Black//mike1st/mark2nd
By JENNIFER NETHERBY
Staff Reporter
Spurred in part by a need to meet huge inner-city investment commitments, financial institutions are turning out in record numbers to support this year’s L.A. Black Business Expo.
Among the sponsors of the event, taking place Sept. 10-12 at the L.A. Convention Center, are 16 financial institutions the largest number ever.
Many of those companies including Wells Fargo Bank, Washington Mutual Inc., and Bank of America are required to make huge inner-city investments under the federal Community Reinvestment Act.
The CRA requirements are a condition of federal approvals of a wave of mega-mergers that swept the banking industry.
Mainstream financial institutions still maintain a very small presence in inner-city neighborhoods. So the expo, where many of the estimated 70,000 attendees will be inner-city business owners, provides institutions with a low-cost way of identifying possible investments that can be counted toward meeting CRA commitments.
“Without a doubt, (the CRA) is the reason a number of banks sign on,” said Dean Jones, general manager of the expo. “They are there to do outreach activity. Drive down Western or Crenshaw, you don’t see many banks.”
But the expo, held annually since 1989, provides those bigger banks with an efficient way to meet with business people they are required to fund through the CRA, Jones said.
Since 1993, banks have pumped more than $1 trillion into poorer communities nationwide, in the form of home mortgage and small-business loans, to comply with the CRA.
Bank of America announced a $500 million inner-city investment program earlier this year, a small part of the $350 billion that BofA has promised to invest in poor communities as a condition of its merger with NationsBank. Wells Fargo has launched a 12-year program aimed at investing $1 billion in black-owned businesses over the next 12 years. Washington Mutual said it will issue $25 billion in small-business loans and home mortgages for low- to moderate-income applicants over the next decade.
“That’s our way of doing it, participating in community events,” said Herald Hutchison, Washington Mutual vice president and community reinvestment manager. “It’s easier to reach people. We participate in homebuyer fairs, fund non-profit organizations, participate in neighborhood consumer credit counseling fairs.”
Brenda Ross-Dulan, Wells Fargo vice president of corporate community development, said the bank originally got involved in the expo to meet its CRA requirements, but it now recognizes that the event makes good business sense.
“Minority businesses are growing,” said Ross-Dulan. “It’s not just of community significance anymore, it’s become a business significance.”
Lynn Joy Rogers, director of the Ron Brown Center at the L.A. Urban League, said that while banks haven’t had a great record of getting involved in the past with the rougher parts of Los Angeles, she hopes they are waking up to other opportunities in the inner city.
“Sure, CRA contributes,” she said. “But I hope (banks) look beyond that so they don’t look at the CRA as being tedious and only view it as something they have to meet.”
