January 29, 2015
By Freddie Allen
NNPA Senior Washington Correspondent
Predatory lenders continue to target poor, Black and Latino communities, siphoning off $103 billion in fees and interests every year, and the rest of us are paying for it, according to a recent report by United for a Fair Economy.
“This is more money lost in poor communities than the United States spends on domestic food aid annually,” the report said. “We as a society end up subsidizing that lost income (an average of $3,029 per affected household) through a social safety net that is already underfunded and overcapacity.”
In “State of the Dream 2015: Underbanked and Overcharged,” United for a Fair Economy (UFE), an independent research group that advocates for economic equality across race, gender and class lines, chronicled the disparities that continue to plague the banking industry.
Mike Leyba, the communications director at UFE and co-author of the report said that systemic economic exclusion, largely based on race, has existed for hundreds of years in the United States.
The free labor of kidnapped and enslaved Africans enabled White male land owners and the financial institutions that supported them to accumulate massive amounts of wealth over hundreds of years.
Following the Civil War, Jim Crow laws and “The Black Codes,” continued to deprive freed African slaves of economic opportunities for decades.
After World War II, the GI Bill provided White male veterans a pathway to college, professional careers and a boost into the middle class, a bridge that was closed to Black veterans who also fought and spilled blood overseas. Later, the Federal Housing Administration blocked Black families from moving into suburban neighborhoods, built with and partially funded by government subsidies.
“More than a quarter of all White families shifted from renting to owning in the twenty years following WWII,” stated the report. “Despite laws to the contrary, Black people were excluded from buying homes in White neighborhoods and were forced instead to live in urban ghettos.”
According to the UFE report, less than 1 percent of all mortgages from 1930 to 1960 were issued to Black people.
By 2013, the median wealth held by White families ($141,900), dwarfed the median wealth ($11,000) of Black families.
“As an estimated 80 percent of assets come from transfers from prior generations, the history of the financial situations of prior generations is a primary cause of the racial wealth gap,” stated the report.
Leyba said that economic exclusion, largely based on race still exists, but it’s much harder to pinpoint.
“It may not be legalized or sanctioned by the federal government,” said Leyba. “But it still exists.”
Economic exclusion continues to plague the banking sector, leaving 93 million Americans “unbanked” or “underbanked.”
“The unbanked are people that do not have any type of consumer checking account, and are outside the entire banking system,” the report explained. “The underbanked are people that have a checking account, but also rely on Alternate Financial Service Providers.”
According to the report more than 20 percent (20.5 percent) of Black households were unbanked in 2013, compared to 3.6 percent of White households.
Forty percent of Black households were full-banked compared to 75.4 percent of White households.
Alternate Financial Service Providers or AFSPs include payday loans, auto title loans, rent-to-own shops, subprime credit cards, high-interest rate installment loans, check cashing, prepaid reloadable debit cards, and money orders, the report said.
Researchers found that people shun traditional banks in favor of AFSPs for a number of reasons. Fifty-eight percent said that they didn’t have enough money to meet minimum balance requirements to keep an account open, while others (17 percent) said that past credit problems made it difficult for them to open new accounts.
In recent years, following the housing crisis banks, Chevy Chase Bank, Wells Fargo and Bank of America paid out multi-million dollar settlements in mortgage lending discrimination lawsuits involving Black and Latino borrowers.
But even if Black customers were able to meet the minimum requirements, had good credit and confidence in banks, the contraction and consolidation in the financial sector following the Great Recession have placed traditional banks out of reach for millions of Americans.
AFSPs moved in to fill that void.
“Payday lenders are nearly eight times as concentrated in neighborhoods with the largest shares of Blacks and Latinos compared to White neighborhoods, draining nearly $247 million in fees per year from these communities,” the report said. “Even after controlling for income and a variety of other factors, payday lenders are 2.4 times more concentrated in Black and Latino communities.”
As local bank branches fade away, Leyba said, community businesses dry up.
“What we’re seeing with more large corporate banks taking over those local branches, it makes it so that there is very little incentive for them to invest in that local area,” explained Leyba. Especially, when the large corporate banks can get a much higher yield from other financial products, he added.
UFE researchers suggested that the United States follow other industrialized nations such as France, Germany, Japan, China, Brazil, India, and New Zealand by offering more banking services through local post offices, which have a much larger foothold in urban and rural communities than banks.
The report said that nearly 40 percent of post offices are in zip codes “without a single bank,” and about 20 percent are in zip codes with just one bank.
“In addition to handling money orders, transfers, and debit cards, postal window clerks have experience cashing checks, processing refunds, renting post office boxes, preparing bank deposits, and maintaining business accounts,” the report said.
The report also recommended reforming the Community Reinvestment Act (CRA), modernizing payment technology to keep pace with the new realities of banking and adopting national standards to cap the interest rates on payday loans.
Leyba said that lending circles that provide small community-based loans, have also been successful in emerging markets.
“We know that not everyone will find their way into the banking system, as there is no way to make that happen either through policy solutions or innovations in products,” stated the report. “What policy makers and advocates can do, though, is look for ways to attract, retain and encourage people to begin to build assets, build a favorable credit history and ultimately begin down the path of wealth creation.”
January 22, 2015
City News Service
The Los Angeles City Council approved a total of $250,000 in reward offers today to help capture culprits in three murders in South Los Angeles and the serial rapist known as the Teardrop Rapist. The council approved a $75,000 reward to find the gunman who killed 17- year-old Bert Crump Jr. and injured Clifford Adolfo Williamson on Aug. 22. Crump, who was chased by an unidentified person from the intersection of Normandie and West Gage avenues, ran in the direction of Raymond and Gage avenues, eventually escaping into a car being driven by Williamson, who was passing by. Both men were showered with gunfire, with Crump suffering fatal wounds.
Williamson, who sustained a serious injury to the chest, survived. Crump’s mother, told the council “this has been a rough time in my life,” and she urged anyone who knows anything about who “took my only son’s life” to come forward.
“I can’t sleep at night,” she said.
Also approved was a $50,000 reward in the fatal stabbing of 62-year-old Maria Elena Rivas, who was attacked while walking west on Adams Boulevard near Catalina Avenue. She had been walking home from a Ralphs grocery store at 2600 S. Vermont Ave. LAPD detectives said no witnesses have come forward and they are working on a “very limited” amount of information. Meanwhile, a reward of $50,000 was renewed by the council to find the person responsible for the fatal stabbing of 26-year-old Roshon Davis on Jan. 29, 2014.
An attacker stabbed Davis as he stood at a bus stop northwest of La Brea Avenue and Coliseum Street. The injured Davis ran toward his apartment, but collapsed when he got to his rear gate and died later at the hospital. Authorities urged anyone with information about the three cases to contact the LAPD Criminal Gang Homicide Division at (213) 485-4341.
The council also re-instated a $75,000 reward to track down the serial rapist known as the Teardrop Rapist, who is suspected of sexually assaulting 35 women in the past two decades. Two council members also proposed rewards in two other cases that will be voted on by the council at a later date. Councilman Bernard Parks proposed a $50,000 reward for the arrest and conviction of whoever is responsible for the hit-and-run death of 39-year-old Treva Arnold. The motion will likely be considered at Friday’s council meeting, a council aide said.
Arnold was struck while crossing Slauson Avenue at the intersection with Denker Avenue at 2:35 a.m. Jan. 4. The car that hit her was described as silver or tan and looked to be a Honda, Toyota or Volkswagen heading east on Slauson Avenue. Arnold died at the scene.
Anyone with information was asked to call the Los Angeles Police Department's South Traffic Division at (323) 421-2577 or (323) 421-2500. Councilman Curren Price proposed a $50,000 reward to find the person who killed 32-year-old Moses Nelson at 9 a.m. Nov. 23 near Slauson and Central avenues. Police said a male suspect riding a bicycle fired several shots at Nelson, who died at the scene.
January 22, 2015
Associated Press
CHARLOTTE, N.C. (AP) — A humbled and emotional Michael Jordan fought back tears, feeling vindicated after years of criticism, after being named the Charlotte Business Journal's Business Person of the Year.
The Charlotte Hornets owner said during a nine-minute acceptance speech Tuesday night posted on the organization’s website, that while he’s received many awards as a player, this one was different.
“I’ve been criticized in a lot of different areas from a business standpoint, but I take pride in the ideas and concepts and views that come out of this organization to build the type of basketball program... that the city of Charlotte can be proud of,” Jordan said as he began tearing up.
Jordan won six NBA titles as a player, but his front-office leadership abilities had been questioned - including his decision to take Kwame Brown with the No. 1 pick while an executive with the Washington Wizards.
But Jordan has repeatedly said he is committed to turning the Hornets around and members of his team echoed his sentiments on Wednesday.
Charlotte president and COO Fred Whitfield said Wednesday that Jordan was “genuinely honored and humbled by the award.”
Whitfield said Jordan has listened to fans, including changing the team’s name back to the Hornets upon their request. The franchise had been known as the Bobcats.
“He is so proud to be building something in his home state,” Whitfield said. “So to be recognized with such a prestigious award for his business accomplishments was really, really special to him.”
Jordan’s long-time business manager Estee Portnoy was in attendance at the ceremony, and called the speech “genuine and beautiful” in an email to The Associated Press on Wednesday.
Jordan, a 14-time NBA All-Star who took over as the Hornets majority owner in 2010, said he plans on winning multiple championships with the franchise.
“For all of the people that think that I'm in this for the short term, you better pull your socks up and just hang around — because my promise to this organization and this community is to bring a winner,” Jordan said.
Jordan said when he joined the Hornets as a minority owner he never anticipated taking over as majority owner, but rather was interested in helping bring a winning franchise back to his home state.
But he said when Bob Johnson decided to sell the franchise, it felt like “karma” that allowed him the opportunity own a team in North Carolina.
“I left home. I came back home. And I plan on staying home,” Jordan said.
Jordan, who grew up in Wilmington, North Carolina, talked at length how much of his family still lives in the state.
And he said he’s still driven to win.
“Me personally I could ride off into the sunset and never worry about a thing,” Jordan said. “But my pride brought me back to North Carolina for whatever reason.”
Jordan, who won six NBA titles with the Chicago Bulls, went on to say “a lot of my credits from a basketball standpoint are going to be attributed to Chicago. But I'm from North Carolina.”
Jordan also thanked his employees and his family for their input on his business decisions.
“I take input from all sources of this community be it from my family or be it from business leaders, be it from people walking in the streets,” Jordan said. “And that gives me a sense of my pride in my connection to the community. I don’t take that for granted. I take it with a lot of pride and a lot of respect.”
The Hornets made the playoffs last year but were swept in the postseason by the Miami Heat.
They are currently ninth in the Eastern Conference standings this season.
“We still have a long ways to go as an organization,” Jordan said. “We are just scratching the surface.”
January 15, 2015
By Al McFarlane
Special to the NNPA from Insight News
Rainbow PUSH Coalition (RPC) members accompanied by the head of Minneapolis Branch NAACP recently participated in shareholder consideration of the merger of Medtronic and Covidien.
In a meeting, shareholders of Medtronic, a global medical technology company based in Minneapolis, voted to acquire an Irish-based firm, Covidien. Medtronic CEO Omar Ishrak said that the purpose of the merger is to free up capital to invest in medical technology in the United States. The merger will also have the effect of reducing Medtronic’s U.S. tax burden and will result in relocation of the company’s legal headquarters to Ireland. The vote passed by more than 90 percent.
Medtronic operates in more than 140 countries. The company employs 49,000 people, including 5,800 scientists and engineers, pursuing research and innovation that has led to more than 28,000 patents.
When questioned by RPC Executive Director, Attorney Janice L. Mathis, Ishrak responded that measures already were in place to assure that any U.S. employees who lost jobs as a result of the merger would receive company assistance in finding new work. He also indicated that Medtronic expected to create 1,000 new health sector jobs in Minnesota over the next five years as a result of the merger.
Earlier in the year, Rainbow PUSH president Jesse Jackson, Sr. wrote to Ishrak to request that Medtronic complete RPC’s Corporate Diversity Survey Questionnaire. The survey covers employment, supplier diversity, board composition, philanthropy and recruitment, among other areas. RPC is also requesting that Medtronic release its EEO-1 Form, required by the U.S. Equal Employment Opportunity Commission. Similar requests have resulted in public releases by more than 20 Silicon Valley firms, including Intel, Microsoft and Google, Mathis said.
Medtronic CFO Gary Ellis said diversity, both inside of Medtronic and in its Irish partner, was a priority across the board and agreed to engage in further talks with RPC to consider its suggestions for bolstering diversity in the new company. The proposed talks, in fact, began this afternoon, according to Fernando Vivanco, Medtronic’s Senior Director, Global Communications, who said a meeting between Rainbow Push representatives and Medtronic senior leaders resulted in “good communications” that likely would be the first of many around issues raised by Rainbow PUSH.
The Rev. Jerry McAfee, NAACP president and pastor, New Salem Missionary Baptist Church in North Minneapolis attended the Medtronic meeting, along with Mathis.
“We need 6200 jobs in Minneapolis for lower income families to close the poverty gap. Medtronic could contribute to that equation. We are glad to see Rainbow PUSH in Minneapolis and will continue to work closely with them to achieve a measure of economic stability in underserved communities,” he said.
Montgomery Alabama businessman, Dr. Alfred Seawright, also accompanied Mathis as part of the Rainbow PUSH delegation. Seawright is CEO & President of Medical Place, a veteran-owned service-oriented small business that distributes medical, laboratory, respiratory, scientific, and telemedicine equipment and supplies to hospitals nationwide.
“We are here because Rainbow Push is reaching out to minority businesses making sure they get a chance to do business with big companies like Medtronic, a $48 billion company. Black America already has a relationship with Medtronic as consumers. When you are sick or hospitalized 9 times out of 10, you will be utilizing products created and manufactured by Medtronic. We can build on that for the benefit of the company and for the benefit of our community in terms of jobs and economic development. We are looking to be considered as strategic partners and vendors for companies like Medtronic that have embraced diversity as part of their business and growth strategy,” he said.
For many months, Jackson, founder of Rainbow PUSH Coalition, has urged U.S. lawmakers and corporate executives to find common ground to bring capital back from overseas markets to the U.S. Jackson’s proposal specifically ties tax rate reductions as an incentive to investments in U.S. crumbling urban infrastructure. The vote by a major U.S. firm to call Ireland home should be a wake-up call to policy makers to take Jackson’s infrastructure investment proposals seriously, Mathis said.
Medtronic’s merger with Irish firm is proof that the U.S. needs plans to repatriate corporate capital, she said. In exchange for investment in US infrastructure, global firms should receive tax consideration, Mathis said.
McAfee said RPC’s presence at the Medtronic shareholders’ meeting may signal an expanded presence for the organization in Minnesota. Mathis confirmed that while there are RPC members in the market, it may be time to create an active affiliate and local office.
McAfee said he was impressed that Medtronic executives acknowledged the persistent disparities in wealth, health and education despite the state’s stellar reputation as a good place to do business and a good place to live. He said he hopes some of the proposed workforce growth promised by Medtronic could be targeted against the high unemployment in North Minneapolis. “What if Medtronic would build a plant in North Minneapolis? What if 500 of the new jobs were made available in North Minneapolis,” he said.
McAfee said Rainbow Push’s economic and business development skill set and relationship building capacity with Twin Cities based multinational corporations could lead to collaborative innovation and covenants that eliminate the job gap for North Minneapolis. He said, “What if 30 companies each committed to 200 jobs for North Minneapolis residents? That would eliminate the 6200 job deficit that is crippling our community right now.”