This Week in ESG and Impact Investing

Advisor Perspectives Magazine interviewed John Bogle about prospects for 2009. Bogle, 79, "is the Founder of The Vanguard Group, Inc., and President of Vanguard’s Bogle Financial Markets Research Center. He created Vanguard in 1974 and served as Chairman and CEO until 1996 and Senior Chairman until 2000." A sample: "Q - What worries you the most about the economy and the markets? A- My number one concern is the freezing of the credit markets, but I am equally concerned with the slapdash way the Treasury is trying to fix the problem. The troubled asset relief program (TARP) should have been called the toxic asset relief program, but they have yet to buy a single asset. They are injecting capital into banks, but are doing so at a very high price. Q - Your book discusses the characteristics of good leadership: nurturing the 'soul' of the organization, focusing on values, and 'pressing on, regardless.' Which leadership skills will be most important for Pres

We note that, according to a recent article in Black Enterprise Magazine , "Through Urban Trust Bank (a black-owned bank), (Robert) Johnson created a new entity, Homeowners First Bank. Homeowners First is an advanced lending facility or a bank designed specifically to provide temporary, advance funding to mortgage servicers. Mortgage servicers are the middlemen, who may or may not be the same company as the lender, but who retrieve money from borrowers on behalf of lenders." We feel this effort may be an attempt to profit, as the Washington Post noted , from the "unprecedented wave of foreclosures, charging distressed homeowners for help negotiating better loan terms -- a service provided for free or for a nominal fee by many nonprofits." We should remember that Mr. Johnson has a history of not living up to promises made to the black community. Since it is irrelevant to the current discussion, we will ignore historical charges against the man , and focus on the bank

We'll give you the good news first. According to unnamed sources, the FDIC will soon lift a Cease and Desist Order imposed on United Bank of Philadelphia on January 23, 2008. On the bad news front, the FDIC "accused the management of OneUnited Bank, one of the largest black-owned banks in the country, of running an unsound lending operation and ordered a top-to-bottom review of executive perks that included a 2008 Porsche and a housing allowance for a beach-front home in California." Wow. Ouch.

"Tell Me More, December 16, 2008 · Although the federal government is pouring billions of dollars into the nation's banks, minority-owned financial institutions serving African-American and Latino communities face their own unique challenges, such as higher unemployment rates and less access to credit. Bill Cunningham, of Creative Investment Research and Luis Pastor, of the Latino Community Credit Union, discuss helping their clients through economic crisis. See: http://www.npr.org/templates/story/story.php?storyId=98325149 Audio for this story will be available at approx. 12:00 p.m. ET today."

"SAN FRANCISCO (MarketWatch) -- The Federal Deposit Insurance Corporation said late Friday that Haven Trust Bank of Duluth, Ga., was closed by the Georgia Department of Banking and Finance. The failure not only marks the 24th bank failure of the year, but the fifth in the Atlanta area. The FDIC was named receiver, and Branch Banking & Trust of Winston-Salem, N.C. will assume the deposits. As of Dec. 8, Haven Trust had total assets of $572 million and total deposits of $515 million. The FDIC said that BB&T agreed to assume all of the deposits for $112,000 and assume all of the failed bank's assets for about $55 million."

We have updated our listing of minority banks receiving TARP funding: 11/14/2008 UCBH Holdings, Inc. (Asian) San Francisco CA Purchase Preferred Stock w/Warrants $298,737,000 Par 11/14/2008 Broadway Financial Corporation (Black) Los Angeles CA Purchase Preferred Stock w/Warrants $9,000,000 Par 12/5/2008 East West Bancorp (Asian) Pasadena CA Purchase Preferred Stock w/Warrants $306,546,000 Par 12/5/2008 Cathay General Bancorp (Asian) Los Angeles CA Purchase Preferred Stock w/Warrants $258,000,000 Par 12/5/2008 Popular, Inc. (Hispanic) San Juan PR Purchase Preferred Stock w/Warrants $935,000,000 Par Total to minority banks: $ 1,807,283,000 Total to all banks: $165,306,798,000 Percentage: 1%

In an article on the Black Enterprise Magazine blog about the nomination of New Mexico Gov. Bill Richardson as Obama Administration Commerce Secretary, Creative Investment Research, Inc. Advisory Board Member C. Howie Hodges, "who was an assistant director for the department’s Minority Business Development Agency during Clinton’s first administration" noted that, "Richardson had a very good strategic team and I have no doubt that he will put in place a very capable combination of savvy business people who will also have the political skills to help execute Obama’s mandate to create economic and job growth,' says Hodges, who is currently a senior vice president of One Economy Corp., a global nonprofit that delivers access to technology and content to low- and moderate-income households. In addition, says Hodges, during the Clinton administration, the agency actively aimed to expand opportunities for minority and women-owned businesses in the private and international

The SEC today "approved a series of measures to increase transparency and accountability at credit rating agencies, and ensure that firms provide more meaningful ratings and greater disclosure to investors. The new measures impose additional requirements on credit rating agencies, whose ratings of residential mortgage-backed securities backed by subprime mortgage loans and of collateralized debt obligations linked to subprime loans contributed to the recent turmoil in the credit markets. The SEC also proposed additional measures related to transparency and competition concerning credit rating agencies." We think these reforms are important first steps, and are mindful of the fact that politics and regulation are the "art of the possible." As we said in 2005, fradulent practices by credit rating agencies "threaten the integrity of securities markets. Individuals and market institutions with the power to safeguard the system, including investment analysts and NRS

The Bush administration last week announced its plan to abandon the original $700 billion economic rescue plan (Troubled Asset Relief Program (TARP)) and launched a new initiative to inject $250 billion directly into financial institutions. This is to be accomplished by buying bank stock. The thinking is that this will help thaw frozen credit markets and get skittish banks lending again. On Tuesday November 18th, Members of Congress held a hearing titled “Oversight of Implementation of the Emergency Economic Stabilization Act of 2008 and of Government Lending and Insurance Facilities” in 2128 Rayburn House Office Building. Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and FDIC Chairman Sheila Bair testified before the House Financial Services Committee. Our overall opinion: the hearing led to plenty of blame being passed around concerning this unanticipated policy shift. In his statement, Treasury Secretary Paulson defended his decision to change the focus of

"Company: Broadway Financial Corp. (BYFC) (Black owned) Participation: Broadway received a $9 million investment and issued warrants to buy 183,175 common shares at $7.37 each. Date of disclosure: Nov. 14. Notes: Broadway's risk-based capital ratio was 11% and its tangible capital ratio was 7.65% at Sept. 30." "Company: East West Bancorp Inc. (EWBC) (Asian owned) Participation: East West received preliminary approval for $316 million of additional capital Date of disclosure: Nov. 14. Notes: East West's total risk-based capital would increase to 16.20% from 13.12%, and tangible equity to tangible assets ratio would increase to 10.73% from 7.95% as of Sept. 30." (See: http://www.creativeinvest.com/research/AsianBanks.html ) "Company: UCBH Holdings Inc. (UCBH) (Asian owned) Participation: UCBH issued $298.7 million in preferred shares and warrants to buy up to 7.84 million common shares at an exercise price of $5.71 a share. Date of disclosure: Nov. 14.

The Oversight and Government Reform Committee of the US House of Representatives held a hearing titled, “Hedge Funds and the Financial Market” on Thursday, November 13, 2008. The hearing examined systemic risks to financial markets posed by hedge funds and considered regulatory and tax reform proposals. Among the topics, the panels discussed three major issues: 1. What role have hedge funds played in our current financial crisis? 2. Do hedge funds pose a systemic risk to the financial system? 3. What level of government oversight and regulation is appropriate? Over the last decade, hedge fund holdings reportedly increased five-fold, to more than $2 trillion. The role of the hedge fund industry in the current financial system is becoming more important given this dramatic growth trend. However, hedge funds are virtually unregulated, and not required to report any information on their holdings, their leverage, or their strategies to any government agency. The opacity and non-transparenc

Someone recently asked about our track record with respect to the market crisis. Here, from 2003 and 2006, are a few of our comments: SEC Comments. Page 6: "Envy, hatred, and greed have flourished in certain capital market institutions, propelling ethical standards of behavior downward. Without meaningful reform, there is a small (but significant and growing) risk that our economic system will simply cease functioning." http://www.sec.gov/rules/proposed/s71903/wmccir122203.pdf December 22, 2003. and: SEC Comments. Page 2: "Together these practices threaten the integrity of securities markets. Individuals and market institutions with the power to safeguard the system, including investment analysts and rating agencies, have been compromised. Few efficient, effective and just safeguards are in place. Statistical models created by the firm show the probability of system-wide market failure has increased over the past eight years. Investors and the public are at risk."

The Waxman Committee held a hearing titled, “The Financial Crisis and the Role of Federal Regulators” at 10:00 a.m. on Thursday, October 23, 2008, in 2154 Rayburn House Office Building. The hearing examined the roles and responsibilities of federal regulators in the current financial crisis. This is the fourth hearing into the ongoing financial crisis. Testifying were Alan Greenspan, former Fed Chair, John Snow, the former secretary of the Treasury, and Christopher Cox, the current chair of SEC. This hearing was the first concerning with the role of the public sector. Based upon what legislators learned from previous hearings, the hearing reflected growing suspicion of the government’s role in the crisis. Specifically, if the government had intervened earlier, the crisis would likely be prevented. This led to today's review of actions and inaction before the crisis. Committee Chairman Henry Waxman admitted that there has been a de-regulatory atmosphere throughout the financial syst

Members of Congress held the third in a series of hearings on the financial crisis titled “Credit Rating Agencies and the Financial Crisis.” The hearing, held on Wednesday in 2154 Rayburn House Office Building, examined the roles and responsibilities of credit rating agencies in the current financial turmoil. Top credit rating agency executives also testified before the House Committee on Oversight and Government Reform. In his opening statement, Committee Chairman Henry Waxman briefly outlined the sequence of events which lead to today’s crises. “The story of the credit rating agencies is a story of colossal failure,” Mr. Waxman said. He pointed out that leading credit rating agencies are essential financial gatekeepers. However, the agencies assigned triple-A ratings to securities and CDOs backed by risky subprime mortgage loans. As a result, the entire financial system is now at risk. The three largest credit rating agencies - Standard & Poor’s, Moody’s, and Fitch Ratings contro

The 10th Annual Endowment and Foundation Forum will cover the issues that are most relevant to endowments and charitable foundations today and will provide participants with opportunities to network with investors and fund managers in a relaxed setting. The forum will cover the need for non-profit governance for endowments, means of capturing alpha, methods for choosing money managers and the pros/cons of investing in a variety of products. This event will coincide with the world's largest two-day rowing event, the Head of the Charles Regatta, held on the Charles River adjacent to the Hyatt Regency. Join us and over 300,000 spectators to watch 7,500 competitors from around the globe compete in this prestigious event. Topics Covered Will Include: • Trends in Asset Allocation for Endowments and Foundations • Managed Accounts: A Safer Route to Hedge Fund Returns • Challenges facing Endowments and Foundations, past, present and future • Socially Responsible Investing • Incorporating Al

Modernizing the Securities and Exchange Commission’s Disclosure System Yesterday, the SEC hosted a roundtable meeting to discuss the 21st Century Disclosure Initiative. The Initiative seeks to examine the basic purposes of disclosure, from the perspectives of investors and markets. The SEC hopes to create a comprehensive plan for overhauling the current disclosure system, EDGAR. In the first panel, panelists talked about the kinds of information and data format that the market and investors really need, given this dynamic market environment. Most panelists argued that investors need summarized information rather than whole financial statements. A summary of panelist comments would be: "Most individual investors access company information using third party services, like Yahoo Finance, Bloomberg, etc… The issue is that people don’t really have time and ability to figure out where is the number they want by looking at the hundreds pages financial statements in the EDGAR system. Howe

We wrote on September 22, 2008 that we were stunned to learn that banking and financial market regulators were considering using taxpayer funds to finance the creation of a separate entity to hold "toxic" financial instruments. We thought this would be a dangerous suggestion that will not solve the problem. We wrote on April 3rd : With the development of toxic (derivative and subprime lending) financial products, the relationship between investment banks and the economy has turned parasitic. We wrote: "To protect the public and the markets, these newer derivative contracts should be extinguished. To put the fire out, put the fire out." Apparently, we’re not the only ones who saw this coming, raised the alarm, and were ignored. In his Commentary in the New York Times on Sunday, September 28 Ben Stein notes similar concerns and the need to “annul” financial gambling run rampant by the financiers who peddle derivatives, including the impossible to value “credit-def

Below, we feel, are the best minority owned banks in the US (as of 6/30/08): LIBERTY BANK & TRUST CO, New Orleans, LA (Black) INDUSTRIAL BANK, Washington, DC (Black) MECHANICS & FARMERS BANK, Durham, NC (Black) CITIZENS SECURITY BK GQ INC, Guam, GU (Asian) CENTRAL BANK OF KANSAS CITY, Kansas City, MO (Women) BROADWAY FEDERAL BANK F S B, Los Angeles, CA, (Black) BANCO SANTANDER PUERTO RICO, San Juan, PR (Hispanic) UNITED BANK OF PHILADELPHIA, Philadelphia, PA, (Black) CARVER STATE BANK, Savannah, GA, (Black) NORTH MILWAUKEE STATE BANK, Milwaukee, WI (Black) Yes, we know there are a lot of Black-owned banks on the list. Here's why: Black banks have always had relatively higher levels of nonperforming loans, so they know better (than, say WAMU) how to survive with these types of loans on the books. We think this skill will serve them well in the current credit cycle. Thus, they are rated a little higher than other minority banks. We think smaller banks will do well over this

Emergency Economic Stabilization Act of 2008 Purpose: To provide authority for the Federal Government to purchase and insure certain types of troubled assets for the purposes of providing stability to and preventing disruption in the economy and financial system and protecting taxpayers, and for other purposes. Title I－Troubled Assets Relief Program Sec.101 Purchases of troubled assets: Secretary (of the Treasury) shall publish program guidelines, including the following: (1) Mechanisms for purchasing troubled assets (2) Methods for pricing and valuing troubled assets (3) Procedures for selecting asset managers (4) Criteria for identifying troubled assets for purchase Sec.102 Insurance of troubled assets. Sec 103 Consideration (of social issues): (1) Protect the interest of taxpayers (2) Protect American jobs, savings, and retirement securities (3) Keep their homes and to stabilize communities (4) Providing financial assistance to financial institutions, including those serving low and

President George W. Bush last week laid out a $700 billion Wall Street rescue plan ostensibly aiming at preserving the nation’s overall economy. Dubbed "Cash for Trash,” the plan has sparked a sharp debate. The House Financial Services Committee held a public hearing titled, “The Future of Financial Services: Exploring Solutions for the Market Crisis” on Wednesday, September 24th at Rayburn House Office Building. This was a legislative hearing to examine the Bush Administration’s financial services proposal. Secretary of the Treasury Henry Paulson and Federal Reserve Chairman Ben Bernanke explained the proposal at the hearing. The hearing started at noon and included two parts. At the beginning, members of the Committee were given an opportunity to note their concerns and to comment on the bailout plan. Most did not endorse the plan: they thought it would be a mistake to rush such a huge expenditure, one that would boost the national debt to over 70% of GDP. Committee members addr

We are stunned to learn that banking and financial market regulators are considering using taxpayer funds to finance the creation of a separate entity to hold "toxic" financial instruments. This is a dangerous suggestion that will not solve the problem. At best, this is akin to moving a fire from, say, your living room to your dining room. At either location, the fire will continue to grow. The proposed separate entity simply provides more oxygen to the fire, wherever it is. We will be spending all of our reserves: 1. to purchase a set of financial instruments with limited information on what, exactly, we are buying, 2. to purchase a set of financial instruments with limited value, 3. to purchase a set of financial instruments with unlimited risk, 4. to purchase a set of financial instruments with virtually no information on how long we will have to hold them to "turn a profit." (Note that these contracts will never turn a profit. They are not designed to...) and,

Christopher Cox is still, without a doubt, the best financial regulator appointed thus far by the Bush Administration. We base this on performance. Mr. Cox knew the situation. He came in at a time of unprecedented corporate and market institution fraud and malfeasance . Things got worse, of course, but it was bad when he walked in the door. As soon as he took over, he increased staff and started investigating Wall Street broker/dealers, something many did not believe he would do, given his close ties to the Street. His Office of Interactive Disclosure is a masterpiece, and shows he understands the role technology will play in preventing future crises. The Office created an online tool that enables investors to easily and instantly compare what 500 of the largest American companies are paying their top executives , an Internet Web page that enables investors to more easily read, analyze, and compare the information provided by mutual funds related to fund cost, risk, and past performan

Forget everything else you have heard about the financial crisis. Focus on this. According to USA Today, "The share price of the Reserve Primary fund, a money market mutual fund, has fallen below the sacred $1 mark, thanks to the Lehman Bros. meltdown. Money market funds have been the fund industry's haven for more than three decades, and investors often view them the same way they do bank checking accounts. The funds' safety record has attracted more than $3.5 trillion in assets. Until now, no money fund open to the general public has ever allowed its share price to dip below a dollar — "breaking the buck," as it's called. (A small institutional money fund, Community Bankers Money fund, broke the buck in 1994.) Money market funds have long feared that if they broke the buck, thereby shrinking investors' principal, people would shift their money into bank money market accounts or ultrasafe Treasury securities. The question now is whether other money funds

The 10th Annual Endowment & Foundation Forum will cover the issues that are most relevant to endowments and charitable foundations today and will provide participants with opportunities to network with investors and fund managers in a relaxed setting. Topics Covered Will Include: • Trends in Asset Allocation for Endowments and Foundations • Portfolio Construction and Implementation, Developments and Advances • Challenges facing Endowments and Foundations, past, present and future • Socially Responsible Investing • Incorporating Alternatives and Emerging Asset Classes into a Smaller Plan • Manager Selection Sponsorship and Exhibiting Opportunities are Available! Please contact jlane@opalgroup.net or call 212-532-9898, ext. 275. Register! Register by visiting us online here! Registrations for representatives of endowments and foundations are complimentary.

Of course, the US Treasury forced Freddie and Fannie into "Conservatorship." According to FHFA Director James B. Lockhart and the Treasury, "Conservatorship is a statutory process designed to stabilize a troubled institution with the objective of returning the entities to normal business operations. FHFA will act as the conservator to operate (Fannie and Freddie) until they are stabilized. There are several key components of this conservatorship: First, Monday morning the businesses will open as normal, only with stronger backing for the holders of MBS, senior debt and subordinated debt. Second, the Enterprises will be allowed to grow their guarantee MBS books without limits and continue to purchase replacement securities for their portfolios, about $20 billion per month without capital constraints. Third, as the conservator, FHFA will assume the power of the Board and management. Fourth, the present CEOs will be leaving, but we have asked them to stay on to help with th

According to Washington Post, "The chief executive of District-based Adams National Bank (Woman owned) resigned on the eve of a meeting scheduled for today with federal banking regulators to review the company's financial condition. Jeanne Delaney Hubbard also stepped down as chairwoman and chief executive of the bank's parent company, Abigail Adams National Bancorp. Adams National faces mounting losses on real estate loans and this summer disclosed that it had been classified as "troubled" by its regulator, the Office of the Comptroller of the Currency, subjecting the bank to greater scrutiny. Last week, the Abigail Adams board voted to suspend quarterly dividend payments to shareholders."

According to the SEC: "Washington, D.C., Sept. 3, 2008 — The Securities and Exchange Commission today charged two Wall Street brokers with defrauding their customers when making more than $1 billion in unauthorized purchases of subprime-related auction rate securities. The SEC's Division of Enforcement in 2007 formed a subprime working group, which is aggressively investigating possible fraud, market manipulation, and breaches of fiduciary duty that may have contributed to the recent turmoil in the credit markets. The SEC's complaint, filed in federal court in Manhattan, alleges that Tzolov and Butler, while employed at Credit Suisse Securities (USA) LLC in New York, deceived foreign corporate customers in short-term cash management accounts by sending or directing their sales assistants to send e-mail confirmations in which the terms 'St. Loan' or 'Education' were added to the names of non-student loan securities purchased for the customers. Tzolov and But

According to the SEC: "Washington, D.C., Sept. 3, 2008 — The Securities and Exchange Commission today charged former Kellogg, Brown & Root, Inc. (KBR) executive Albert Jackson Stanley with violating the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and related provisions of the federal securities laws. The Commission alleges that over a 10-year period, Stanley and others participated in a scheme to bribe Nigerian government officials in order to obtain construction contracts worth more than $6 billion. The contracts were awarded to a four-company joint venture of which The M.W. Kellogg Company, and later KBR, was a member."

According to the Comptroller of the Currency, "WASHINGTON — The Office of the Comptroller of the Currency (OCC) issued a banking bulletin on an interim final rule to implement the changes to national banks’ public welfare investment authority enacted in the Housing and Economic Recovery Act of 2008 (HERA), which the President signed into law on July 30, 2008." Public welfare investments are investments that promote the public welfare. (Sorry to be circular, but it is what it is.) These are investments that primarily benefit low and moderate income individuals, low and moderate income areas, or other areas targeted for redevelopment. They include debt or equity investments that finance small businesses, provide credit counseling, job training, community development research. We believe the law and resulting regulation timely. The OCC goes on to state that "This provision in HERA restored national banks’ full authority to make investments designed primarily to promote the

BEIJING/HONG KONG (Reuters) - "China Construction Bank , the country's second-largest lender by assets, said on Monday it expects local currency lending to grow 10 percent this year, implying stepped up activity in the second half, but warned of slowing profit growth. Construction Bank, which on Friday posted a 71 percent jump in first-half net income to 58.7 billion yuan ($8.6 billion), said growth in lending would be driven in part by loans to small and medium-sized enterprises and agricultural businesses." We have created a set of reports covering the financial and social performance of the top five Chinese banks.

According to the Wall Street Journal, “Andrew Bischel believes green-minded, socially conscious investors don't have to sacrifice returns to have a portfolio they feel good about.” “‘There's a belief that the effect of shrinking the universe through constraints either causes you to lose return opportunities or it increases volatility because you don't have diversification,’ Mr. Bischel says. ‘We believe we know how to manage within a constrained universe. It is true that good companies can be good stock -- they perform well over the long term because they are less likely to have disasters down the road.’” “Socially responsible funds came into vogue and prospered through the 1990s, but not necessarily because they were well-managed, Mr. Bischel says. For the most part, such funds were heavily weighted in the then-booming technology and telecommunications sectors because those companies had a sterling reputation among the social-responsibility crowd. When the bubble burst on

According to Fair Investment Company, “Nearly all respondents [of a survey of 2,000 UK adults] – 91 per cent – agreed that charities should be ethically and socially responsible when it comes to investment, a sign of the growing interest amongst the British public in where their money is going and how it is used by charities.” “Just 55 per cent of large UK charities had an ethical investment policy in 2006, and charities risk their reputations and income if they do not make investments which are conducive with their objectives.” “Many charities are concerned that the credit crunch will have an adverse affect on their income, both from monetary gifts and in the form of donated goods to sell in their shops; thus it is more important than ever for charities to insure that they do not jeopardise income by going against the principal foundations of the organisation, the EIRS said.” http://www.fairinvestment.co.uk/deals/news/investment-news-Public-calls-for-ethical-investment-from-charities-

According to ECM Connection, “Twin Cities based Sunrise Community Banks announced it is expanding its EZ Deposit service to business and nonprofit customers nationwide. This service allows customers to save time and energy by making electronic deposits from the convenience of their offices.” “EZ Deposit stands for ‘energy efficient and zero waste,’ which complements Sunrise Community Banks' socially responsible business model.” “‘Collectively, we're recognized as ‘Minnesota's Socially Responsible Banks®,’ having demonstrated our ability to make a difference in our urban communities,’ said David Reiling, CEO, Sunrise Community Banks. ‘Our Socially Responsible Deposit Fund allows depositors to dedicate funds to be targeted toward affordable housing projects, small business and community investment programs in low and moderate income areas of the Twin Cities.’” http://www.ecmconnection.com/article.mvc/Kodak-Financial-Remote-Deposit-Capture-0001?VNETCOOKIE=NO Angela Wang

Here is what we think happened. Freddie and Fannie became arrogant, in that way that says: we know more that you do, we know more that you ever will, we are smarter, better paid and better looking than you. They were right, for a time. But time always runs out. They were "socially responsible" companies of long standing, the originals, immune to either criticism or improvement. Their attitude, financial and reputational strength gave them great power, power they misused. Deregulation supported them on the upside and failed them on the downside. They should have stopped abusive home mortgage market lending practices, as we suggested in 1995 and 2001 , but found themselves turning up the heat on a housing market mania that required fraudulent practices. Generating income and increasing "shareholder value," became the order of the day. Managers at Freddie and Fannie were caught up, too. They wanted their share of the American Pie, even if that meant turning the oven

Carver Bancorp, Inc. reported earning $700,000, or 27 cents per share, in the second quarter of 2008. The bank declared a cash dividend of 10 cents per share. This compares favorably to the mammoth writedowns, and the resulting hits to income, large banks are reporting this quarter. For example, according to Marketwatch.com, "Salt Lake City-based Zions' Bancorporation..closed down 14.3%, becoming the top loser among financials after a rapid tumble.. The fall in the bank's share price comes after Moody's Investors Service said it was reviewing the company for a downgrade. Wachovia reported a second-quarter loss of $9.11 billion, or $4.31 a share, last month. Wachovia ended 12% lower as traders beat down the stock on news that the bank is revising lower its second-quarter loss by $500 million pretax. This was to reflect a hit it is likely to take from settlement discussions with regulators of investigations relating to auction-rate securities." Thus, small, minorit

According to CityWire.co.uk, “While some advisers may still be warming up to the idea of ethical or socially responsible investment (SRI), research shows clients are increasingly demanding it. But despite what some may fear, investing in line with a client’s principles does not have to mean the death of decent returns, particularly if advisers choose funds with care.” “Research released by the Association of Independent Financial Advisers in May revealed that close to a quarter of advisers saw increased consumer interest in ethical investments last year. Meanwhile, figures from Ethical Investment Research Services (Eiris) show that as of December 2007, there were nearly 100 green and ethical retail funds available in the UK with investment at a record £8.9 billion.” “Eiris head of responsible investment development Stephen Hine said experience shows that over an extended period, ethical, SRI and sustainable funds can perform as well, if not slightly better, than their non-ethical, no

The recent passage of the housing bill brings relief to those suffering from foreclosure, but recent changes to the bill bring disappointment on the clean energy front. Title X of the bill, passed in the House then struck down in the Senate, was not included in the final version of the bill which recently emerged from conference. Title X included key tax incentives for energy efficiency, such as tax incentives for the production of clean energy from solar and geothermal processes, as well as tax incentives for incorporating efficient energy usage in housing. It extended tax credit for new energy efficient homes through 2010, and extended the tax credit for energy efficient appliances, such as dishwashers and refrigerators, through 2009. All is not quiet on the clean energy front, however. While the housing bill might serve as a setback, another bill titled the GREEN Act of 2008, sponsored by Colorado Representative Ed Perlmutter and 41 other co-sponsors, focuses on providing incen

VHCDC-MBE Capital Connect™ is looking for U.S. based Minority Business Enterprises/Entrepreneurs with innovative, marketable solutions within the Business Products and Services, Consumer Products and Services, E-Commerce, Energy, Entertainment/Media, Internet, Telecommunications, and Technology industries to enter the Top-MBE Business Plan Competition to win a spot to pitch their business opportunity to active angel investors, lenders, and venture capitalists. Pitching sessions will be conducted Friday, September 26th during the 2008 MBE Capital Call. Entries will be evaluated against the same criteria used by active investors to screen potential investment opportunities. Interested parties must register to be considered. Logon to: www.mbecapitalcall.com today to register. James R Taylor, Director VHCDC-MBE Capital Connect™ www.vhcdc.org 757.671.8333 VM jtaylor@vhcdc.org

According to SocialFunds.com, “For socially responsible and green investors, investing in water can support a double bottom line of earning returns while supporting the environment and communities. A number of indices, accompanying ETFs, and mutual funds follow global water companies.” “Christian W. Magoon, President and Senior Managing Director of Claymore Securities , told SocialFunds.com, ‘Water is the only commodity for which there is no replacement. Can we replace oil? Yes. Oil we can replace. Same with lumber or soybeans. There is only so much water on earth, but the demand for water itself is not affected by inflation or tax rates,’ Magoon said.” “Water companies span a wide range of sectors and industries including infrastructure, utility, clean water production, efficiency, filtration, purification, monitoring, waste water treatment and pollution control. Sectors that can have a significant impact on water include chemical, steel, manufacturing, and agriculture.” http://www.so

According to GuruFocus.com, “More environmentally-conscious Canadians are looking at socially-responsible mutual funds as a way to invest using a "green" approach.” “There are now almost 50 SRI mutual funds and ETFs available in Canada and the major players are starting to realize that there is something happening that merits their attention. Within the past year, three of the big bank fund groups have launched SRI entries. Last July, RBC created the RBC Jantzi Balanced Fund, RBC Jantzi Canadian Equity Fund, and RBC Jantzi Global Equity Fund. Two months later, we got the TD Global Sustainability Fund and in February of this year the Scotia Global Climate Change Fund appeared. If you sense a trend here, you're right.” http://www.gurufocus.com/news.php?id=33291 Angela Wang

According to the Associated Press, “Pax World Management Corp. has agreed to pay a $500,000 fine because it failed to follow its own socially responsible investing criteria over a five-year period, when two of its mutual funds invested in off-limits industries such as gambling and liquor, and oil and gas exploration.” “Portsmouth, N.H.-based Pax, a pioneer in the growing socially responsible investing niche, agreed to pay the penalty to resolve civil charges announced Wednesday by the Securities and Exchange Commission.” “Pax said the portfolio managers that had overseen the two funds at which the SEC found violations are no longer employed by Pax. The firm's head of social research at the time of the failures also has left, along with the chief compliance officer.” http://ap.google.com/article/ALeqM5jpAR6_I1tvMPstp_dU30tfdqP-AQD928BKJ03 Angela Wang

We anticipate that the Housing Bill will impact socially responsible investors via it's impact on low and moderate income communities. Mortgage borrowers will win; lenders will suffer some losses. Several sections in the law (for example, rules concerning disclosure) will now force lenders to fully explain to borrowers exactly how mortgage loan payments work. In addition, new borrower counseling programs are created to provide advice to borrowers. The bill’s first impact on social investors will come in the form of block grants given to the states. These block grants are meant to spur investments in troubled neighborhoods. Many times, foreclosed homes drive down property values in the neighborhood, leading to more foreclosures. The grants are targeted to areas with large amounts of foreclosed properties, and will help to prevent domino effect cited above. Low to moderate income communities, which have been hit hardest by the increase in foreclosures, should specifically bene

From Alumni Connections, No. 44 - March 2008. Alumni Connections is a sampling of alumni news gleaned from media online and in print, including news submitted to Chicago GSB Magazine. "William Michael Cunningham, Social Investing Advisor of Creative Investment Research, linked the failure of African-American-owned Douglass National Bank to the global mortgage crisis, according to a January 28 article in U.S. News & World Report. The bank, which originated in the 1940s, lost $1.3 million in 2007 and $4.3 million in 2006, the article said. Bad commercial real estate loans, not residential mortgage loans, led to recent losses, the article said. “It’s this secondary and tertiary impact of the crisis in the subprime market that’s beginning to impact smaller institutions mainly through [the slowdown in] consumer spending,” Cunningham told the magazine. He said he expects other small banks to fail, as a faltering economy inhibits borrowers’ ability to repay loans. Douglass is the fou

The Foreclosure Prevention Act of 2008 is currently being debated and molded by members of Congress. The bill is a response to the escalating housing crisis which has had damaging effects on the economy as a whole. It was introduced by members of the Senate in February in hopes that foreclosure rates could be brought down and the rippling effects of these foreclosures could be averted. The first step that this bill plans to enact is better access to Federal Housing Administration (FHA) loans for families in risk of foreclosure. This will provide safe, fixed-rate mortgages as well as counseling services to homeowners. Struggling homeowners would then be able to refinance into lower cost, government insured mortgages. The influx of funds to the counseling program could potentially help as many as 500,000 Americans receive advice on how to better manage their home. This government spending also acts as a stimulus to fiscal policy which may consequently help the economy.

In his semi annual Monetary Policy Report to the Senate Banking Committee, Federal Reserve Chairman Ben Bernanke spoke about the current troubles in the economy, the future outlook and the FED’s plans to help the economy return to health. With an average of 94,000 jobs lost per month over the last six months, unemployment at 5.5%, home prices falling, rising inflation, soaring commodity prices and trouble at Freddie Mac and Fannie Mae, Bernanke was less than optimistic about the economy over the next year, forecasting extremely slow growth. While he claimed that the U.S. is technically not in a recession by a textbook definition, he acknowledged the hardships many Americans are facing with extremely low consumer confidence, declining wealth, and rising food and energy costs. According to the Chairman, the housing crisis and rising commodities prices are at the center of the current economic problems. Bernanke told the committee that he believes the Treasury Department’s plan to bac