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Mid-Year 2022 Minority Bank and Thrift Review

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The number of minority banks in the US held steady at between 168 and 174 in the second quarter of 2022. See:  https://minoritybank.com/mid-year-2022-minority-banks-and-thrift-review/

Court Actions Damage the International Reputation of the US

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Recent Supreme Court decisions damage the international reputation of the US. On June 24, the Court, in Dobbs v. Jackson Women’s Health Organization , upheld a Mississippi law that banned abortions after 15 weeks of pregnancy, with no exception for rape or incest. The decision strikes down the landmark Roe v. Wade decision.  In West Virginia v. US Environmental Protection Agency (EPA ) prevents the agency from regulating greenhouse gas emissions, a core mission and task of the EPA. The regulation questioned concerns carbon dioxide generated by power plants — in the middle of increased global efforts to reduce these emissions. This case was based on the Clean Power Plan, a plan to cut emissions from coal-fired power plants that was never implemented. Biden tried to have the case dismissed since the policy at issue was not operational nor was it being resurrected. The Court ruled anyway. The EPA decision will have the added impact of limiting the ability of the US government to address

Fixing Abortion And Black Maternal Mortality Is NOT Up To the Supreme Court. It's Up to the Fed...

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Black women die in childbirth at disproportionate rates compared to their white counterparts. Research conducted by the Centers for Disease Control and Prevention (CDC) clearly shows that social determinants - access to nutrition, transportation, and healthcare——are crucial factors. With the decision to restrict access to birth control and care, the Supreme Court imposed additional penalties on a selected portion of the US population - Black women. They were added without due process or a trial at the individual level. These elevated risks are clear and undeniable, as explained below. Assume two population groups or sectors. In Sector One, women die in childbirth at the rate of ten per 1,000 live births. In Sector Two, the maternal mortality rate is 100 per 1,000 live births. With the elimination of birth control, there are 2,000 live births in each sector. This implies 20 Sector One deaths and 200 in Sector Two. The policy change results in 10 additional deaths in Sector One and 1

BankThink: Waters is right to make Wells Fargo a poster child for bad practices. William Michael Cunningham. March 11, 2020

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Wells Fargo will  testify several times this month before  the House Financial Services Committee, under the leadership of Rep. Maxine Waters, D-Calif. And Waters is no radical, despite what  right-wing propagandists say . She is an experienced, capable legislator with a solid track record of protecting the public. Yet Waters is also not to be trifled with. Both the independent chairman and lead director at the board of Wells Fargo  resigned Monday  after Waters called for their resignation. Interestingly, those same two leaders are the only witnesses scheduled to testify at  Wednesday’s hearing . (It’s long overdue that the entire board be replaced, as  noted in 2018 .) In 2019, Wells Fargo reported  net income of $19.5 billion . That was lower than the  $22.4 billion  the bank earned in 2018, as the cost of litigation started to impact profits.   Wells recently agreed to pay  regulators an additional $3 billion  to cover fines for violating consumer protection laws. The bank has a lo

Powell at the House Financial Services Committee. Jonathan Rosen, Impact Investing Intern, American University.

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               On Thursday, June 23, 2022, Chairman of the Federal Reserve Jerome Powell testified before the Committee of Financial Services in the House of Representatives. During this testimony, Powell discussed many of the issues relating to the responsibilities of the FED, largely explaining what role they were currently playing in the role of shaping monetary policy. With the rise of inflation, the federal reserve has decided to utilize the tools that they have access to, by raising interest rates by .75 percent. This is the largest increase in benchmark interest rates in almost 30 years, which shows how seriously the Federal Reserve views the rise in inflation that is currently occurring in the United States. However, during the questioning period of Powell’s testimony, it was clear that the two parties represented on the committee had vastly differing views on the causes of inflation, and what role the Federal Reserve should play in combatting its rise.               The Dem

Repeal the Community Reinvestment Act and Start Over. American Banker Newspaper BANKTHINK.

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Blow up the CRA and start from scratch By    William Michael Cunningham June 22, 2022, 9:47 a.m. EDT 2 Min Read The Community Reinvestment Act was enacted in 1977 “to address inequities in access to credit for low- and moderate-income individuals and communities.” The law should be repealed and replaced. Like hanging a crystal chandelier in a lean-to shack, any efforts to revise the law are a waste of time. This especially includes efforts proposed by the Federal Reserve Board “to strengthen the achievement of the core purpose of the statute, and to adapt to changes in the banking industry, including the expanded role of mobile and online banking.” Percentage of Home Loans Applications Approved, by race, at OneUnited, a Black-owned bank, in 2020 The increase in financial institution-induced harm, including environmental damage, demands a different, more honest and authentic approach in reviewing CRA’s inability to facilitate access to banking services and credit. This is especia

Intergenerational Transfer of Environmental Assets. Gregory Savioz-Buck and Emily Fowler, Impact Investing Interns.

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   Transferring assets between generations is a natural part of human evolution. In addition to monetary assets, between generations people pass on their wisdom, knowledge, opportunities, etc. It is a natural phenomenon. Usually, such assets retain or even gain value. For example, women today have more opportunities to make use of their assets than did the generation just before us. Sadly, the environment is an exception. For the first time in recent human history, our environmental assets (air, water, land and a stable, continuously life-supporting environment) may have lost value as they have been transferred from one generation to the next.  In contemporary Western economies, it is normal for generations to pass down debt. For example, between the 1980s and 1990s, the national debt increased from $908 billion to $3.233 trillion. In 2000, the national debt was $5.674 trillion. But this number grew to $13.562 trillion by 2010 and exceeded the debt cap of $30 trillion in 2022. What’s

Bloomberg Government - State Government Affairs: Midterm Elections and Policy Prospects. Jonathan Rosen, Impact Investing Intern, American University

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  Bloomberg Government recently wrapped up an event which discussed everything from the upcoming 2022 mid-term elections to the potential policy goals that will either affect or are affected by the current political environment. The primary focus of the first panel was to forecast what will occur in the mid-terms. The overwhelming consensus of the panel was that 2022 will be a favorable year for Republican candidates on the ballot throughout the country. There are a few key reasons for why this is likely to be the case. The fact that this there is a Democrat currently in the White House, Joe Biden, and a Democratic controlled House and Senate puts the Democrats at an immediate disadvantage for 2022. Historically, the party in power typically suffers losses in the mid-terms, with the presidential party losing an average of 26 seats in the House. Combining this with Biden’s low approval ratings, the rise of inflation, and Republican desires to run on immigration and crime, the Democrat

No One Over 35 Should Be Allowed to Make Climate Policy

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        There are many problems the world is trying to solve in 2022: the climate crisis, restarting after COVID, inequality, war, just to name a few. We count on our politicians and representatives to make decisions that will not only benefit us today, but will lead to a better, safer, more stable and equal world tomorrow. Here’s the problem: lots of the people in positions of power, with the ability  to make the decisions that will wind up impacting the state of the climate in 30 years will not be around to experience the consequences of their decisions. The choices of past generations may have brought them comfort, profits and convenience , but these decisions also created polluted water and air and unjust social systems that my peers and I must now find a way to correct. Our survival will depend on the ability of my generation to overcome environmental damage resulting from short sighted decisions made by policy makers from earlier generations.  At Creative Investment Research,

Yellen at the New York Times. Jonathan Rosen, Impact Investing Intern. American University

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Picture: Mr. Rosen (left, 2nd from bottom) at the New York Times’s DealBook conference in Washington, D.C. on Thursday June 9th. Treasury Secretary Janet L. Yellen was among those in conversation with The Times’s Andrew Ross Sorkin. Picture by Amanda Andrade-Rhoades for The New York Times. On Thursday June 9th, the New York Times hosted their first in-person Dealbook event since 2019, and headlines were made. Among the speakers present were interim CEO and former full-time CEO of Starbucks Howard Schultz, Democratic Senator Chris Murphy of Connecticut, and journalists Maggie Haberman and Abby Phillip. However, the speaker at Dealbook that made the most note-worthy comments was Secretary of the Treasury Janet Yellen. During her half-hour interview, Yellen addressed several issues facing the country including inflation, crypto, ESG, and the likelihood of a recession. When asked about the effect corporate greed had on the rise of inflation in the United States, as certain members of the D

Projected Impact of Gun Laws on Corporate Profits in Texas

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More Fortune 500 companies are located in Texas than in any other state. Texas successfully used low taxes and minimal regulations as bait to recruit companies like Tesla and Oracle. The state promoted these “advantages” in ads highlighting their “free-market” environment and criticizing the "tax and spend policies of liberal leadership" in Democrat-run states. Four million people migrated to Texas over the past ten years. Our economic models predict a reversal, however. State of Texas corporations on the Fortune 1000 list generate $2.2 trillion in revenue, $158 billion in profit. They have a market value of $3.8 trillion and employ 2.5 million people nationwide. We continue to believe this increased corporate presence in Texas imposes a tax on the nation as a whole. Texas allows anyone 21 or older to carry handguns without training or licenses, and maintains lower gun purchase age limits. Beyond the recent abortion bill, which allows people to sue those who "aid and abe

Corporate Responsibility and Guns, Jonathan Rosen, Impact Investing Intern, American University

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Whether the issue being discussed is climate change, abortion rights, civil rights, or something else, there is no doubt that corporations can have a major effect on the implementation of policy. There is perhaps no area where this is more apparent than the issue of gun violence and mass shootings. This potential for change exists because of multiple factors. First, hundreds of mass shootings have taken place over the course of the past decade, with little to no action taken to prevent them. At the federal level, gun control legislation has been non-existent since the expiration of the Federal Assault Weapons Ban in 2004. Additionally, action to address this issue has been limited at the state and local level. This is where the power of corporations comes into play. Any company has the power to decide that they no longer want to run their business in a state or city that refuses to comply with safety standards deemed  necessary. The safety standard might refer to gun violence or to ano

Special Envoy to Iran before the Senate Foreign Relations Committee. Jonathan Rosen, Impact Investing Intern, American University

On May 25th, Special Envoy to Iran, Robert Malley, testified before the Senate Foreign Relations Committee on the state of a potential re-entry into the Joint Comprehensive Plan of Action (JCPOA) with Iran. He discussed negotiations taking place between the United States, our allies, and Iran. The talks center around re-entering the deal that former President Trump withdrew from in 2018. While Malley stated that specific details of these negotiations could only be discussed in a classified setting, he reiterated that the Biden administration's willingness to use any diplomatic method to ensure that the government of Iran, which is recognized as the largest example of state sponsored terrorism in the world, would never obtain a nuclear weapon. Malley expressed that while it was the preference of the administration to find a way to re-enter the JPCOA, these talks were “tenuous” at best. He laid the blame for the stalemate on unreasonable demands made by the Iranian government in nego

General Theory of ESG Investing

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  WASHINGTON - May 22, 2022 - PRLog -- Controversies surrounding climate change, diversity, reproductive rights, and other issues have generated significant attention and confusion. We anticipate this uncertainty and volatility will continue. William Michael Cunningham founded Creative Investment Research in 1989 to facilitate a style of investing that is concerned with the issues cited above after recognizing the inability of traditional investment styles to protect and further human needs. We are one of the premier firms in understanding and analyzing Environmental, Social and Governance (ESG), Corporate Social Responsibility (CSR), and impact investing trends. We have been guided by our General Theory of ESG Investing, a portion of which we have published today. As defined in our paper, "Environmental, social, and corporate governance investing is a decision-making process concerning the purchase, sale and management of an asset or assets selected with the goal of attaining an

Climate Change and HSBC

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“Climate change is not a financial risk that we need to worry about..there’s always some nut job telling me about the end of the world.” Banks are “neglecting more pressing problems in order to consider climate risks. I work at a bank that is being attacked by crypto, we’ve got regulators in the US trying to stop us, we’ve got the China problem, we’ve got a housing crisis looming, we’ve got interest rates going up, we’ve got inflation coming down the pipes, and I’m being told to spend time and time again looking at something that is going to happen in 20 or 30 years hence, the proportionality is completely out of whack. Humanity should be focused on adapting to a changing environment” “Who cares if Miami is six meters underwater in 100 years, Amsterdam’s been six meters underwater for ages, and that’s a really nice place. We will cope with it.” Stuart Kirk, HBSC (Fined $6,512,909,407 since 2000) - Head of Responsible Investing

Musk is as Wrong as S&P

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According to news reports, "Tesla CEO Elon Musk blasted ESG investing as a 'a scam' after his electric vehicle company was booted from a top index of socially responsible companies over labor practice concerns. " Musk also stated that "that Standard and Poors.. lost its 'credibility' by pulling Tesla from its index of companies that meet environmental, social and governance (ESG) criteria, while leaving oil giant #exxonmobil on the list. " He is, of course, correct. S&P was fined $1.5 billion for falsifying mortgage security ratings in the years leading up to the 2008 financial crisis. Their credibility, such as it is, has been available for purchase for decades. We know what they are. Mr. Musk's complaints are driven by self interest, however, not by concern for the well being of society. As such, his concerns are as invalid as S&P's ESG ratings. Note that this does not mean S&P is wrong about Tesla. ESG data is easily manipul

FEDERAL AGENCY EQUITY ACTION PLANS

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Federal Agency Equity Actions Plans Compiled with Biden Executive Order.  https://www.amazon.com/gp/product/B0B11LLRG3/ref=dbs_a_def_rwt_bibl_vppi_i2

9th Annual Conference on Financial Market Regulation (CFMR 2022)

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The Division of Economic and Risk Analysis (DERA) at the US Securities and Exchange Commission (SEC) held the 9th Annual Conference on Financial Market Regulation on May 6, 2022. Co-hosted by Lehigh University’s Center for Financial Services (CFS), University of Maryland’s Center for Financial Policy (CFP), and CFA Institute, the conference brought academic participants together to discuss topics of interest and relevance to the SEC. Chief Economist Jessica Wachter opened the conference,  followed by comments from SEC Chair Gary Gensler and a keynote by SEC Commissioner Allison Herren Lee, appointed by the prior president. The conference highlighted a continuing lack of securities market regulatory capacity. While we appreciate the desire many SEC employees have to protect the public, we note that, for the most part, the SEC remains an ineffective public interest regulator. Their lack of regulatory effectiveness and the securities industry greed cost the nation $19.2 trillion in the ye

Update on Seaweed Farming by Evan Li, Impact Investing Intern. Charlotte Latin School

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Founded in 2003, the Alaskan Native Conservancy is a Native-led organization that seeks to “protect and preserve endangered habitats and traditional food sources…while at the same time counteracting climate change…. and…strengthen[ing] Native Alaskans’ inherent rights.” It is living proof that seaweed farming can both empower marginalized communities and solve climate change. CIR has already previously discussed both the environmental impacts and economic viability of seaweed farming, so I will not focus on them here. Rather, I will explore how seaweed farming, specifically used by the Alaskan Native Conservancy, has served indigenous communities.  The Alaskan Native Conservancy recognizes that the “major barrier to entry into the kelp mariculture industry” is access to parent kelp seed stock. Seed stock is necessary, the Alaskan Native Conservancy claims, to establish a healthy network of kelp farms in Prince William Sound. Their model for portable kelp seed nursery operations enable

Treasury Secretary Janet Yellen's Surprise Visit to American University to Speak on the Future of Cryptocurrency and the Government’s Role in it. Kalel Carkeek, Impact Investing Intern, American University.

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  Yellen beings with the recently signed Executive Order by President Biden. She states, “digital assets have grown explosively reaching a market cap of $3 trillion last November from $14 billion just five years prior.” As a student at American University, I find it shocking that this was the first time anyone this big in government has given a speech at my university. Usually, we are overshadowed by our rival Georgetown, but Secretary Yellen made an impact on the students of American with her speech on the future of cryptocurrency.   Certain cryptocurrencies like Bitcoin have remained volatile, but with USD backed stable coins the application of Central Bank Digital Currencies could be successful. Yellen stresses the importance of responsible innovation guided by the governments six policy objectives: • Protect consumers, investors, and businesses • Safeguard financial stability from systemic risk • Mitigate national security risks • Promote US leadership and economic competit

Greenwood Bank Opens

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According to a March 25, 2021 press release, "Greenwood, the digital banking platform for Black and Latino individuals and business owners..announced it has closed $40 million of Series A funding from six of the seven largest U.S. banks and the top two payment technology companies: Truist, Bank of America, PNC, JPMorgan Chase, Wells Fargo (Its still time to Clean House at Wells), Mastercard, and Visa."  The Greenwood online fintech platform (not a bank) officially opened its virtual doors for business on April 26, 2022.  The website notes that "Greenwood is not a bank. Banking services provided by Coastal Community Bank , Member FDIC. The Greenwood Debit Card is issued by Coastal Community Bank pursuant to a license by Mastercard International." It is significant to note that Coastal is not Black-owned, but they do have a significant social impact portfolio. We have no doubt that Greenwood attempted to enlist the aid of a Black bank, but, in addition to being small

NEW REPORT SHOWS RACISM DISCOURAGES BLACK BUSINESSES FROM FUNDING Black Enterprise Magazine. Jeffrey McKinney. March 23, 2022

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While multiple reports have shown rising interest in financing Black-owned small businesses, a new study shows an underlying problem still remains. According to the “State of Minority Business, March 2022” report by Creative Investment Research , there has been less understanding of the core issues small Black-owned firms face in gaining funding to start or grow enterprises. The analysis pinpoints why Black-owned firms continue to experience under-performance in accessing capital across the nation’s financial services-industry. William Michael Cunningham, an economist and owner of Creative Investment Research in Washington, D.C., says those factors include elevated discouragement when applying for financing, low-profit margin industries, and a reported undercount by the U.S. Census Bureau of the number of black owned businesses. He says potential discrepancy can lead to less funding from federal, state, and local agencies to support to those ventures. Cunningham swears the lack of fin

Greed Adjusted CPI up only 5.95%, not 8.5%

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The Creative Investment Research Greed Adjusted Consumer Price Index increased at a 5.95% annual rate in March, 2022 before seasonal adjustment. The chart below shows the Index on a Greed and Seasonally Adjusted Basis: The CPI increase has been driven by two factors:  Oil and energy prices in the non-Greed Adjusted Consumer Price Index: and corporate greed: Without price gouging, our Greed Adjusted inflation rate is 0.84%. For the Non-Greed Adjusted CPI Index, increases in the indexes for gasoline, shelter, and food were the largest contributors to the seasonally adjusted all items increase. The gasoline index rose 18.3 percent in March and accounted for over half of the all items monthly increase; other energy component indexes also increased. The food index rose 1.0 percent and the food at home index rose 1.5 percent.