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Organizing Access To Capital

Organizing Access To Capital: Advocacy And The Democratization

EDITED BY Gregory D. Squires
Copyright Date: 2003
Published by: Temple University Press
Pages: 248
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  • Book Info
    Organizing Access To Capital
    Book Description:

    Community activists were delighted with the passage of the Community Reinvestment Act, but they came to realize that it would take more than the word of law to bring about real change. This book gives voice to the activists who took it upon themselves to agitate for increased investment by financial institutions in their local communities. They tell of their struggles to get banks, mortgage companies and others to rethink their lending policies. Their stories, drawn from experiences in Chicago, New York, Milwaukee, Boston, Pittsburgh, and other cities around the country, offer insight into the way our political/economic system really works.

    eISBN: 978-1-59213-854-8
    Subjects: Political Science, Economics

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. In Memory of Gale Cincotta
    (pp. vii-viii)
  4. Acknowledgments
    (pp. ix-x)
  5. 1 Introduction: The Rough Road to Reinvestment
    (pp. 1-26)
    Gregory D. Squires

    After decades of overt redlining and racially discriminatory lending practices, financial institutions are once again returning to the nation’s cities. Between 1993 and 2000 the share of single-family home-purchase mortgage loans going to low- and moderate-income borrowers increased from 19 percent to 29 percent. The share of loans going to black households increased from 3.8 percent to 6.6 percent, while the Hispanic share increased from 4 percent to 6.9 percent (National Community Reinvestment Coalition 2001a, 9). As Paul S. Grogan and Tony Proscio have observed, “Not only have community-based organizations found it vastly easier to line up financing and equity...

  6. 2 Where the Hell Did Billions of Dollars for Reinvestment Come From?
    (pp. 27-42)
    Joe Mariano

    Cincotta’s words are the most obvious answer to Larry Lindsey and other detractors of organizing on financial and other issues. This chapter refutes him at greater length and documents three financial advocacy victories: the organizing work of the early 1970s that led to creation of the Community Reinvestment Act; a campaign to reduce the number of foreclosures and abandoned buildings that result from the 100 percent guaranteed home loan program run under the auspices of the Federal Housing Administration (FHA) and its parent agency, the Department of Housing and Urban Development (HUD); and passage of city and state laws and...

  7. 3 Giving Back to the Future: Citizen Involvement and Community Stabilization in Milwaukee
    (pp. 43-54)
    William R. Tisdale and Carla J. Wertheim

    Citizen activity in community issues may seem, to some, a remnant of a bygone era replaced now by power brokering, influence peddling, and so on. Yet, as the actions of a civil rights organization in Milwaukee demonstrate, citizen participation continues to be a powerful means for effecting community change.

    This chapter describes an innovative approach by a fair housing organization to engaging citizens in identifying and dismantling obstacles to community development and stabilization in the metropolitan Milwaukee area. The Metropolitan Milwaukee Fair Housing Council (MMFHC) is a private nonprofit organization, established in 1977 by a group of citizens to eliminate...

  8. 4 Taking It to the Courts: Litigation and the Reform of Financial Institutions
    (pp. 55-71)
    John P. Relman

    For many years, lawsuits against lending institutions alleging discrimination on the basis of race or national origin were relatively rare. Most civil rights lawyers did not know how to bring such a claim, and loan applicants turned down for loans had no way of knowing whether they had been victims of illegal discrimination. All of that changed in the early 1990s. Following the pioneering efforts of the Clinton administration’s lending discrimination enforcement program, and with the help of new disclosure laws and increasingly sophisticated software programs that make it easier to track where banks make loans, private civil rights lawyers...

  9. 5 From Living Rooms to Board Rooms: Sustainable Homeownership Deals with Banks and Insurers in Boston
    (pp. 72-84)
    Thomas Callahan

    As Diana Strother went to answer her doorbell one evening in 1988, little did she know that she was about to become involved in one of the largest and ultimately most successful community battles that Boston has seen in the past twenty-five years. Leaving dinner cooking on the stove, she strode down the hallway of her third-floor apartment in one of Boston’s famed triple-deckers. She was tired from her day at Massachusetts General Hospital, where she worked. A single mother of two children, Diana was already juggling a lot. The organizer from the Massachusetts Affordable Housing Alliance (MAHA) said he...

  10. 6 A Citywide Strategy: The Pittsburgh Community Reinvestment Group
    (pp. 85-101)
    Stanley A. Lowe and John T. Metzger

    The Pittsburgh Community Reinvestment Group (PCRG) was formed in 1988 as a multiracial advocacy coalition for Pittsburgh’s neighborhoods. Made up of black and white staff and board members from twenty-seven community organizations, PCRG’s goal is to unify Pittsburgh’s community advocacy groups and establish working relationships and lending partnerships with bankers through the Community Reinvestment Act (CRA). These financial institutions make investments in low- and moderate-income and African American neighborhoods that promote homeownership, housing rehabilitation, historic preservation, commercial district revitalization, and other real estate and business development implemented or endorsed by the community development corporations (CDCs) and neighborhood organizations that join...

  11. 7 Filling the Half-Empty Glass: The Role of Community Advocacy in Redefining the Public Responsibilities of Government-Sponsored Housing Enterprises
    (pp. 102-118)
    Allen J. Fishbein

    Effective advocacy by national community groups is directly responsible for the enactment of affordable housing requirements for three government-sponsored housing enterprises (GSEs). These are the Federal Home Loan Bank system (FHLBs or FHLB system), Fannie Mae, and Freddie Mac. Enacted a decade or more ago, these regulatory requirements are readily embraced today by the GSEs as an integral part of their public purpose. The funding and loans generated by the affordable housing requirements are mostly taken for granted by nonprofit low-income housing practitioners, who have come to regard these resources as indispensable to their work. Yet the origins of these...

  12. 8 Fighting Predatory Lending from the Ground Up: An Issue of Economic Justice
    (pp. 119-134)
    Maude Hurd and Steven Kest

    Two years ago, the Rs qualified for a special low-rate home loan of 5 percent and monthly payments of $746 through ACORN Housing Corporation. They heard about Beneficial through a relative and ended up taking out a second mortgage with them in January 2001. Their house was appraised at $175,000.

    The Rs’ second mortgage was structured as an open-end loan with a credit limit of $35,000 and an initial advance of $36,800, which included an origination fee of $1,840 (plus an annual fee of $50 in subsequent years of the loan). It had a variable rate of the prime rate...

  13. 9 Community Reinvestment in a Globalizing World: To Hold Banks Accountable, from The Bronx to Buenos Aires, Beijing, and Basel
    (pp. 135-153)
    Matthew Lee

    The Community Reinvestment Act, a quarter-century after its relatively quiet enactment by the U.S. Congress, provides a model for the emerging and much needed architecture of global financial regulation. The banking industry is subject to supervision and regulation in every modern state, not only because it is government-insured (in the United States and many other counties), but also because of the government-like function it performs—the creation of money and fueling of development projects, both positive and negative. The question, of course, is “regulation for what,” or, more directly, “for whom”?

    The CRA mandates that banks have a duty to...

  14. 10 Research, Advocacy, and Community Reinvestment
    (pp. 154-168)
    Malcolm Bush and Daniel Immergluck

    The worlds of advocacy and academic research are separate for good and well-known reasons. The time-consuming nature of academic research, and its goal of disinterested inquiry, often makes it of limited use to the legitimate needs of issue advocates for a quick synthesis of information when a political opportunity occurs. Advocacy researchers focus on doing sound, practical research that responds to the current political environment and makes a clear point to policymakers and the interested public.

    Advocates who want to make a long-term difference in the lives of lower-income people have no less need than social scientists for a clear...

  15. 11 The Essential Role of Activism in Community Reinvestment
    (pp. 169-187)
    John Taylor and Josh Silver

    Activism is not passé; it is essential. Without activism, our society becomes less democratic and less just. This is true in many arenas, but especially in the fight for economic justice and equal access to credit and capital.

    In his exhortation to community activities to “grow up,” Lawrence Lindsey ignores the fact that the rich and powerful are extremely effective activists for their causes. While they do not conduct noisy demonstrations, they hire lobbyists who have the ears of influential policymakers at all levels of government. Working-class and minority people cannot afford high-priced lobbyists. They must make their opinions known...

  16. 12 Protest, Progress, and the Politics of Reinvestment
    (pp. 188-220)
    Peter Dreier

    In the late 1980s, a Canadian newspaper journalist who specialized in urban affairs took me on a tour of Toronto’s neighborhoods. We drove through wealthy areas and more run-down sections. I asked him to show me the “worst” neighborhood in Toronto. There was nothing in the entire city comparable to an American slum or ghetto. I asked my tour guide if banks in Canada practiced “redlining.” A sophisticated man with decades of experience analyzing urban policy and politics, this journalist had never heard the word. I explained that redlining was a well-known, although controversial, practice in the United States. He...

  17. 13 Epilogue: Where Do We Go from Here?
    (pp. 221-224)
    Gregory D. Squires

    Organizing and advocacy, of course, are primarily means to various ends. If the basic objective is to increase access to capital on equitable terms to all segments of metropolitan areas, the question remains, what new policies and practices will achieve these ends? The Community Reinvestment Modernization Act of 2001 (H.R. 865), introduced in the first session of the 107th Congress by Representatives Tom Barrett of Milwaukee and Luis Gutierrez of Chicago, provides a fairly detailed outline of policies that would result in appropriate practices.

    This bill was motivated by two basic trends. First are continuing disparities in wealth, home ownership,...

  18. About the Contributors
    (pp. 225-228)
  19. Index
    (pp. 229-238)
  20. Back Matter
    (pp. 239-239)