result.

Attacks on Health Care Reform Will Hurt the Valley

The Modesto Bee
By Frank Alvarez and Carla Saporta

Attacks on the Affordable Care Act — the health care reform law passed last year — are ratcheting up in Congress. If they succeed, they will hurt all Americans, and some of the greatest harm will be felt right here in the San Joaquin Valley. The valley’s representatives in Congress need to think long and hard before going further down this road.
Continue reading “Attacks on Health Care Reform Will Hurt the Valley”

Bank Regulators Flunk the Diversity Test

American Banker
by Sasha Werblin

Some of the most important regulatory agencies just fumbled a major chance to start fixing a problem that ails our financial system. Fortunately, the story isn’t quite over yet.

The 2008 financial crisis caused widespread hardship. But it particularly devastated communities of color, many of which had been targeted by predatory practices that stripped billions of dollars in wealth from those who could least afford to lose it. For several reasons, regulators and financial industry executives alike seemed to have little idea of what was happening in these communities, leaving them ill-equipped to anticipate the crisis and reduce its impact.

One such reason for these huge blind spots was, and continues to be, the financial industry’s lack of diversity. It’s a simple fact that people’s lived experiences affect what they perceive and understand. When the experiences of people of color aren’t represented in the people who serve them, important developments in those communities get missed.

To address this critical problem, members of the Congressional Black Caucus set out in 2010 to enact reforms that would help prevent similar injustices in the future. They succeeded in passing Section 342 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which created 20 Offices of Minority and Women Inclusion in the nation’s most powerful financial regulatory agencies.

OMWIs were given the responsibility of creating standards that would diversify the financial sector’s hiring and contracting opportunities. This represents a historic chance to improve connections between financial institutions and our nation’s fastest-growing communities, potentially generating trillions of dollars in investment.

Such standards are clearly needed. Research conducted by the Greenlining Institute and the NAACP found that in 2012, some of the top banks did less than 6% of their discretionary contracting with minority-owned businesses, while less than 20% of bank managers were people of color.

This problem can be fixed. For example, look at what happened when California began requiring regulated utilities and telecommunications providers to report their level of contracting with diverse-owned businesses. The simple act of creating transparency caused a boom in contracting with businesses owned by women, racial and ethnic minorities, and service-disabled veterans. So for the past five years, stakeholders have been advocating for the OMWIs and their agency leaders to seize this opportunity and issue strong workforce and supplier diversity standards for the 70,000-plus companies they regulate.

Recently, the OMWIs in the Office of the Comptroller of the Currency, Federal Reserve Board of Governors, Federal Deposit Insurance Corp., Securities and Exchange Commission, National Credit Union Administration and Consumer Financial Protection Bureau released their final joint standards as required by section 342. But to our shock, the “standards” aren’t standards at all. Standards would have helped promote important policy objectives and helped financial companies understand an acceptable level of performance.

Unfortunately, regulators’ proposed standards achieve none of these objectives. They set no criteria or expectations for diversity and inclusion and provide no benchmarks against which to measure progress. Instead of standards, the document is a collection of nice suggestions coupled with a choose-your-own-adventure reporting system.

That’s no exaggeration. The “standards” encourage banks and other financial institutions to report diversity data, but leaves every important detail for the companies to decide: whether to report, what to report, how to present the data. It’s a bit like your college professor letting you decide whether or not to take a final exam, and then write it and grade it yourself. The lack of standards leaves the public and advocates with no way to compare companies, practically inviting them to provide spin instead of substance.

Financial companies need direction and clarity to get things done, as regulators know too well. Unfortunately, they seem to be ignoring the lessons of the past.

Oddly, the agencies seem to have some doubts about their authority to impose clear, measureable reporting requirements. This is doubly puzzling because the key congressional architects of Sec. 342 specifically addressed this point, stating: “We believe it is necessary to achieve both the spirit and plain letter of Section 342 that the final standards include: (1) mandatory diversity assessments and disclosures from all regulated entities; (2) information on both workforce and supplier diversity practices and policies of the regulated entities; and (3) that the diversity data be made available to the public.”

So why did the agencies ignore the clear intent of the law’s authors? We can only speculate. But it’s possible that regulators are worried holding the private sector accountable for its diversity would bring the agencies’ own performance into the spotlight. Surprisingly, a 2013 Government Accountability Office study found that that the diversity record of federal financial regulators is even worse than the private sector entities these offices oversee.

For example, in 2012, one federal agency did as little as 3.8% of its total contractor spending with minority-owned businesses, while another had just 9% people of color in management.

This should be unacceptable. The OMWIs and diversity overall are tremendously underutilized tools in helping to strengthen the economy. It’s been well documented that communities of color aren’t getting an equal shot at participating in and benefitting from this economy. Nearly any economist, including the conservative former Federal Reserve chair Alan Greenspan, will tell you that the more unequal an economy is, the more unstable and vulnerable it is. The banking sector, our communities and our economy overall will be improved by serious diversity efforts in the financial industry. Real standards with defined metrics can start the ball rolling.

Happily, this tale may not be finished yet. The OMWIs are giving the public one last opportunity to provide feedback on these standards. It’s important that stakeholders hold the agencies’ feet to the fire and stay engaged.

Sasha Werblin is economic equity program director at The Greenlining Institute.

Banks Should Diversify Their Supplier Networks

American Banker
by Orson Aguilar and Richard Chacon

Banks are a major engine of our economy. Besides providing lending and capital, banks purchase tens of billions of dollars each year in goods and services from a variety of suppliers. Diversifying those supplier networks can have a positive impact in the communities they serve and on the economy.

Recently, The Greenlining Institute released a new report,“Escaping the Old Boy Network: The Banking Industry and Supplier Diversity,” and convened bankers, small business representatives, federal regulators and other stakeholders to begin a dialogue on this issue. While others have looked at diversity in the industry, Greenlining’s study – based on data voluntarily supplied by participating banks – is the first of its kind to examine bank data on a detailed, granular level by categories like ethnicity, gender and geography.

Greenlining’s groundbreaking report was the result of strong partnerships with a shared goal of creating opportunities for minority business enterprises. Greenlining invited the top 12 banks in California by deposit market share to participate, and requested feedback on methodology to ensure the report asked the right questions. Eight banks participated and shared their data publicly for this first report – a nearly 70% participation rate. The results of this research were presented and discussed with a variety of stakeholders at a Feb. 24 event in San Francisco.

Once the numbers had been crunched, the results showed there is much work to do. Nationally, contracting with minority-owned firms saw a median spending of 5.96%, compared to California, where median spending was 7.72%.

The voluntarily participation of so many major banks was critical, and while the discussion was at times challenging for everyone involved, we all agree that it was the beginning of a useful and important process. And we came away from the dialogue having found considerable common ground.

We agreed that supplier diversity is a core business initiative. It’s not about quotas; it’s about identifying opportunities across the banks’ supply chains and creating internal systems, transparency and business opportunities. Major corporations are increasingly coming to understand that communities of color are an untapped resource. In states like California, people of color are already the majority, and the nation is primed to become “majority-minority” by 2043. How major businesses like banks do business with communities of color will affect the health of the entire economy as well as being key to their own future growth.

By buying more goods and services from businesses rooted in diverse communities, banks can build bridges with those communities and expand their customer base. And by expanding their networks of potential suppliers, the increased competition can help banks obtain better quality services at lower prices.

In so doing, banks can also bring jobs and investment to communities in need of both. Our nation still faces a disturbing racial wealth gap: According to the U.S. Census, for every dollar of wealth a white family owns, the median Asian family has about 81 cents. The median Latino family has 7 cents and the median black family has less than 6 cents. One way major corporations can help reduce that gap, ultimately benefitting our whole economy, is to do business with firms rooted in communities of color.

Supplier diversity is a component of the strategic sourcing process for the banking industry with tangible benefits for banks, customers and the community. To move forward, we agreed that better data and standardized metrics will help a great deal. Research for Greenlining’s report revealed huge differences in what data banks now collect. For example, only three of eight banks currently track supplier data by gender within each ethnic group, and only five of eight track state-level contracting in depth.

The federal Offices of Minority and Women Inclusion, created by the Dodd-Frank financial reform law, can play an important role in establishing uniform measurement standards that will help both the industry and advocates continue this effort. We look forward to seeing how the OMWIs will compile comments on the recent Proposed Interagency Standards and create reporting criteria for all regulated entities. In the interim, we will all work together to create proactive and strong supplier diversity programs that truly impact both the bottom line of banks, diverse businesses, jobs and the economy.

Perhaps most importantly, we’ve agreed that this first report and discussion were just the beginning. We are committed to having continuing conversations to determine the next steps we all can take, including how to engage other teams within the banks and continue the important progress we’ve begun.

Orson Aguilar is executive director of The Greenlining Institute. Richard Chacon is senior vice president and director, Supplier Diversity and Development, for Union Bank N.A.

Barrett will destroy the Affordable Care Act

By Kelsey Lyles
The Progressive

If Republican senators steamroll Amy Coney Barrett onto the Supreme Court, she could become the crucial fifth vote to overturn the Affordable Care Act, sometimes called Obamacare. That represents a serious threat to families of color.

This isn’t a theoretical discussion. The Supreme Court is slated to hear oral arguments on the Trump administration’s latest attempt to overturn the ACA on Nov. 10, exactly one week after the presidential election. Barrett could be a justice by then.

The Trump team’s latest effort to kill the health care law turns on its penalty for not having insurance, which the 2017 GOP tax bill cut to zero. We don’t know exactly how Barrett would rule, but she strongly criticized Chief Justice John Roberts’ ruling in a prior case upholding the ACA, which involved the same provision.

Barrett has also criticized the ACA’s requirement of coverage for contraception, calling it an “assault on religious liberty and the rights of conscience.”

Ruling against the ACA would end the health care of millions of Americans. And that burden would fall disproportionately on Americans of color, who had the highest uninsured rates prior to the law’s passage and made the biggest gains under its provisions.

The ACA, while not perfect, has reduced barriers to eligibility and enrollment for low- and moderate-income families. It prohibits insurance providers from charging a patient more due to their risk profile, bans providers from refusing to serve patients with preexisting conditions, and allows young adults to remain on their family’s insurance until age 26.

All of these provisions, the Trump administration argues, should be eliminated if the Supreme Court rules in its favor. Solicitor General Noel Francisco, in a brief filed with the court, said the ACA’s other provisions cannot be separated from the individual mandate and that “it necessarily follows that the rest of the ACA must also fall.”

In 2010, according to a report published earlier this year by the Kaiser Family Foundation, 13.1% of white Americans lacked health insurance, the lowest rate of any racial or ethnic group. Asian Americans were next lowest at 16.7%. The uninsured rate for Black Americans hovered just under 20%, while nearly one-third of Latinx and Indigenous people lacked insurance.

Those numbers dropped dramatically for all groups after the ACA took effect, and the racial gaps narrowed substantially. By 2016, the uninsured rate for Latinx had plunged more than 13 percentage points, while the rate for Black and Asian Americans dropped by nearly half.

Distressingly, those gains pretty much stopped after the Trump administration began chipping away at the ACA — for example, by cutting funding and outreach for enrollment. Tossing out the ACA completely would obliterate coverage for millions of Americans, in the middle of a pandemic.

COVID-19 has already left some eight million Americans with a preexisting condition – making it nearly impossible for them to get affordable health insurance without the ACA’s protections. During her confirmation hearing, Barrett tried to talk her way around the preexisting conditions issue in a way that did not inspire trust.

Barrett disingenuously claimed that the issue before the court was “not a challenge to pre-existing conditions coverage or to the lifetime maximum relief remote cap.” In fact, as Francisco made clear, it is exactly that.

But those COVID-19 infections are disproportionately hitting communities of color. In August, the CDC reported that the COVID-19 case rate for Black Americans was 2.6 times higher than for whites, while for Latinx and Indigenous Americans it was 2.8 times higher. That’s millions of people who are potentially about to have their health care safety net taken away.

For Americans of color, Amy Coney Barrett is not just another judicial nominee, but  a direct and potentially lethal threat. Let your senators know what you think by calling the U.S. Capitol Switchboard at (202) 224-3121.

This column was produced for the Progressive Media Project, which is run by The Progressive magazine, and distributed by Tribune News Service.

Battle Brewing in California Over Climate Change Funds

Huffington Post
by: Preeti Vissa

California has led the nation in attacking climate change, setting up a cap-and-trade program to charge polluters for greenhouse gas emissions, with the money going to reduce pollution and boost the clean energy economy. Now it could lead the nation in hijacking the funds for other purposes, leaving the state’s citizens disappointed and angry.

This is serious, and not just for Californians. My state could be about to set a really unfortunate precedent.

California, like many states, has been digging itself out of a deep financial hole. The good news is that we are digging our way out, in part because voters approved some modest tax increases last year and in part because the economy is picking up, generating more revenue from income and sales taxes.

That’s why community groups were floored earlier this month when Gov. Jerry Brown proposed borrowing $500 million from the fund generated by carbon auctions — more money than the auctions have yet raised — for the state general fund. Green groups, environmental justice activists and advocates for low-income communities were shocked, and rightly so.

The state law that laid the groundwork for the program, AB 32, specified that money raised from fees on polluters must be used to carry out the purposes of the law — i.e. cutting climate-changing greenhouse gas emissions, reducing pollution and promoting clean energy. Last year, legislation that my organization sponsored put more teeth into that provision by designating a percentage of these funds to go to projects in economically disadvantaged and highly polluted communities.

Everything was moving along just fine. The California Environmental Protection Agency developed an excellent screening tool to pinpoint the communities most in need. Advocates and community leaders have identified shovel-ready projects that can be funded immediately. These projects — including solar programs for low-income Californians, increased access to transit, affordable transit-oriented development, and community greening — will save energy, reduce pollution and create desperately-needed jobs and opportunities for small businesses.

Let’s be blunt: Low-income communities — typically neighborhoods whose residents are mostly people of color — were used for far too long as environmental dumping grounds. Dirty, polluting facilities were placed in these neighborhoods because the people living there had no political power. It’s not a coincidence that these neighborhoods have suffered most from the struggling economy, often with horrifyingly high rates of unemployment and home foreclosures.

But in his revised budget released earlier this month, Gov. Brown proposed borrowing essentially all the funds the cap-and-trade program is likely to generate this year — with a vague promise of repayment with interest but with no guaranteed date for that repayment. He did this based on hyper-conservative revenue projections: California’s nonpartisan Legislative Analyst projects over $3 billion more in revenue than the governor’s office.

This is a terrible idea on several levels. Fiscally, it’s not necessary. It will harm our state’s most vulnerable communities, communities that have been hurt first and worst by both pollution and the Great Recession. It welches on promises made to those communities, who stood up for AB 32 when it was under attack by an oil company-sponsored ballot proposition in 2010. And it tells other states contemplating climate change programs that any money they generate can be used as a slush fund.

It’s also terrible politics, for both major parties. California Democrats have swept into historic domination of state politics via the votes of the African-American, Latino, Asian and low-income voters who will be most hurt by the governor’s proposal. Brown, let us remember, lost the white vote. Voters of color were his victory margin. All of it.

And Republicans, if they want to get back into the game, simply cannot ignore these voters. Voters of color care about the environment and want jobs and opportunities in their communities. This is a chance for the state GOP to do the right thing, both morally and politically.

How this ultimately plays out will be decided by the California legislature as it finalizes the state budget over the next several weeks. The well-being of millions of Californians and two political parties hangs in the balance.

Ben Benavidez and Orson Aguilar: CPUC Should Reject Comcast/Time Warner Merger

The Fresno Bee
by Ben Benavidez and Orson Aguilar

The California Public Utilities Commission must act to stop the digital divide from getting worse by saying “no” to the proposed merger between Comcast and Time Warner Cable. Any other move would only reduce competition, worsen service in the San Joaquin Valley and harm low-income consumers everywhere.

That’s unfortunate because, as Hugo Morales noted in his Bee commentary Feb. 24, conditions that the CPUC is considering attaching to any OK could do considerable good. Unfortunately, those conditions won’t solve the much larger problems the merger will cause, and Comcast’s track record makes it clear it will likely ignore most of them anyway. And neither the CPUC nor the public will be in a position to do much about it.

The commission’s proposed decision rightly notes that the merger would give the merged company unprecedented market power. As a result, it would subject customers to “poorer customer service, fewer service offerings, and fewer program choices” while causing Time Warner Cable customers to lose access to Time Warner Cable content and forcing them to live with Comcast’s famously terrible customer service.

Rather than bridging the digital divide, the merger would worsen it, creating permanent second-class service for low-income customers. Internet Essentials, Comcast’s nearly invisible program for low-income broadband customers, would be allowed to run at speeds far below the federal minimum standard for broadband service. Care for a ride on the back of the digital bus, anyone?

And while the proposed conditions seek to promote increased broadband service in underserved areas, the way they are worded provides no guarantee that any build-out of broadband infrastructure would actually reach working-class communities, farmworker communities and other low-income neighborhoods. Comcast could meet the conditions by adding broadband facilities in the Los Gatos hills or wealthy resort communities.

It gets worse. The first condition requires Comcast to offer LifeLine (discounted phone service for low-income customers) to all eligible customers in the new company’s service territory. Unfortunately, the CPUC can’t actually make Comcast offer LifeLine at all. Federal law allows companies to opt out of LifeLine in most circumstances, and consumer advocates like Consumers Union and The Greenlining Institute have pointed out that Comcast could do so immediately.

Overall, the conditions set excellent goals but give Comcast so much wiggle room that they would do very little to bridge the digital divide or otherwise to protect consumers from the power of the new communications behemoth the merger would create.

Bear in mind that Comcast has done huge mergers before, and we’ve seen how the company behaves. It simply ignores conditions it doesn’t like.

For example, when Comcast joined with NBC Universal, the Federal Communications Commission allowed the deal despite objections from consumer groups, but attached multiple conditions — that Comcast ignored.

The FCC required Comcast to “visibly offer and actively market” stand-alone broadband service (i.e. broadband not bundled with telephone or cable TV) for $50 a month for at least three years. The company largely ignored this pledge, failing to mention the service in customer mailings or offer it at retail locations.

It was listed on the company website, but buried in an obscure spot where customers had to hunt for it. Comcast eventually agreed to pay an $800,000 fine for these violations — pocket change for a company this large. And this isn’t an isolated incident; Comcast’s history of noncompliance is long indeed.

Even if the proposed conditions were adequate, there is no reason to believe Comcast will obey them, and little prospect that the CPUC will have the resources to investigate and punish violations. To protect consumers — and have any real chance of making broadband available and affordable to communities that need it — the CPUC should reject this merger entirely.