“The banks of this country are remote from the people and the people regard them as not belonging to them but as belonging to some power hostile to them.”

Good guess, but that is not a quote from US Senator Elizabeth Warren; but it could be. It is from a 1908 keynote address to the American Bankers Association by Woodrow Wilson.

With the National Community Reinvestment Coalition’s annual conference only 10 days away {not too late to register}, I went into the DISCLOSURE archives to April 1977 before the Community Reinvestment Act (CRA) was passed. Thanks to the Adrian Dominican Sisters and the Dominicans’ Province of St. Albert the Great, a resolution was introduced for that year’s shareholders meeting of First National Bank of Chicago. I was raised by Dominicans in more ways than one.

The resolution would have required the bank to allocate home mortgage loans proportionately in terms of deposits it obtains from Chicago neighborhoods. To no surprise, it was roundly defeated but I did get my first taste of corporate arrogance thanks to Robert Abboud, the bank’s chairman at the time.

It was a stark contrast to A.P. Giannini, who founded Bank of America in 1904 because he was indignant at the neglect of San Francisco’s Italian neighborhood by other banks. He had his desk in the open on the first floor where everyone entering could see him. “That’s one trouble with bankers,” he is quoted in Biography of a Bank, “They shut themselves off away from people and don’t know what is going on.”

Seven years later, the most impressive agreement in the short five-year history of CRA was announced on March 6, 1984 when First National Bank announced that it had allocated $100 million over five years, for loans at below market rates to revitalize and redevelop Chicago neighborhoods. What a difference the federal Community Reinvestment Act had made. This Neighborhood Lending Program with new loan products was designed over two months through productive negotiations, community tours and discussions between bankers and community leaders. First Chgo NLP March 1984

The new bank chairman, Barry Sullivan stated at the joint press conference, “The community groups have been instrumental in helping to analyze the needs of our city and developing a program that will address the credit needs of our Chicago neighborhoods.” Dialogue had soothed the hostility.

A formal CRA challenge never had to be filed, and only a request to the Federal Reserve Board for an extension of the public comment period was necessary to provide the time to reach agreement on the program. Many lessons were learned over 30 years ago that remain relevant today.

Bottom line for rebuilding our communities now? Bankers need to heed A.P. Giannini and be engaged with their communities to know what is going on. Regulators need to assure that they do. Community leaders need to lead the way.

This week’s addition to the U2Cando playlist has been made famous by Mavis Staples:

Oh, mmm, I know a place
Ain’t nobody cryin’, ain’t nobody worried
Ain’t no smilin’ faces, mmm, no no
Lyin’ to the races, help me, come on, come on
Somebody, help me now
(I’ll take you there)

Just take me by the hand let me
(I’ll take you there)
Let me, let me, let me lead the way
(I’ll take you there)
Let me take you there
(I’ll take you there)

The Staple Singers, I’ll Take You There


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