afisher at calreinvest.or
06-03-2002, 01:14 PM
Attached is a press release regarding a new study of small business lending in California by the California Reinvestment Committee.
Bankers Below Par in Lower Income Neighborhoods
The California Reinvestment Committee (CRC) has just released a report on small business lending by the 32 biggest lenders in California.* CRC asked whether major financial institutions’s small business loans proportionately matched the local businesses located in lower income neighborhoods.* Not one of California’s major small business lenders met this benchmark of equality across Alameda, Fresno, Los Angeles, Sacramento and San Diego Counties.
The most significant findings were:
▸*** Not one of the thirty-two most dominant banks in the state met the equality benchmark either for loans less than $100,000 or to businesses with revenues less than $1 million in those neighborhoods although these 32 banks did 94 percent or more of the lending in each of those counties.* The best lending by even one of the 32 banks, California Bank & Trust, met the benchmark of equality in only three of the five counties.
▸*** Capital One Bank which did 10 percent of all publicly reported small business lending in California (67,330 loans) did the fewest small loans (loans less than $100,000) proportionately in lower income neighborhoods of the 32 dominant financial institutions across the five counties.* In Fresno and Sacramento Counties, its lending was less than half the lending to be expected by the benchmark of equality.
▸*** Four of the major credit card lenders, Bank One, Capital One, First National Bank of Omaha and GE Capital Finance, did no lending to businesses with revenues less than $1 million in those neighborhoods in any of the five counties during 2000 despite making 185,547 business loans in California or more than one-quarter (27.5 percent) of all reported small business lending in California.
▸*** None of the thirty-two dominant lenders made FY 2001 SBA loans to minority-owned businesses in a proportion equal to the proportion of businesses owned by all African Americans, Latinos and Asian Americans
*** "This study highlights the difficultyies that small and minority-owned businesses continue have great accessing credit to expand their businesses.* Since small businesses are the key to opportunity and hope in lower income communities, these barriers puts the lie to the American ideal of equal opportunity," said Alan Fisher, Executive Director of the CRC.* "This is a situation that must be remedied by these major financial institutions and investigated by the U.S. Congress and the federal regulators who are responsible for overseeing these lenders."
*** The California Reinvestment Committee (CRC) has used CRA to promote increased access to credit for affordable housing, community economic development, and consumer services for low-income communities and communities of color for almost a decade. The California Reinvestment Committee is an independent statewide organization of more than 150 nonprofit organizations and public agencies working for community reinvestment, economic revitalization of low income communities, and equal access to lending and services from financial institutions for low income people and people of color.* The CRC has comprehensive community reinvestment agreements with major California banks and savings & loans.
*** For further information, contact: the California Reinvestment Committee, 160 Sansome Street, Seventh Floor, San Francisco, California 94104. *For copies of the report, please contact kalina misi at kmisi@calreinvest.org (kmisi@calreinvest.org)
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Bankers Below Par in Lower Income Neighborhoods
The California Reinvestment Committee (CRC) has just released a report on small business lending by the 32 biggest lenders in California.* CRC asked whether major financial institutions’s small business loans proportionately matched the local businesses located in lower income neighborhoods.* Not one of California’s major small business lenders met this benchmark of equality across Alameda, Fresno, Los Angeles, Sacramento and San Diego Counties.
The most significant findings were:
▸*** Not one of the thirty-two most dominant banks in the state met the equality benchmark either for loans less than $100,000 or to businesses with revenues less than $1 million in those neighborhoods although these 32 banks did 94 percent or more of the lending in each of those counties.* The best lending by even one of the 32 banks, California Bank & Trust, met the benchmark of equality in only three of the five counties.
▸*** Capital One Bank which did 10 percent of all publicly reported small business lending in California (67,330 loans) did the fewest small loans (loans less than $100,000) proportionately in lower income neighborhoods of the 32 dominant financial institutions across the five counties.* In Fresno and Sacramento Counties, its lending was less than half the lending to be expected by the benchmark of equality.
▸*** Four of the major credit card lenders, Bank One, Capital One, First National Bank of Omaha and GE Capital Finance, did no lending to businesses with revenues less than $1 million in those neighborhoods in any of the five counties during 2000 despite making 185,547 business loans in California or more than one-quarter (27.5 percent) of all reported small business lending in California.
▸*** None of the thirty-two dominant lenders made FY 2001 SBA loans to minority-owned businesses in a proportion equal to the proportion of businesses owned by all African Americans, Latinos and Asian Americans
*** "This study highlights the difficultyies that small and minority-owned businesses continue have great accessing credit to expand their businesses.* Since small businesses are the key to opportunity and hope in lower income communities, these barriers puts the lie to the American ideal of equal opportunity," said Alan Fisher, Executive Director of the CRC.* "This is a situation that must be remedied by these major financial institutions and investigated by the U.S. Congress and the federal regulators who are responsible for overseeing these lenders."
*** The California Reinvestment Committee (CRC) has used CRA to promote increased access to credit for affordable housing, community economic development, and consumer services for low-income communities and communities of color for almost a decade. The California Reinvestment Committee is an independent statewide organization of more than 150 nonprofit organizations and public agencies working for community reinvestment, economic revitalization of low income communities, and equal access to lending and services from financial institutions for low income people and people of color.* The CRC has comprehensive community reinvestment agreements with major California banks and savings & loans.
*** For further information, contact: the California Reinvestment Committee, 160 Sansome Street, Seventh Floor, San Francisco, California 94104. *For copies of the report, please contact kalina misi at kmisi@calreinvest.org (kmisi@calreinvest.org)
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