A recent article on United Bank in Philadelphia appeared in the Philadelphia Inquirer today. While the article accurately quotes some of our research, it carefully ignored other points. Here is what we submitted to the paper:
Consider something as small as the House dress code being applied differently to the Chairman of the Congressional Black Caucus. And there is the more important fact that "redistricting could mean the CBC’s four most senior – and oldest – members will soon be gone." This is an unprecedented level of anti black hostility and threatens to turn the Congressional racial clock back to pre-reconstruction days. And finally, five of the eight cases before the House House Ethics Committee involve blacks. While I might not agree with their alleged behavior, I know that Black congressmen are not committing 62% of the ethical violations on Capitol Hill. That much is certain. I believe many of these investigations are racially motivated.
From an economic perspective, I note that "the median wealth of white households is 20 times that of black households and 18 times that of Hispanic households, according to a Pew Research Center analysis of newly available government data from 2009. From 2005 to 2009, inflation-adjusted median wealth fell by 66% among Hispanic households and 53% among black households, compared with just 16% among white households."
That means that blacks starting off with $100.00 of wealth in 2005 had $47.00 left by 2009, a remarkable decline. When you see this type of decline, you know that financial and other institutions will suffer.
Recall that Wells Fargo, "one of the nation's largest banks, allegedly set up a special sales office to steer risky subprime loans to residents in Prince George's County, Baltimore city and other predominantly black communities..which some in the office called 'ghetto loans.' Many customers with sufficient income, credit and savings to qualify for fixed, lower-interest mortgages were still urged to take subprime loans..because the higher rates meant bigger profits for the bank: 'If a loan officer referred a borrower who should have qualified for a prime loan to a subprime loan, the loan officer would receive a bonus.' "
Black banks, just when they might be able to help, have been decimated.
We said in 2003, "Without meaningful reform, there is a small (but significant and growing) risk that our economic system will simply cease functioning." Unfortunately, we were right. We knew this crisis was coming and that it would impact Black banks. We proposed to create a fund, MBF, LP, to make equity investments in minority owned banks. Despite support from minorities working within some of the banking regulatory agencies, I was not able to get non minority regulators at a key banking regulator to approve the deal.
In addition to United Bank, at least one other Black bank is behaving in a manner that exacerbates the problem. Boston's only black owned bank, OneUnited, started "foreclosure proceedings against Roxbury’s historic Charles Street African Methodist Episcopal Church, one of Boston’s oldest and most-respected black churches.." This is idiocy, but probably imposed from outside by (mainly non minority) banking regulators as part of the pattern of anti black hostility noted earlier.
OneUnited is an outlier. Carver Federal, another Black owned bank, tried to help African Americans victimized by fraudulent subprime lending. Carver, too, has been held back in doing so by hostile, mainly non minority banking regulators.
Let's not forget that for every OneUnited, there is a North Milwaukee State Bank, a Black owned bank that recently celebrated it's 40th year anniversary.
We are on record as saying that United Bank needs new energy, new leadership, new investors, new community involvement.
We wish the Black community in Philadelphia luck. Philadelphia deserves to have a strong Black banking institution. I hope the institution changes so that it can survive.
Consider something as small as the House dress code being applied differently to the Chairman of the Congressional Black Caucus. And there is the more important fact that "redistricting could mean the CBC’s four most senior – and oldest – members will soon be gone." This is an unprecedented level of anti black hostility and threatens to turn the Congressional racial clock back to pre-reconstruction days. And finally, five of the eight cases before the House House Ethics Committee involve blacks. While I might not agree with their alleged behavior, I know that Black congressmen are not committing 62% of the ethical violations on Capitol Hill. That much is certain. I believe many of these investigations are racially motivated.
From an economic perspective, I note that "the median wealth of white households is 20 times that of black households and 18 times that of Hispanic households, according to a Pew Research Center analysis of newly available government data from 2009. From 2005 to 2009, inflation-adjusted median wealth fell by 66% among Hispanic households and 53% among black households, compared with just 16% among white households."
That means that blacks starting off with $100.00 of wealth in 2005 had $47.00 left by 2009, a remarkable decline. When you see this type of decline, you know that financial and other institutions will suffer.
Recall that Wells Fargo, "one of the nation's largest banks, allegedly set up a special sales office to steer risky subprime loans to residents in Prince George's County, Baltimore city and other predominantly black communities..which some in the office called 'ghetto loans.' Many customers with sufficient income, credit and savings to qualify for fixed, lower-interest mortgages were still urged to take subprime loans..because the higher rates meant bigger profits for the bank: 'If a loan officer referred a borrower who should have qualified for a prime loan to a subprime loan, the loan officer would receive a bonus.' "
Black banks, just when they might be able to help, have been decimated.
We said in 2003, "Without meaningful reform, there is a small (but significant and growing) risk that our economic system will simply cease functioning." Unfortunately, we were right. We knew this crisis was coming and that it would impact Black banks. We proposed to create a fund, MBF, LP, to make equity investments in minority owned banks. Despite support from minorities working within some of the banking regulatory agencies, I was not able to get non minority regulators at a key banking regulator to approve the deal.
In addition to United Bank, at least one other Black bank is behaving in a manner that exacerbates the problem. Boston's only black owned bank, OneUnited, started "foreclosure proceedings against Roxbury’s historic Charles Street African Methodist Episcopal Church, one of Boston’s oldest and most-respected black churches.." This is idiocy, but probably imposed from outside by (mainly non minority) banking regulators as part of the pattern of anti black hostility noted earlier.
OneUnited is an outlier. Carver Federal, another Black owned bank, tried to help African Americans victimized by fraudulent subprime lending. Carver, too, has been held back in doing so by hostile, mainly non minority banking regulators.
Let's not forget that for every OneUnited, there is a North Milwaukee State Bank, a Black owned bank that recently celebrated it's 40th year anniversary.
We are on record as saying that United Bank needs new energy, new leadership, new investors, new community involvement.
We wish the Black community in Philadelphia luck. Philadelphia deserves to have a strong Black banking institution. I hope the institution changes so that it can survive.