Recycling Black Dollars-CRA (Involvement)

HOW BLACKS and OTHER MINORITIES CAN REACH ECONOMIC PARITY UTILIZING “CRA’

My first knowledge of the COMMUNITY RE-INVESTMENT ACT of 1977 CRA, occurred in 1982. During that period Church Leaders and Community Leaders began a protest regarding the discriminatory practices of banks in Atlanta Georgia. An effort was made for African Americans to withdraw funds from the predominantly White Banks, and deposit in Black owned banks. The Churches along with Community Organizations began asking all African Americans to deposit their monies in Black owned banks.
Realizing the effect this move would cause the White owned banks, a proposal was presented to these Community Leaders, now making them aware of the CRA and its purpose and benefits to the Minority Community. This protest ended when the Bankers promised and began to make low interest loans to the low, moderate income, and began a process to include African Americans. Banks up to this period was fulfilling their CRA obligations according to the Act by making loans to White females, the Girl Scouts and other individuals and organizations who were predominantly White. Once the Atlanta protest was squashed by the Bankers in Atlanta and few Community Organizations knowing or realizing the protections afforded minorities under the CRA Act, bankers went back to business as usual. Later in the early nineties a few Community Organizations entered into agreements with banks, some with little, most with no success. Most agreements entered into did not address the needs of African Americans and other minorities, who are most in need of this legislation and its intent. One example was an agreement Bank of America entered into with a group in the Bay area of California, where approximately 5 billion dollars was committed to several community projects in the city of San Francisco, California. Oakland the most poverty ridden city in California, received no committed funds.

As stated by Hugh B. Price then President of the National Urban League, “most people who live outside of Washington DC have probably never heard of the Community Reinvestment Act. Yet though unsung, the CRA is one of the most important pieces of civil rights legislation Congress has ever passed. He went on to say “Congress passed the Community reinvestment Act in 1977 in response to clear evidence of the noxious effects of “redlining” – the systematic refusal of lenders to provide loans to businesses, homeowners and prospective home buyers in particular neighborhoods, especially those which were predominantly Black or Hispanic.”

For more information on CRA (Community Re-Investment Act of 1977) see website www.unitedaffirmativeactiondevelopment.com

9/11/05

WHY CHASE BANK SHOULD NEGOTIATE A CRA AGREEMENT WITH UAAD, WITH EMPHASIS ON ASSISTING THE HURRICANE VICTIMS.

UAAD’s purpose and aim is to negotiate an agreement with Chase Bank to make available low interest loans that can primarily be negotiated under CRA circumstances for low income, moderate income individuals that will include African Americans. It is our opinion that this act and a good faith effort on the part of Chase Bank will supplement the necessary financial support needed by the flood and hurricane victims. UAAD’s purpose is to ask Chase Bank to honor our negotiation in order that a process can be developed immediately to assist our members (to include those who are suffering from Katrina) in low interest loans and fulfill the banks CRA obligations at the same time

In addition to fulfilling the banks CRA requirements, our program is a win situation for the bank and the community it serves (see our web site). UAAD’s proposal consist of community based loan programs micro-managed by UAAD to assist and help provide consultation in order that these low interest loans will be paid back to the participating bank. These community based loans instituted under CRA guidelines have been successful in the past. It allows the bank to fulfill its CRA obligations, and meets the prudent loaning practice required by the FDIC.

UAAD would like to meet as soon as possible with the proper official in order to present our proposal .

ARE YOU GOING TO TELL ME SOMETHING?

The CRA was enacted in 1977 to prevent redlining and to encourage banks and thrifts to help meet the credit needs of all segments of their communities, including low- and moderate-income neighborhoods. It extends and clarifies the longstanding expectation that banks will serve the convenience and needs of their local communities. The CRA and its implementing regulations require federal financial institution regulators to assess the record of each bank and thrift in helping to fulfill their obligations to the community and to consider that record in evaluating applications for charters or for approval of bank mergers, acquisitions, and branch openings. The federal financial institution regulators are: Office of the Comptroller of the Currency; Board of Governors of the Federal Reserve System; Federal Deposit Insurance Corporation; and Office of Thrift Supervision.
The law provides a framework for depository institutions and community organizations to work together to promote the availability of credit and other banking services to underserved communities. Under its impetus, banks and thrifts have opened new branches, provided expanded services, adopted more flexible credit underwriting standards, and made substantial commitments to state and local governments or community development organizations to increase lending to underserved segments of local economies and populations.

Letter from Bank One Columbus, OH dated 2/96
Mr. Ellis,
As a follow up to our telephone conversation, I have exchanged calls with representatives of Premier Bank and they are aware that you and I have spoken. I have discussed your request for assistance with Arline Creed of Premier in Baton Rouge. She advises me that she and Nathan Thornton have been in contact with the bank's Public Funds Department and that they intend to visit with you at some date in the near future regarding facility needs in Grambling. I shared with Ms Creed our willingness to assist, and that our community development resources were available to her. I would encourage you to continue your dialogue with Ms. Creed and Mr. Thornton. They have assured me that they are making every effort to understand the scope of issues in Grambling and those they intend to fully respond to those issues. Please do not hesitate to contact Ms Creed if you have any continuing concerns. We look forward to be being of assistance and having the opportunity to address the lending needs of the Grambling market.
Julia F. Johnson, Senior Vice President

August 24, 1999
Mr. Walter Ellis, Executive Director
United Equity Development Corporation
2606 Prospect Avenue, Suite A .
Riverside, CA 92507
Dear Mr. Ellis
In follow up to our discussions, I would like to thank you for providing First
USA Bank with the opportunity to bid on the affinity credit card business for the UEDC. As I mentioned in my letter dated July 30th we are currently looking at groups with a membership of 20,000. Unfortunately your current membership of 2,500 does not meet the bank's present size requirements; therefore I must respectfully decline at this time.
I wish you success with your organization and will be happy to reevaluaate the opportunity as your membership grows.
Sincerely,
Suzanne M. Devoe
Vice President Research

September 2, 1998

Mr. Walter Ellis
Executive Director
United Affirmative Action Development Corporation 203 E. 7th St.
Perris, CA 92570

Dear Mr. Ellis,
This letter is being written, at your request, so as to provide a definitive position by Banc One with you and your organization. The conclusions reached are based in part on the following:

· Your organization is not incorporated in Louisiana or any other state, does not have a 501c3 designation, and has never filed a tax return.

· Your organization, at this time does not have an active membership.

· You reside in California and Banc One has no charter in that state.

We are prepared to continue discussions with you about how your organization and Banc One can work together in communities where we have a banking presence; but we do not feel that your organization, at this time, would warrant any funding.
We agree with your contention that Premier Bank and you had discussions about a proposed agreement with your group in 1995 and that there were continued discussions after Banc One acquired Premier Bank in early
1996. However, no agreement was ever finalized nor executed. During the last two plus years since those discussions, you have moved back to California, not obtained any legal status for the U.A.A.D.C. group, not developed the organization, nor have any substantiated clients.
We further acknowledge that during the discussions about a proposed agreement that Premier was reviewing whether it would be appropriate to pay you a commission for transactions referred to Premier when a closed loan resulted; however, this was a part of the proposed agreement discussed above that was never executed. We further contend that there have never been any closed loans from any referral origination from yourself.
Our public file is available for your review at anytime.
Sincerely,

Jerry Killingsworth

Comptroller of the Currency
Administrator of National Banks

December 29. 1998
Mr. Walter L. Ellis 203 East 7th Street Perris CA 92570
Re: Case# 029760
BANK ONE, ARIZONA, NATIONAL ASSOCIATION

Dear Mr. Ellis
This letter acknowledges a case has been opened in the Customer Assistance Group of the Office of the Comptroller of the Currency (OCC). Please make note of the case number listed above. You should reference this case number when inquiring about the case by phone or include this number on any correspondence you may provide to this office. A Customer Assistance Specialist will be assigned and will contact you if any additional information is needed about your case. We will review the information you have provided, contact the bank if necessary for additional information and inform you of our decision within the next 45 days. If you believe you will be harmed by this delay, you should consult an attorney immediately to protect your rights. If you have questions, please contact this office at the number below.
Sincerely,

Barbara Haynes
Customer Assistance Specialist

Comptroller of the Currency
Administrator of National Banks

February 18,1999
Walter L. Ellis
203 East 7th Street
Perris CA 92510
Re: Case # 029760
BANK ONE, ARIZONA. NATIONAL ASSOCIATION

Dear Mr. Ellis:
This is in response to your complaint against Bank One regarding your contract negotiations with the bank.
You stated that Bank One was obligated to you on a contract that was in negotiation and that the bank had an obligation to establish a contract with you based on those negotiations.
Bank One’s position is that it did have contract negotiations with you, as a continuation of your negotiations with Premier Bank, which Bank One acquired. Bank One states that no contract was ever signed and no loans were ever closed as a result of any referral by you. In short, the bank denies any contract or obligation to you.
Your dispute involves questions of a contractual nature with Bank One. In addition, a dispute exists as to whether any contract or obligation bas been established at all. We can neither intercede in a private party situation regarding the interpretation or enforcement of a contract, nor can we resolve the factual dispute about the existence of a contract. The Office of the Comptroller of the Currency does not have the judicial power to interpret or enforce private contractual agreements or resolve factual disputes.
While banks are required to comply with the Community Reinvestment Act, that Act does not require specific actions or contracts with any particular firms or individuals. In this case, Bank One has stated that it is not satisfied with your company's credentials or foundation in the
communities the bank serves.
We regret we cannot assist you further. If you do not agree with or understand the bank’s response, we can only suggest you consult with an attorney on what legal remedies you may have.
Sincerely,

Rich Hendry
Customer Assistance Team Leader

Letter from Bank One dated 9/98
Mr. Ellis,
This letter is being written, so as to provide a definitive position by Bank One with you and your organization. The conclusions reached are based in part on the following: Your organization, at this time does not have an active membership; you reside in California and Banc One has no charter in that state. We are prepared to continue discussions with you about how your organization and Banc One can work together in communities where we have a banking presence; but we do not feel that your organization, at this time would warrant any funding. We agree with your contention that Premier Bank and you had discussions about a proposed agreement with your group in 1995 and that there were continued discussions after Banc One acquired Premier Bank in early 1996. However, no agreement was ever finalized nor executed. During the last two plus years since those discussions, you have moved back to California, not obtained any legal status for the UAAD group, not developed the organization, nor have any substantiated clients. We further acknowledge that during the discussions about a proposed agreement, that Premier was reviewing whether it would be appropriate to pay you a commission for transactions referred to Premier when a closed loan resulted; however, this was a part of the proposed agreement discussed above that was never executed. We further contend that there have never been any closed loans from any referral originating from you. Our public file is available for your review at anytime.
Jerry Killingsworth

Letter from First USA Partners 8/99
I would like to thank you for providing First USA Bank with the opportunity to bid on the affinity credit card business for UEDC. We are currently looking at groups with a membership or 20,000. Unfortunately your current membership of 2,500 does not meet the bank's present size requirements; therefore I must respectfully decline at this time. I wish you success with your organization and will be happy to reevaluate the opportunity as your membership grows.
Suzanne M. Devoe, Vice President Research

PURPOSE:

Our goal is to negotiate an agreement with a major bank that will accomplish the following:
Establish an intern program at Historic Black Universities, to learn the banking industry and the regulations as expressed under the COMMUNITY RE-INVESTMENT ACT OF 1977 (CRA).
United Affirmative Action Development Corp (UAAD) with the assistance of its affiliates will negotiate agreements under the guidelines of “CRA” to include:
Low interest loans to our members to establish or to improve businesses, homes, automobiles, etc.
Community development loans:
a. Such loans will be made to establish or to improve small businesses with loans up to $50,000
b. These loans will be micro-managed by UAAD to assist our members as “SCORE” assisted SBA loans. Our paid professional staff has the ability to assist in consulting with our clients in order that their business will be successful, and the loans will be paid to the participating bank.
Bank loan committees, consist of members of the community and bank officials. Loans approved by the committee, will more than likely be approved by the bank. These types of community based committees have been in place for several years in various states. We believe these types of committees should include paid members with a bank official participating.
We will negotiate an Affinity Card (credit or debit) for our members at a low interest rate. Those who do not qualify for a credit line will be issued a debit card with minimum deposits.
UAAD will seek its membership among those who have been under-represented by banks, especially those in the African American community, to include others with low and moderate income. The purpose of “CRA” is to benefit these and other individuals and groups.
UAAD’s goals can only be accomplished with our potential members joining together, withdrawing monies from banks that are not properly serving them, investing in our participating bank in order that together we can negotiate the best interest rates for our members. Our aim is to convince the participating bank that our members are a better risk because we are basically borrowing members’ monies. UAAD will also micro-manage loans approved by its committees(s) in order to meet the bank’s requirements of sound business practice as required under ‘CRA”.
Due to previous red-lining by banks in general and minorities’ fear of banks, UAAD will fill a void and create a relationship with the community and participating bank that has never been realized.
Our intent can only be accomplished with a combined effort of many community organizations, civil rights organizations and key individuals in the various communities working in union to accomplish stated goals

DATE: May 22, 1996

TO: Jim Austin

FROM: Aline Creed

RE: Request for Agreements

Jim, I need your help in preparing two agreements. One agreement would be between the bank and an organization that will be referring commercial loan customers to us. We have decided to pay the organization 1% of the principal loan amount up to $5,000 per transaction for business applicants brought to us by the organization and for whom a loan request is granted and closed. I want to be sure the agreement is clear on the following points:

I. We will not pay if the applicant is an existing customer or comes to us directly without introduction by the organization.

II. We will only pay for closed loans, not for applications or approvals not booked. I am concerned about a loan that might pay off immediately, so we may want to say the payment is for the first loan granted, but does not include subsequent extensions or renewals.

III. We also want to be sure the applicant knows the organization’s role in that they are to help prepare the loan proposal and assist the borrower with the process – services for which they will be paid.

The desire for this kind of disclosure to the ultimate borrower and the need to protect the bank regarding financial privacy issues leads to the need for a second agreement. This second agreement would be between the borrower and the organization acknowledging the fee and permitting the sharing of the borrower’s financial information between the bank and the organization. If the organization is to operate as planned, they would be obtaining financials, working up proposals and negotiating with the bank on behalf of the applicant. I want to be sure we are covered for both commercial situations and those that may wind up more consumer oriented, so we can pull a credit bureau, discuss the request, begin valuation of collateral, etc with the organization as well as the applicant. We also want to make sure the applicant knows the organization is not doing him a favor that it is in fact being paid.

We have two or three requests for credit under this arrangement currently in process, so it is important that we get the first agreement worked up relatively soon, preferably in the next two weeks. Please let me know if this is not possible, so I can make arrangement with outside counsel. If you’ve got any questions please call me, Chuck Beard or Nathan Thornton. Thanks for your help.

(UAAD received this fax on 5/25/96 @ 10:57 a.m. from 504-332-7295 Gen Bank Group/Premier Bank Marketing – Compliance)