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Justice Dept settlement with Countrywide yields $2,000 per household

"The Department of Justice only sought less than $2,000 per household in the largest residential fair lending settlement in history to resolve allegations that Countrywide Financial Corporation and its subsidiaries engaged in a widespread pattern or practice of discrimination against qualified African-American and Hispanic borrowers in their mortgage lending from 2004 through 2008.

The settlement provides $335 million in compensation for victims of Countrywide’s discrimination during a period when Countrywide originated millions of residential mortgage loans as one of the nation’s largest single-family mortgage lenders. The settlement would provide an average of $1,675 if each eligible borrower received compensation.

According to the Joint Center for Political Studies, 'In 2006, more than one-half (52.9 percent) of African Americans and nearly half of Hispanics (47.3 percent) who acquired home-purchase loans had subprime loans.'"

For more information, see: http://www.j…

Obama Administration releases Diversity Plan

The plan seeks to implement Executive Order 13583 establishing a coordinated, government-wide initiative to promote diversity within the Federal government. The Executive order "directs departments and agencies to develop and implement a more comprehensive focus on diversity." The Plan focuses on:

Workforce Diversity
Workplace Inclusion
Sustainability
Much of the initiative is concerned with metrics, that is, developing and collecting appropriate statistics to measure diversity and how well the Government is meeting it's goal to become more so. Another focal point appears to be outreach. Other key steps include leadership development and mentoring.
These are all tried and true methods. While there is nothing earth shattering in the Report and Plan, we find it a welcome alternative to the eight years that the previous Administration spent talking about diversity without ever once offering a plan for the Federal Government to become more so. See: http://www.opm.gov/diversityand…

Occupy and Small Business

Support for movement now can mean more business later

By William Michael Cunningham, Published in the Washington Post on November 12

I have been attending the Occupy K Street protest. In fact, I have put to use my skills running an investment firm, holding a teach-in at the site on the causes of and cures for the financial crisis.

In my time there, I spoke with protesters, sympathizers and opponents. I learned a lot about the movement, much of which was, to me, surprising. Some of these lessons may be of interest to businesses in the area.

Regardless of your political views, I think small business people should embrace the protests. I know this is difficult — small business people tend to be conservative and tend to vote Republican. But to the extent that income disparity eases, more people will have money. With more money, more people will be able to buy goods and services from
small businesses.

And considering the number of small businesses that have failed since the start of the financia…

Bank Transfer Day - November 5, 2011

According to one site on the internet (must be logged into Facebook to follow this link):

"Together we can ensure that these banking institutions will ALWAYS remember the 5th of November!! If the 99% removes our funds from the major banking institutions to non-profit credit unions on or by this date, we will send a clear message to the 1% that conscious consumers won't support companies with unethical business practices.

• Research your local credit union options
• Open an account with the one that best suits your needs
• Cancel all automatic withdrawals & deposits
• Transfer your funds to the new account
• Follow your bank's procedures to close your account before 11/05


FIND A CREDIT UNION
USA: http://www.findacreditunion.com/
CANADA: http://locator.cucentral.com/
UK: http://www.findyourcreditunion.co.uk/"

We think this is an interesting idea. If there is a free market for the provision of financial services, then this should be a welcomed initiative. If consumers are …

More on the Wall Street Protests

Why are the Wall Street Protesters upset?

They are:Upset that 20% of the country's wealth has been destroyed and not a single person has been convicted, much less indicted.Upset that Wall Street has iron control over the country’s economic policies and that both parties are wholly owned subsidiaries.Upset that 24 million people cannot find a full time job, that 50 million cannot afford to see a doctor when they are sick, that 47 million need the government’s help to feed themselves. They are upset that 15 million families owe more on their home than it is worth. (Alan Grayson, Former Member of Congress.)

Bank Nurtures Asian Roots

BY MATTHIAS RIEKE. OCTOBER 10, 2011 The Wall Street Journal.
By focusing on select customers, East West Bancorp is showing it can grow at a time when many banks are struggling to find a firm footing. East West, based in Pasadena, Calif., pays close attention to Asia. It seeks Chinese-American clients and attracts U.S. companies that do business in China. It also finances Chinese companies' expansion in the U.S. through trade finance and commercial loans. East West has "been smart enough to link to demographics in their ancestral homeland," said William Michael Cunningham, the owner of Creative Investment Research Inc., an advisory firm in Washington with a focus on minority ...See full article: http://online.wsj.com/article/SB10001424052970204450804576620881021962152.html

Commentary: Pen stroke could help ease black unemployment

From the Washington Post: http://www.washingtonpost.com/business/capitalbusiness/commentary-new-rule-could-help-ease-black-unemployment/2011/09/07/gIQA8XoqKK_story.html
President Obama unveiled some ambitious ideas last week to create jobs, a plan that may have little chance of becoming reality any time soon given the $447 billion price tag and the current animus between the president and Congress. But about four weeks ago, Obama signed a little-publicized executive order that may go far in addressing a crisis exacerbated by the economic downturn: the rising unemployment rate and the diminishing wealth of African Americans.On Aug. 18, the White House issued an executive order “to promote the federal workplace as a model of equal opportunity, diversity and inclusion.” This follows on the heels of Section 342 of the Dodd-Frank financial reform law, which created offices to monitor and encourage efforts by federal financial agencies such as the Treasury Department and the …

Unemployment in Black and White

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We created the chart at left showing black versus white unemployment in August, 2011. Black unemployment was reported at 16.7%, higher than the 16.2% rate reported in August 2010. Black unemployment was 15.5% in July, 2011. White unemployment fell to 8% in August from 8.1% in July, 2011. Further, white unemployment was 8.7% in August, 2010.
I think this puts the recession into clear perspective. While some (the Tea Party in particular) have done a lot of whining, they are in no way, shape or form bearing the brunt of this recession.

Executive Order--Establishing a Coordinated Government-wide Initiative to Promote Diversity and Inclusion in the Federal Workforce

The White HouseOffice of the Press SecretaryFor Immediate Release August 18, 2011 Executive Order--Establishing a Coordinated Government-wide Initiative to Promote Diversity and Inclusion in the Federal WorkforceEXECUTIVE ORDERESTABLISHING A COORDINATED GOVERNMENT-WIDE INITIATIVE TO PROMOTE DIVERSITY AND INCLUSION IN THE FEDERAL WORKFORCEBy the authority vested in me as President by the Constitution and the laws of the United States of America, and in order to promote the Federal workplace as a model of equal opportunity, diversity, and inclusion, it is hereby ordered as follows:Section 1. Policy. Our Nation derives strength from the diversity of its population and from its commitment to equal opportunity for all. We are at our best when we draw on the talents of all parts of our society, and our greatest accomplishments are achieved when diverse perspectives are brought to bear to overcome our greatest challenges.A commitment to equal opportunity, diversity, and inclus…

Economics as science: what went wrong

Unfortunately, economics as a "science" has no answer for the questions we face now.
As one person noted, "The power of a..theory may be measured as a ratio: the number of facts that it explains divided by the number and type of assumptions it needs to postulate in order to do the explaining. A theory that assumes most of what it is trying to explain is a bad theory."
That is why most economic theory is bad theory.

President Drops by Community Leaders Briefing

We noted our attendance at one of the White House Community Leader Briefings: "This summer, the White House Office of Public Engagement is hosting Community Leaders Briefings. These events, held weekly at the White House, bring together leaders and activists from communities all across the country for an opportunity to discuss common challenges and learn how the government can help them as they work to improve their neighborhoods."

To add to the impact of these events, today the President stopped by the meeting to discuss what his Administration is doing and why they have sponsored these meetings. See the video here:

Why Does the Fed Have So Little Supplier Diversity?

Interview on DiversityInc.com website by Barbara Frankel on Jul 12, 2011 concerning our FOIA request:

We submitted a FOIA to the Fed, a Freedom of Information Act request, a formal request of a federal government agency for information. We asked for information on "minority" business contracting. How much money did the Fed spend with women firms (WBEs), minority firms (MBEs) and others? We were really looking for information on their spending patterns or their support of minority-owned banks. We were basically trying to (expand and) complete the data set concerning their support for foreign banks, foreign corporations, domestic corporations..related to the financial crisis.

What we found was that the Fed has not spent a lot of money with women- and minority-owned firms. In response to our Freedom of Information Act request, the Federal Reserve Board provided data on contract awards for the year 2010, broken out by ethnic and by gender designations. We found that, for example, …

New Law Helps Minority and Women Contractors Land Big Deals

New Law Helps Minority and Women Contractors Land Big Deals.

President Obama signs bill that gives our financial services firms a seat at the table. But is it enough?

See: http://www.blackenterprise.com/2011/07/06/new-law-helps-minority-and-women-contractors-land-big-deals/

Carver Federal Raises $55 million

In a stunning development, Carver Federal today revealed they have raised $55 million in new equity capital. This amount exceeds, by almost three times, "regulatory capital requirements set by the Office of Thrift Supervision (OTS)."

According to the bank, investors include:

The Goldman Sachs Group, Inc., $15 million.
Morgan Stanley, $15 million.
Citigroup Inc., $10 million.
The Prudential Insurance Company of America, $10 million.
American Express Company, $2 million.
First Republic Bank, $2 million.
National Community Investment Fund, $1 million.

Prudential and American Express (full disclosure: former clients) have a 20 year track record of making these types of investments. National Community Investment Fund is a Creative Investment clone, and a bad one at that (we started seven years before they did.)

Which brings us to Goldman, who today "notified the New York State Department of Labor that the investment bank (might) lay off 230 employees." We'll see if they act…

Family Properties: Race, Real Estate and the Exploitation of Black Urban America

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We attended a conference titled "Diversity in Financial Services: The Impact of Dodd-Frank" held from June 22-24, 2011 at the Westin Arlington Gateway, Arlington, VA. We opened the conference by speaking on a panel covering Dodd/Frank Section 342. Moderating the panel was Mikail Moore, Chief of Staff, Congresswoman Maxine Waters, US House of Representatives. Other panelists were Darlene R. Slaughter, Vice President, Chief Diversity Officer, Fannie Mae and Leslie R. Crawford, Deputy Director, Federal Deposit Insurance Corporation.The speaker at General Session IV wasBeryl Satter, author of Family Properties: Race, Real Estate, and the Exploitation of Black Urban America. She discussed the current state of the mortgage markets and placed recent history in context. Her book is perhaps the best exploration of race and the urban real estate market.This is a rare and powerful book which combines socioeconomic trends, the history of the civil rights movement and detailed family his…

White House Community Leaders Briefing

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We were fortunate to be invited to today's Community Leaders Briefing at the White House. I found the event informative.
We got a chance to hear from top Administration officials. Among those addressing the meeting were Carl Shapiro, Member, Council of Economic Advisers, Greg Nelson, Deputy Director, White House Office of Public Engagement, Michael Blake, Associate Director, White House Office of Public Engagement, Stephanie Cutter, Assistant to the President and Deputy Senior Adviser, and William Daley, Assistant to the President and Chief of Staff.
Mr. Shapiro described the Administrations' current economic viewpoint and forecast. He cited the deficit, the crisis in Greece and oil prices as challenges. Administration economists are focused on staying engaged and optimistic. They also described several initiatives and facts: the world's largest photovoltaic plant and the world's largest wind farm are both in the US. (I thought they were in China.)
Mr. Daley spoke about …

Technology Commercialization Showcase for Women & Minorities - Yuxi Song, Xiaoxiao Yin, CIR 2011 Interns

We attended the Technology Commercialization Showcase for Women & Minorities this morning, June 8, 2011, at the University of Maryland, College Park.
The event was sponsored by IWIF: "IWIF Workers’ Compensation Insurance has specialized in providing workers’ compensation insurance to Maryland businesses since 1914." IWIF opened the Showcase with a brief introduction about itself and its core business.
Dr. Robert L. Wallace delivered a 30-minute lecture on utilizing strategic partnerships for commercialization success in technology and outlined 12 steps to building a good partnership:
1. Building trust 2. Get your "mogo" working ( mogo means: mission, objectives, goals, opportunity); 3. Maximize client pain IQ; 4. Know thyself ( limitation, strength and value); 5. Know thy partner; 6. 360 review; 7. Embracing the boulder; 8. Determine the alpha project; 9. Remaining independent; 10. Embracing the porcupine; 11. Joint venture continuum; 12. Transition strategies.
Dr. Wallace …

Commentary: New law a boon for women- and minority-owned firms

From the Washington Post:"This may be the best time in recent memory to be a minority- or woman-owned contractor seeking to do business with the federal government." (Actually, I think I would dial that back a little. With concern over government spending growing, it looks like women and minority firms may be getting to the party just as the food and beverages are running out...unless they are defense contractors.)"A recent article in Capital Business [“Federal Reserve Bank seeks diversity in contractor pool,” May 16] discussed efforts by the Federal Reserve Bank of Richmond to increase contracting with women- and minority-owned firms. This effort is far broader and more significant than the article indicated, however.Section 342 of the recently enacted Dodd-Frank Act requires nearly 30 agencies that oversee the financial system, including the Federal Reserve, the Treasury Department and the Federal Deposit Insurance Corp., to establish offices of minority and women inc…

40th Anniversary of the Birth of Corporate Social Responsibility (CSR)

May 18, 2011 – Reverend Leon H. Sullivan, a Baptist minister, African American civil rights leader and economic justice leader/activist joined the Board of Directors of the General Motors Corporation (GM) on March 1, 1971, and was the first African American to hold a Directors seat on a major U.S. Corporate Board.

May 21, 1971 marks the date of the first stockholder's meeting attended by Reverend Sullivan. At that meeting, he challenged GM to leave South Africa until apartheid ended. This set the stage for the integration of U.S. Corporate Boards and for the development of corporate social responsibility (CSR).

Reverend Sullivan “was best known for creating the Sullivan Principles, a set of ethical guidelines later signed by officials from more than 125 US corporations working in South Africa." The principles were one of the first benchmarks used for corporate social responsibility (CSR), and are a methodology still in use today.

His work “illustrates the most fully developed in…

One Black owned Bank that isn't going out of business

According to recent news reports, "North Milwaukee State Bank.. recently commemorated a milestone of providing service to the community for over 40 years."
North Milwaukee State Bank ( now NMSBank ) celebrated "over 40 years of service to the community by hosting a 40 Plus Year Celebration..at the Milwaukee County War Memorial on April 14, 2011. The bank opened its doors on February 12, 1971, becoming Wisconsin’s first minority-owned bank.NMSBank co-founder Dr. William Finlayson states 'I never had any hesitation in opening the bank because I was motivated to bring economic empowerment to the community. People questioned the impact a minority bank would have on the community, but the biggest immediate impact was the sense of pride it gave the community.'
NMSBank co-founder Dr. Randle Pollard credits the success of opening NMSBank to the rapid exit of larger banks from the community, the civil rights movement, and a rush of college graduates who majored in accounti…

Standard & Poor's cut its credit outlook on the US to negative

On Monday, April 18th, Standard and Poors, a Nationally Recognized Statistical Rating Organization (NRSRO), or credit rating agency, cut its credit outlook for the US to negative. We believe this rating opinion unwarranted and inaccurate. To understand why, one must look at credit rating agencies in general, their competence (specifically, their performance prior to the recent financial crisis), and current AAA rated countries.
Lets take that last item first. Here is the list of countries currently rated AAA by S&P: Australia AustriaCanadaDenmarkFinlandFranceGermanyGuernseyHong KongIsle of ManLiechtensteinNetherlands New ZealandSingaporeSwedenUnited KingdomUnited States of AmericaWe find it difficult to believe that the Isle of Man and Liechtenstein, countries whose main export appears to be laundered money, will be better future credit risks than the United States of America.
Let's next review what a credit rating agency is, what it does and how it makes money. According to one…

Legendary Carver Savings Bank Fights To Stay in Business

"Carver Federal Savings Bank, the financial institution currently holding the top spot on the BE BANKS list, is fighting for its future. The nation's largest black-owned bank must significantly boost capital reserves by month's end or risk a potential shutdown, takeover or sale of the bank.William Michael Cunningham, social investing adviser atCreative Investment Research Inc., a Washington D.C. firm specializing in minority banking, estimates that Carver Bancorp Inc.,parent of the Harlem-based bank, must raise nearly $20 million in new capital by April 30, 2011, to meet orders by the Office of Thrift Supervision, the primary regulator of all federal and a number of state-charteredsavings banks."Full article at: http://www.blackenterprise.com/2011/04/12/legendary-carver-savings-bank-fights-to-stay-in-business/

"A few last items about Carver Federal"

According to a new article in Crain's NY Business: "1. Before the financial crisis, there were 36 banks that had been founded and run by African-Americans, according to Creative Investment Research in Washington. There are now 25."
The article goes on to state that:
"The reason: Most of these banks are small and lack the base of capital needed to absorb real estate-related losses clobbering small banks everywhere. Because there are so many small, ailing banks, it's all the harder for minority-owned banks to raise new capital. The competition for new capital is incredibly fierce."
While we think the articles published by Crain's on Carver have been very good, we actually disagree with this reasoning. The answer is far simpler: racial discrimination and greed. (See: http://twisri.blogspot.com/2008/11/what-we-said.html)
See the full article at: http://mycrains.crainsnewyork.com/in_the_markets/2011/04/a-few-last-items-about-carver-federal.php

On Carver Federal Savings Bank (Harlem, NY)

From Crain's NY Business:
"The parent of Carver Federal Savings Bank holds its annual stockholders meeting April 4 at The Studio Museum in Harlem, near the bank's 125th Street headquarters. It could be the last.Time may be running out for Carver, the nation's largest bank founded and run by African-Americans and an integral part of the city for 63 years. Staggering under a load of delinquent real estate loans, the bank is under orders from the U.S. Office of Thrift Supervision to raise $20 million in fresh capital by the end of this month. That's a steep climb for a bank that at best posts annual profits of $5 million. Yet if Carver can't raise the cash, regulators can either seize the institution and sell it to another bank, or dissolve it.Longtime Chief Executive Deborah Wright has pulled Carver back from the brink before and has many high-level business and political connections who could help the bank get the needed funds.But backers would be buying into an…

Jury Hits Wells Fargo With $3.5 Million Lending Discrimination Class Action Verdict

Mar 23, 2011. According to recent news reports, "After a three-month trial, a Los Angeles Superior Court jury returned a $3,520,000 lending discrimination verdict today against Wells Fargo Bank. (Opal Jones, et. al v. Wells Fargo Bank, N.A., Wells Fargo Home Mortgage, et. al Los Angeles Superior Court, Case No. BC337821)

The class action lawsuit alleged the bank consistently and knowingly discriminated against borrowers in minority neighborhoods, resulting in these borrowers paying more for their loans than borrowers in non-minority areas of Los Angeles County. The jury found that the race, color, ancestry and/or national origin of the plaintiffs and the class they represent was a 'motivating reason' for Wells Fargo’s conduct."

$136 million in new contract opportunities for women and minority firms.

Section 342 of the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act contains a provision creating an Office of Minority and Women Inclusion (OMWI) at various agencies to monitor the diversity efforts of the agencies, the regulated entities and agency contractors. We estimate potential new contract opportunities for women and minority firms at $136 million. In response to demand, we are hosting a Webinar on Dodd/Frank Act Section 342.
The session will be held on Wednesday March 30, 2011 at 2pm (EST) and will cost $199.00. Our Section 342 Webinar will review all relevant information, including Office of Minority and Women Inclusion (OMWI) office addresses and contact data.
To register for the Webinar, please click here.

White House Policy Briefing on Jobs

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On Friday, February 25th, we attended the White House Policy Briefing on Jobs and the Economic Future in Communities of Color sponsored by Michael Blake in the Office of Public Engagement. The meeting was held at the Eisenhower Building. Speaking were:

1. Don Graves, Jr., Community Development and Housing Policy, Treasury. Mr. Graves discussed the Small Business Lending Fund and noted that 300 banks have applied for funding. Mr Graves is also Executive Director, Presidents's Council on Jobs and Competitiveness, which held it's first meeting on Thursday.
2. Michael Strautmanis, Senior Advisor to Valerie Jarrett.
3. Marie Johns, Deputy Administrator, SBA. Ms. Johns described plans for the Impact Fund: "SBA will commit $1 billion to those funds that invest growth capital in companies located in underserved communities. This includes investing in economically distressed areas, as well as those companies in emerging sectors such as clean energy. SBA will provide up to a 2:1 match…

Rolling Stone asks "Why Isn't Wall Street in Jail?"

Rolling Stone Magazine notes:
"Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley — has ever been convicted. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What's more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even 'one dollar' just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick "The Gorilla" Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars."
A few …