The Next Chapter for George Bailey

[Community Development Banking List]

Original message from: gmorishige@comcast.net


"The Next Chapter for George Bailey"


Around this time of the year, I like to think about the lessons about banking, finance, and life in general in the holiday film classic, "It's a Wonderful Life." In this Frank Capra classic, the film follows the life of George Bailey, as played by Jimmy Stewart, during the highs and lows of Bedford Falls, along with the highs and lows in his own life. For this small community, the Building & Loan serves as a vital source of financial services and credit, helping its customers during periods of war and economic depression. While the Bailey Building & Loan is fictional, it represents the mission of financial institutions around the world. If you haven't seen this film, please stop reading and go buy, rent, or download this classic movie.


It's the day after Christmas, 1946. Two nights earlier, the people of Bedford Falls filled the Bailey household, opening their hearts and pocketbooks to bail out George Bailey, while singing "Hark the Herald Angels Sing." On Christmas Day, George hugged his family just a bit tighter as they celebrated the holiday. But today, it's back to work at the Building & Loan.


As George made his way to the front door, the bank examiner and newspaper reporters were already there. The bank examiner drove all the way back from Elmira early in the morning to continue his review of the Building & Loan's books. Uncle Billy eventually remembered where he left the money, which resulted in the government's prosecution of Mr. Potter for grand larceny. Even though the $8,000 was recovered, the investigation exposed the Building & Loan's cash management and liquidity issues, ultimately resulting in the Board's ouster of the eccentric Uncle Billy. In the months that followed, more information about the Building & Loan's troubles were publicized in the newspapers. Despite the rally of support, there were questions about whether Sam Wainwright's wire plus the funds raised in the Bailey household were enough.


Then, on one day in August 1947, the Building & Loan was no more. For the last time, George Bailey stood at the doorway of the Building & Loan, his tall, dimly-lit figure casting a shadow into the office once filled with customers. In a box, he carries only a handful of things, such as his father's portrait and a sign bearing "All you take with you is that which you've given away." George wondered what he accomplished, now that the Building & Loan was no more. As Clarence had taught him once before, he knew he helped many customers and affected so many lives, but this sad moment still tested his faith. While George reflected on what he could have done differently, he indulged in a moment to recall his many happy memories. His smile fell as he tossed the daily newspaper into the box, the feature story of which was about the Building & Loan. Its headline was cold: "Small Enough to Fail."

Just as George was about to leave, the phone rings with Sam Wainwright on the other end of the line. Sam brushes through his condolences about the Building & Loan and quickly gets to his own agenda. With the end of World War II, Sam's enterprises secured a number of contracts for early rebuilding efforts in Europe and Japan. He asks George if he'd be willing to travel overseas and manage a couple of projects. Stunned by the opportunity, George stammers, "would I ...?" Sam notes that the whole family is welcome to travel with him and see the world. George hangs up with a smile restored, finally able to experience the adventures he dreamed of as a child. He closes the door to the Building & Loan for the last time, turning the page to his next adventure in life.


Once of one of the best known community development financial institutions in the world, ShoreBank failed in August of this year. For many ShoreBank supporters, we watched the news reports earlier this year as the bank fell into distress and closure. For myself as a ShoreBank alum, I was heartbroken. The institution was reincarnated, recapitalized, and renamed to continue its mission, though under new leadership as Urban Partnership Bank. I'm looking forward to hearing more about the new organization in 2011 and beyond.

Despite these challenging economic times, many financial institutions big and small continue to thrive, focusing on the financial service needs of households and businesses. While ShoreBank's failure is unfortunate, it would also be unfortunate to simply dismiss the failure as purely an anomaly and move on. Some have already been written, like The Economist's "Small Enough to Fail" (http://www.economist.com/node/16891993) and ShoreBank alum David Oser's presentation to Roosevelt University (http://shorebank.typepad.com/the_oser_view/2010/09/) . Similarly, I hope that ShoreBank's successes will also continue to shine. Hopefully, ShoreBank's legacy can provide insight for other financial institutions, as well as continue to address the financial needs of their customers.

To all of the George Baileys in the world, best wishes for happy holidays and a prosperous 2011.

[Community Development Banking List]

Original message from: jsilver@ncrc.org

Dear Colleagues:

I always appreciate George's "It's a Wonderful Life" postings.

I saw two thirds of it last night. One important element that is often overlooked is the role of women. Mary, George's wife, saves the day when she organizes the town to raise the $8,000 that Uncle Billy misplaced and that Potter stole. While George had lost it, and was contemplating suicide and running around with Clarence Oddbody, Mary quietly raised the money somehow with five kids in tow.

Mary's sweat equity and rehabbing the Bailey house while raising the kids is also rather remarkable. Mary's quiet courage, generousity, and warmth held the Bailey family together.

The lessons of peer lending, portfolio lending, and community are also priceless in the age of financial disaster. Potter was not a pioneer of securitization so much as just plain old monopoly capitalism and infectious greed.

To all, and to the women who hold our communities together, happy holidays.

Yours in struggle,

Josh Silver
National Community Reinvestment Coalition

____________
NCRC


Josh Silver
Vice President of Research & Policy

National Community Reinvestment Coalition (NCRC)
727 15th Street, NW, Suite 900 | Washington, DC 20005
TEL202) 464-2708 | FAX202) 628-9800 | www.ncrc.org

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From: bounce-7605932-4989749@list.cornell.edu on behalf of gmorishige@comcast.net
Sent: Fri 12/24/2010 2:37 AM
To: communitydevelopmentbanking-l@cornell.edu
Subject: The Next Chapter for George Bailey


"The Next Chapter for George Bailey"

Around this time of the year, I like to think about the lessons about banking, finance, and life in general in the holiday film classic, "It's a Wonderful Life." In this Frank Capra classic, the film follows the life of George Bailey, as played by Jimmy Stewart, during the highs and lows of Bedford Falls, along with the highs and lows in his own life. For this small community, the Building & Loan serves as a vital source of financial services and credit, helping its customers during periods of war and economic depression. While the Bailey Building & Loan is fictional, it represents the mission of financial institutions around the world. If you haven't seen this film, please stop reading and go buy, rent, or download this classic movie.

It's the day after Christmas, 1946. Two nights earlier, the people of Bedford Falls filled the Bailey household, opening their hearts and pocketbooks to bail out George Bailey, while singing "Hark the Herald Angels Sing." On Christmas Day, George hugged his family just a bit tighter as they celebrated the holiday. But today, it's back to work at the Building & Loan.

As George made his way to the front door, the bank examiner and newspaper reporters were already there. The bank examiner drove all the way back from Elmira early in the morning to continue his review of the Building & Loan's books. Uncle Billy eventually remembered where he left the money, which resulted in the government's prosecution of Mr. Potter for grand larceny. Even though the $8,000 was recovered, the investigation exposed the Building & Loan's cash management and liquidity issues, ultimately resulting in the Board's ouster of the eccentric Uncle Billy. In the months that followed, more information about the Building & Loan's troubles were publicized in the newspapers. Despite the rally of support, there were questions about whether Sam Wainwright's wire plus the funds raised in the Bailey household were enough.

Then, on one day in August 1947, the Building & Loan was no more. For the last time, George Bailey stood at the doorway of the Building & Loan, his tall, dimly-lit figure casting a shadow into the office once filled with customers. In a box, he carries only a handful of things, such as his father's portrait and a sign bearing "All you take with you is that which you've given away." George wondered what he accomplished, now that the Building & Loan was no more. As Clarence had taught him once before, he knew he helped many customers and affected so many lives, but this sad moment still tested his faith. While George reflected on what he could have done differently, he indulged in a moment to recall his many happy memories. His smile fell as he tossed the daily newspaper into the box, the feature story of which was about the Building & Loan. Its headline was cold: "Small Enough to Fail."

Just as George was about to leave, the phone rings with Sam Wainwright on the other end of the line. Sam brushes through his condolences about the Building & Loan and quickly gets to his own agenda. With the end of World War II, Sam's enterprises secured a number of contracts for early rebuilding efforts in Europe and Japan. He asks George if he'd be willing to travel overseas and manage a couple of projects. Stunned by the opportunity, George stammers, "would I ...?" Sam notes that the whole family is welcome to travel with him and see the world. George hangs up with a smile restored, finally able to experience the adventures he dreamed of as a child. He closes the door to the Building & Loan for the last time, turning the page to his next adventure in life.

Once of one of the best known community development financial institutions in the world, ShoreBank failed in August of this year. For many ShoreBank supporters, we watched the news reports earlier this year as the bank fell into distress and closure. For myself as a ShoreBank alum, I was heartbroken. The institution was reincarnated, recapitalized, and renamed to continue its mission, though under new leadership as Urban Partnership Bank. I'm looking forward to hearing more about the new organization in 2011 and beyond.

Despite these challenging economic times, many financial institutions big and small continue to thrive, focusing on the financial service needs of households and businesses. While ShoreBank's failure is unfortunate, it would also be unfortunate to simply dismiss the failure as purely an anomaly and move on. Some have already been written, like The Economist's "Small Enough to Fail" (http://www.economist.com/node/16891993) and ShoreBank alum David Oser's presentation to Roosevelt University (http://shorebank.typepad.com/the_oser_view/2010/09/). Similarly, I hope that ShoreBank's successes will also continue to shine. Hopefully, ShoreBank's legacy can provide insight for other financial institutions, as well as continue to address the financial needs of their customers.

To all of the George Baileys in the world, best wishes for happy holidays and a prosperous 2011.

CDB list instructions http://www.runonthebank.net/cdblist.htm

[Community Development Banking List]

Original message from: Bill@RunontheBank.net

Thank you Greg Morishige for your continuing thoughtful exploration
of "It's a Wonderful Life" with a eulogy and reminiscence of Shorebank.

I wasn't there, so rather than a memorial service, how about a post
mortem? Yes, Shorebank provided service and assistance, but what is
the enduring legacy? Were the effort and subsidy dollars well
spent? What were the lessons for the field, both successes and how
to avoid similar failures?

As CEO at a CDFI, here's what Shorebank taught me:
Foundation funding can pass as core equity.
Government funding can be released to financial institutions
to serve public purposes, eg. CDFI Fund.
Audiences that aren't part of mission can respond to CDFI
marketing, that is, SRI marketing (development deposits and eco deposits).
There is money in teaching and researching CDFIs.

I can think of only one retail product from Shorebank that ever
seemed interesting enough to try to copy, the ma/pa landlord lending system.

What is cautionary in Shorebank's history?
No one is immune from failure. No business, no culture, no planet.
Markets change, innovation spreads. No business can sit back.
Saying "Mission" three times and clicking your heels isn't real magic.
Board members must be critical of management.

In the meantime, the CDFI field was full of innovation
New savings structures, including Individual development
accounts, reverse tier savings and prized based savings
Youth services including financial literacy and youth-run branches
Small dollar loans as an alternative to high cost payday lending
Program Partnerships with non-profits
Tax time asset building strategies
Micro enterprise lending and services

What do you count among the enduring CDFI innovations in the financial markets?

Bill Myers
Interim CEO
Santa Cruz Community Credit Union
direct: 831-460-2344
email: Bill.Myers@scruzccu.org


At 11:37 PM 12/23/2010, you wrote:
"The Next Chapter for George Bailey"

Around this time of the year, I like to think about the lessons
about banking, finance, and life in general in the holiday film
classic, "It's a Wonderful Life." ...
Once of one of the best known community development financial
institutions in the world, ShoreBank failed in August of this year.
For many ShoreBank supporters, we watched the news reports earlier
this year as the bank fell into distress and closure. For myself as
a ShoreBank alum, I was heartbroken. The institution was
reincarnated, recapitalized, and renamed to continue its mission,
though under new leadership as Urban Partnership Bank. I'm looking
forward to hearing more about the new organization in 2011 and beyond.

Despite these challenging economic times, many financial
institutions big and small continue to thrive, focusing on the
financial service needs of households and businesses. While
ShoreBank's failure is unfortunate, it would also be unfortunate to
simply dismiss the failure as purely an anomaly and move on. Some
have already been written, like The Economist's "Small Enough to
Fail" (http://www.economist.com/node/16891993) and ShoreBank alum
David Oser's presentation to Roosevelt University
(http://shorebank.typepad.com/the_oser_view/2010/09/). Similarly, I
hope that ShoreBank's successes will also continue to shine.
Hopefully, ShoreBank's legacy can provide insight for other
financial institutions, as well as continue to address the financial
needs of their customers.

To all of the George Baileys in the world, best wishes for happy
holidays and a prosperous 2011.

[Community Development Banking List]

Original message from: sjohnston@tdfsf.org

Thanks again Greg, and also to Bill Myer and Josh Silver for their comments. For a brief time I was privileged to work with Shorebank’s consulting arm, which is how I got to know some really great people like Greg and his wife, both of whom were among the best, and as Josh has pointed out, women, from Mary through a terrific cadre of other women at Shorebank, have played an extremely key role in what I believe is a legacy of success in the people and institutions that grew from the Shorebank example. I especially appreciate Greg’s pointing us to the David Oser article. As a former banker and CDFI CEO, I did know about leveraging wholesale deposits into an investment portfolio. What I didn’t know, was the story about taking deposits from orders of Nuns which begat the socially responsible investing movement as we know it today. Again, women at the core of both the ask and the investment.



I am truly awed by the many successes of Shorebank, especially the non-bank side that I got to know. For those of you who didn’t have time to read David’s piece, here is a paragraph that details just some of the amazing activities of the parts of the organization that sprang from and were funded in no small measure by David’s investment management skills.



“ShoreBank Corporation founded and managed the National Community Investment Fund, which is now the largest single investor in community development financial institutions in America. The non-profit Center for Financial Services Innovation has become the nation's leading authority on financial services for under banked consumers. Through its subsidiary, ShoreCap Management, ShoreBank raised a $28 million fund to invest in banks serving small and growing businesses in the developing world. That fund, created in 2003, has achieved a rate of return greater than 25%. A second fund, which has raised $50 million so far, is in the process of making its first investments. The achievements of the international consulting firm, ShoreBank International Ltd., are truly breathtaking. SBI's practice spans the entire developing world. Its clients and partners are the major international development agencies including the European Bank for Reconstruction and Development, the Gates Foundation, and the International Finance Corporation. In 2009, ShoreBank International facilitated more than 10,000 development loans with an average loan size of $5,000. It trained 485 loan officers, more than a quarter of them women. It raised $62.6 million of debt capital for BRAC, one of the largest microfinance organizations in the world, to fund its initiatives to combat poverty in Tanzania, Uganda and Southern Sudan.”



I added the emphasis for 2009 because I know how hard it was to make headway in raising funding in the midst of the crisis, but Shorebank affiliates did. We should all be in awe of the success of the collective Shorebank team over nearly 40 years. I know I am.



Sid Johnston

Executive Director

The Development Fund

Phone:+1-415-981-1070

Cell: +1-415-516-6837



From: bounce-7605932-4989907@list.cornell.edu [mailto:bounce-7605932-4989907@list.cornell.edu] On Behalf Of gmorishige@comcast.net
Sent: Thursday, December 23, 2010 11:38 PM
To: communitydevelopmentbanking-l@cornell.edu
Subject: The Next Chapter for George Bailey



"The Next Chapter for George Bailey"



Around this time of the year, I like to think about the lessons about banking, finance, and life in general in the holiday film classic, "It's a Wonderful Life." In this Frank Capra classic, the film follows the life of George Bailey, as played by Jimmy Stewart, during the highs and lows of Bedford Falls, along with the highs and lows in his own life. For this small community, the Building & Loan serves as a vital source of financial services and credit, helping its customers during periods of war and economic depression. While the Bailey Building & Loan is fictional, it represents the mission of financial institutions around the world. If you haven't seen this film, please stop reading and go buy, rent, or download this classic movie.



It's the day after Christmas, 1946. Two nights earlier, the people of Bedford Falls filled the Bailey household, opening their hearts and pocketbooks to bail out George Bailey, while singing "Hark the Herald Angels Sing." On Christmas Day, George hugged his family just a bit tighter as they celebrated the holiday. But today, it's back to work at the Building & Loan.



As George made his way to the front door, the bank examiner and newspaper reporters were already there. The bank examiner drove all the way back from Elmira early in the morning to continue his review of the Building & Loan's books. Uncle Billy eventually remembered where he left the money, which resulted in the government's prosecution of Mr. Potter for grand larceny. Even though the $8,000 was recovered, the investigation exposed the Building & Loan's cash management and liquidity issues, ultimately resulting in the Board's ouster of the eccentric Uncle Billy. In the months that followed, more information about the Building & Loan's troubles were publicized in the newspapers. Despite the rally of support, there were questions about whether Sam Wainwright's wire plus the funds raised in the Bailey household were enough.



Then, on one day in August 1947, the Building & Loan was no more. For the last time, George Bailey stood at the doorway of the Building & Loan, his tall, dimly-lit figure casting a shadow into the office once filled with customers. In a box, he carries only a handful of things, such as his father's portrait and a sign bearing "All you take with you is that which you've given away." George wondered what he accomplished, now that the Building & Loan was no more. As Clarence had taught him once before, he knew he helped many customers and affected so many lives, but this sad moment still tested his faith. While George reflected on what he could have done differently, he indulged in a moment to recall his many happy memories. His smile fell as he tossed the daily newspaper into the box, the feature story of which was about the Building & Loan. Its headline was cold: "Small Enough to Fail."



Just as George was about to leave, the phone rings with Sam Wainwright on the other end of the line. Sam brushes through his condolences about the Building & Loan and quickly gets to his own agenda. With the end of World War II, Sam's enterprises secured a number of contracts for early rebuilding efforts in Europe and Japan. He asks George if he'd be willing to travel overseas and manage a couple of projects. Stunned by the opportunity, George stammers, "would I ...?" Sam notes that the whole family is welcome to travel with him and see the world. George hangs up with a smile restored, finally able to experience the adventures he dreamed of as a child. He closes the door to the Building & Loan for the last time, turning the page to his next adventure in life.



Once of one of the best known community development financial institutions in the world, ShoreBank failed in August of this year. For many ShoreBank supporters, we watched the news reports earlier this year as the bank fell into distress and closure. For myself as a ShoreBank alum, I was heartbroken. The institution was reincarnated, recapitalized, and renamed to continue its mission, though under new leadership as Urban Partnership Bank. I'm looking forward to hearing more about the new organization in 2011 and beyond.



Despite these challenging economic times, many financial institutions big and small continue to thrive, focusing on the financial service needs of households and businesses. While ShoreBank's failure is unfortunate, it would also be unfortunate to simply dismiss the failure as purely an anomaly and move on. Some have already been written, like The Economist's "Small Enough to Fail" (http://www.economist.com/node/16891993) and ShoreBank alum David Oser's presentation to Roosevelt University (http://shorebank.typepad.com/the_oser_view/2010/09/). Similarly, I hope that ShoreBank's successes will also continue to shine. Hopefully, ShoreBank's legacy can provide insight for other financial institutions, as well as continue to address the financial needs of their customers.



To all of the George Baileys in the world, best wishes for happy holidays and a prosperous 2011.

CDB list instructions http://www.runonthebank.net/cdblist.htm

[Community Development Banking List]

Original message from: kjones@ironboundcc.org

I absolutely agree with Bill Myers post-mortum of Shorebank. While in grad school I was an intern at Cleveland Bank, did my final consulting project for the strategy team and did a small consulting project.

One thing always stuck out at me, and that was the internal struggle of "stay the way we have always been",(original SBK'ers) versus "innovate and grow" (newer SBK'ers). At
the end of the day I think the failure to innovate, welcome efficiencies, at
a deliberate pace and competition of innovation in the field had a great deal to do with it's demise.

I will, however, cherish my experience and am saddened I never had a chance to be a full time part of the team.

Kristyna Jones
Local Initiatives Support Corp (LISC)
Director, Gulf Rebuilding Initiative
Kjones@LISC.org
(504) 444-5889