Tuesday, February 28, 2012

Black Bank Forecloses on Historic Black Church

According to the Boston Herald,

"Scandal-plagued Hub bank OneUnited has begun foreclosure proceedings against Roxbury’s historic Charles Street African Methodist Episcopal Church, one of Boston’s oldest and most-respected black churches, the Herald has learned.

OneUnited, the nation’s largest black-owned bank — which got millions in federal bailout money — is threatening to auction off the church March 22 to cover a $1.1 million 'balloon' mortgage that recently came due.

Founded in 1818, the Charles Street AME Church was a key player in the 19th century anti-slavery movement. Abolitionists including Frederick Douglass and William Lloyd Garrison led rallies at the congregation’s original Beacon Hill home, while the church helped runaway slaves reach Canada."

The church "has never missed a payment on its five-year-old mortgage."

OneUnited has had a series of problems recently. The bank has few urban loans, yet OneUnited sought aid as community 'beacon' and got $12 million from the US bank bailout fund. (See: http://twisri.blogspot.com/2009/04/black-owned-bank-has-few-urban-loans.html )

In 2008, the FDIC "accused the management of OneUnited..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." (See: http://twisri.blogspot.com/2008/12/one-up-one-down.html )

OneUnited has been the beneficiary of a number of minority bank deposit programs. These programs, used by institutional socially responsible investors like the Episcopal Church, AT&T, Fidelity, Coca Cola, nonprofits like the NAACP, and governments, like the US Department of Energy and the State of Massachusetts, place deposits in minority banks as a way of supporting community development.

Today's news story proves what we said several years ago: OneUnited no longer qualifies for these funds.

Wednesday, February 22, 2012

Obama To Close Minority Biz Dev Offices

According to Politic365, "Officials from the Commerce Department briefed members of Congress..to inform them that the Obama Administration plans to close all five regional Offices of the Minority Business Development Agency.

According to members at the briefing the reason given was cost savings. The Office of Minority Business Development has a total budget of $30 million dollars. The five regional offices are located in Atlanta, Chicago, Dallas, New York, Los Angeles and San Francisco.

The Office of Minority Business Development‘s mission is to promote competitiveness and provide access to capital and contracts to minority businesses. In 1969 Richard Nixon established the Office of Minority Business Enterprise by executive order. During the Carter Administration the name was changed to the Office of Minority Business Development.

Present at the meeting with Commerce officials were Congressional Hispanic Caucus Chair Charlie Gonzalez (D-TX), Congressional Asian Pacific American Caucus Chair Judy Chu (D-CA) and Reps. Grace Napolitano (D-CA), Judy Chu (D-CA), Mike Honda (D-CA), Yvette Clarke (D-NY), Bobby Scott (D-VA), G.K. Butterfield (D-NC) and Bobby Rush (D-IL) among others.

Several members were unhappy with the decision.

“It sends the wrong message to entrepreneurs and businesses in our community at this time when we need to have an expansion,” Rep. Bobby Rush (D-IL) said. Rush offered legislation to increase funding to the Minority Business Development Agency.

“This is message administrating, message management and message politics. It doesn’t have anything to do with the bottom line. The best message is one of expansion of the MBDA so it can do its work and meet its mission on the ground level and on the local level on the front line,” Rush added. Rush added that he has had a great working relationship with the regional office in Chicago.

Rep. G.K. Butterfield (D-NC) who is a member of the House Energy and Commerce Committee said, “I’m terribly upset about this. The explanation we received yesterday did not satisfy my objections.” Butterfield indicated strongly the offices are important to minority businesses.

“My regional office is in Atlanta. To just have a hub in Washington that services the whole country will not be an efficient use of that office,” the North Carolina congressman and longtime state judge added. Butterfield’s sentiments were repeated by other members.

Asked whether this was something that could effect minority business contracting Butterfield said, “Without question. It will lead to nothing but utter confusion. All in the name of 30 million to 29 million. So it’s not a substantial cut in the agency. Not enough to close five offices,” Butterfield added. Several members mentioned that the “cost savings” argument was unsatisfactory.

Congressional Black Caucus Chairman Emanuel Cleaver said he has a regional hub in Kansas City. Cleaver was not at the briefing and was generally unaware of the details of the decision. He was unenthusiastic about the office running out of Washington. “People in Washington have no idea what’s going on in Kansas City and St. Louis and DesMoines and Omaha,” he said.

House Small Business Committee member Rep. Yvette Clarke (D-NY) was also very concerned saying she feared the regional closings might be, “the beginning of the demise of the agency.”

When the views of his colleagues were relayed to him, CHC Chair Charlie Gonzales said he shared the concerns of his colleagues. He added, “Where do you see the model that is being proposed in other areas that provide services to minority communities? Just about every meaningful agency and department has regional presence — SBA has regional offices.”

Rep. Allen West (R-FL), who is a member of the House Small Business Committee was unaware of the decision to close the offices but echoed the sentiment of several Democrats. West said he was concerned because, “we have to do something about urban economic development.”

Rep. Jose Serrano, a senior member of House Appropriations was unaware of the regional office closings but said generally, “it would not be a good idea” if the offices were closed.

Several members who attended the meeting expressed concern about the regional offices closing and were unenthusiastic upon hearing the news. The members cited concerns that contracting for minority business is already challenging and may be made even more problematic by the closings.

Rep. Maxine Waters (D-CA) who added language to create an Office of Minority and Women Inclusion to the Dodd–Frank Wall Street Reform bill, commented on the closings.

Like many other members, Waters was unsure of what the effect of the closings would be. She said she would talk to business leaders in her district saying, “I’ll be calling my Chamber of Commerce people” and several others. Waters was not at the briefing but had heard of the closings before yesterday’s member briefing.

Rep. Nydia Velazquez (D-NY) who is the ranking Democrat on the House Small Business Committee said the move was an effort to consolidate offices and bring “things under one umbrella.” Though Velazquez was not in the briefing with Commerce officials she was aware that the five offices would be closed.

Several members pointed out that the the work of the regional offices might be best done on the local office level but still fear the office closings would effect minority businesses. They were also concerned about whether the current employees will be reassigned to local offices or cut completely. Rep. Butterfield said he’d been told the employees could possibly relocate to Washington.

Several members of Congress sent a letter dated February 10 to Commerce Secretary John Bryson expressing concerns on minority business efforts and the Minority Business Development Agency. The meeting yesterday was effectively the answer to that correspondence.

Neither Secretary Bryson or the National Director of the Minority Business Development Agency, David Hinson was at the member briefing. The press contact for the Offices of Minority Business Development was unavailable at the time of this filing."

Thursday, February 16, 2012

Report on Diversity at OMWI Agencies

Section 342 of the Dodd-Frank Wall Street Reform and Consumer Protection Act contains a provision creating an Office of Minority and Women Inclusion (OMWI) at various agencies to monitor the diversity efforts of the agencies, the regulated entities and agency contractors. In a new report on workforce diversity at the 20 federal financial regulatory agencies subject to Dodd/Frank Section 342 (OMWI), a West Coast based NGO, the Greenlining Coalition, notes that "there is considerable variation amongst the financial regulatory agencies in workforce diversity. Our tiered analysis illustrates that some agencies have strong diversity records, while others still have considerable room for improvement."

Greenlining appears to be working from our ratings of OMWI Offices, released in September, 2011. We agree with their assessment and are glad that they have validated the work we did six months ago.....

The Report goes on to note that

"..some agencies have been more successful than others at recruiting and retaining employees from certain racial and ethnic minority groups." Greenlining also identified two trends:

"Lack of racial diversity in executive management and a significant underrepresentation of Latinos, Native Hawaiians/Pacific Islanders, and Native Americans..in the executive management, mid-level management, and professional categories."

While we appreciate Greenlining's focus on workforce diversity at the covered agencies, we know that the biggest issue remains diversity at financial institutions covered by the OMWI Offices.

Wednesday, February 15, 2012

Institutional Investors Call on U.S. Securities and Exchange Commission to Implement Financial Market Reforms

According to a recent news release,

"A coalition of institutional investors from around the globe today released a list of financial market reform priorities that they believe are necessary to protect shareowner rights and bolster investor confidence.

The 14 pension funds and plan sponsors representing $1.6 trillion in assets called on the U.S. Securities and Exchange Commission to complete what they called 'unfinished business' in the wake of the financial crisis.

The list of financial market reform priorities – entitled An Investor’s Framework for the Future: Financial Market Reform Priorities for the SEC – outlines six initiatives that the SEC should complete, including:

Appoint the Investor Advisory Committee to provide the Commission with investors’ perspectives on regulatory issues; appoint the Investor Advocate to champion investor rights.

Renew rulemaking for universal proxy access so that investors can propose directors for boards on a level playing field with management.

Adopt final rules on the remaining executive compensation reforms under the Dodd-Frank Wall Street Reform and Consumer Protection Act;

Continue work on International Financial Reporting Standards to ensure high quality accounting in global markets.

Provide for an accountable and transparent ratings system with full disclosure on data and models used to develop securities ratings. Develop an independent mechanism to track the accuracy and effectiveness of the ratings process and complete the study of financing alternatives for credit rating agencies.

Clarify and ensure compliance with the Commission’s interpretive guidance on climate risk disclosures. Include climate change disclosure and the process for including diversity considerations into the corporate board nomination process in the newly created Investor Advisory Committee’s overall mandate to provide advice and recommendations. Ensure that relevant environmental, social, governance (otherwise known as sustainability issues) and diversity reporting is integrated into financial reporting frameworks."