INTRODUCTION

Moving low-income people to self-sufficiency ACCOMPLISHMENTS requires a set of tools to build assets, successfully invest those assets, and ensure alternatives to Researched the Ability of Low-Income predatory or high cost products widely targeted to Unions to Serve Low-Income People low-income people. The Community Reinvestment Act (CRA) is one of those tools that have A new report from Woodstock Institute, Financial successfully leveraged billions of dollars in com- Services for People of Modest Means: Lessons munity development financial services from private from Low-Income Credit Unions, addresses credit sector financial institutions, making millions of union services for lower-income consumers and low-income people into new homeowners and under-served communities. For years, the Federal savers. Creating a mandate for to provide Reserve Board estimated that about ten million targeted investments in affordable housing, small households in the U.S. lack access to basic business development, affordable mortgage pro- accounts. However, a recent study by the General ducts, and low-cost bank accounts, the Community Accounting Office found that there are as many as Reinvestment Act has enjoyed substantial 22.2 million unbanked households---comprising bipartisan support, helping to create an ownership about 56 mil-lion adults. This staggering figure society that stresses access to capital at a fair points to a crisis in the bifurcated financial service price. world.

During 2004, the success of the Community Financial Services for People of Modest Means, Reinvestment was severely weakened by a asserts that credit unions can make a significant regulatory agency that enforces the act for national contribution to reducing the number of unbanked savings and . Acting without notice to their and provide services to lower-income consumers. fellow bank regulators and failing to issue even a In fact, many credit unions offer financial services cursory public comment period, the Office of and loans desired by lower-income consumers. Thrift Supervision has unilaterally reduced the How-ever, there are serious questions about community reinvestment standards to which banks whether mainstream credit unions are adequately are held, and the number of banks to which the act serving people of modest means. applies. By turning back the effectiveness of CRA, this agency overstepped its fellow regulators and Previous Woodstock Institute research has illu- weakened the mandate placed on banks to help strated that many mainstream credit unions have low-income people build assets. Woodstock failed in meeting the needs of low-income people. Institute has worked diligently to describe Financial Services for People of Modest Means empirically the likely consequences of these finds that the low-income credit union (LICUs) actions and develop policy alternatives. industry is one segment of the credit union industry that has succeeded. Case studies of three low-income credit unions, Trustar FCU, Greater GOALS Abbeville FCU, and El Paso Employees FCU, provide lessons on how mainstream credit unions Woodstock Institute's goals are to promote can more effectively serve modest-income con- community reinvestment, economic development, sumers and communities. These lessons include: and access to capital and credit in lower-income the importance of financial education and and minority communities in ways that help counseling services; establishing partnerships with develop and support local leadership. Our specific other com-munity organizations or businesses; tools are applied research and policy development, generating financial support; developing technical assistance, public education, and financially sustainable initiatives; and establishing coalition-building. effective marketing strategies. Developed Community Partnerships with Mainstream Credit Unions

In 2004, Woodstock Institute introduced a new As part of the project, Woodstock Institute issued technical assistance project, building on its long- Building Community Assets: A guide to Credit standing work bringing asset building resources Union Partnerships to help organizations and and services to low-income communities. Its goal credit unions sustain partnerships and meet the is to provide technical assistance to three or four future financial services needs of the underserved. non-profits seeking to expand financial It is also developing an Internet-based networking opportunities to low-income and minority families and communication tool that will enable credit and communities by partnering with mainstream unions, community organizations, and others to credit unions. exchange information on community/credit union partner-ships. Many families and communities simply do not have access to convenient and appropriate products Produced an Organizing Guide for Community and services tailored to their needs. Mainstream Organizations Seeking to Partner with Main- credit unions, who in past years have been stream Credit Unions struggling to meet the financial needs of low- income and minority families and communities, Woodstock Institute published Building Community represent unique partners. Their nonprofit status Assets: A guide to Credit Union Partnerships in provides them with the ability to offer mortgages October, 2004. This guide lays out the necessary and checking accounts at a lower-cost than banks. steps to: understanding credit union operations; By lowering the cost of basic services, more developing a partnership business plan; locating under-served families and communities can enter local credit unions; choosing and contacting the financial mainstream. possible partners; negotiating a partnership imple- mentation plan; and monitoring and evaluating the Woodstock Institute sees this as an opportunity to ability of the partnership to increase low-income work with community organizations and help membership. credit unions fulfill a critical part of their mission– –bringing low-cost financial services to the under- Mainstream credit unions have the ability to offer served. Four organizations working in underserved affordable financial products and services through communities were selected. their federal and state tax exemptions, but they have historically been unable to recruit low-income Fresno West Coalition for Economic Empower- people as members. Likewise, while community ment, Fresno, CA will receive assistance in de- organizations have many members who lack access signing a business plan for a new credit union that to basic banking services, they are unable to meets the transaction and short-term credit needs commit the resources to chartering a credit union. of the community. Spokane Neighborhood Action Partnerships between community organizations and Program, Spokane, WA is seeking to expand its existing credit unions offer both organizations the limited service credit union branch from a pilot chance to more effectively serve low-income project to a full service operation. Community people. Action Project, Tulsa County, OK is seeking a credit union to assist victims of This guide was produced as part of Woodstock and help establish a financial education program. Institute’s ongoing organizing and technical assis- Hartford Individual Development Account Colla- tance efforts focused on increasing low-income borative, Hartford, CT is seeking assistance in membership in credit unions and ensuring that attracting a limited service branch of a local credit mainstream credit unions live up to their mission union that does not currently serve low-income of meeting the financial needs of people with families adequately. modest means.

2 Released Report Calling for Stricter Regulation of Bounce protection procedures are intentionally un- Protection to Protect Consumers from clear so that consumers can’t compare it to other Abuse products. Many banks don’t even tell their cus- tomers they have bounce protection. Currently, Woodstock Institute released Reinvestment Alert banks aren’t required to tell accountholders the #26: Banking on Bounced Checks: Federal Pro- types of transactions covered, the amount of the posal on Bounce Protection Still Exposes Con- overdraft limit, and the order in which checks are sumers to Hidden Bank Fees, an alert describing processed. Some banks process the largest checks the perils of bounce protection, a program in- first to maximize the number of checks bounced creasingly offered by banks across the country. and the amount of fees charged. Woodstock Insti- The report, which examines the details of this tute and several other consumer groups are asking program at the Chicago area’s seven largest banks the Federal Reserve Board to regulate bounce calls for stricter regulation of bounce protection. It protection under the Truth In Lending Act to make also provides recommendations to consumers on these procedures more clear, and to impose how to avoid stiff fees and unclear disclosures additional consumer protections. from their banks. Released a Report Detailing the Strong Relation- Bounce protection is effectively a short-term loan ship between Subprime Lending and program. Customers have the ability to withdraw funds from an account above and beyond its In March of 2004, Woodstock Institute released current balance for a fee. The overdraft fees are, Risky Business–An Econometric Analysis of the in effect, an interest rate. Overdraft/non-sufficient Relationship Between Subprime Lending and funds fees typically are $25 to $35 per transaction. Neighborhood . This report analyzes Many banks will even charge an additional the impact of subprime lending and its relationship “extended” overdraft fee, usually a $5 to $6 to increased and spatially concentrated foreclosures charge for each day the account remains in the Chicago region. The report finds that sub- overdrawn. prime lending is the dominate driver of the increased and highly concentrated neighborhood Annual percentage rates (APRs) for bounce pro- foreclosure levels in the late 1990s through 2002. tection at Chicago area banks are excessive. In a In the Chicago region, subprime loans lead to scenario that involves a $200, 14-day loan made foreclosure nearly 20 times as often as up of five overdraft debits, APRs at the seven conventional loans, even when controlling for study banks range from 1,629 percent to 3,441 neighborhood demographics and economic percent, with a mean of 2,424 percent. For this conditions. loan, consumers would pay between $125 and $264 in fees for the $200 overdraft. The report represents one of the first studies to move beyond the issues of individual consumer Some banks use dishonest practices to increase the abuse or the impact of regulatory actions on access number of overdraft/non-sufficient funds fees. The to mortgage credit and to look directly at the report itemizes these practices. For example, many impact of subprime lending on neighborhood banks now display a “cash available” figure rather foreclosures. than an “account balance” at ATM terminals and on periodic statements. This “cash available” The report’s key findings include: figure is the sum of the account balance and the overdraft limit, which misleads the consumer into • High-cost, subprime lending leads to fore- supposing they have more money in the account closure at a much higher rate than previously than is the case. In this way, consumers are almost thought. invited to incur exorbitant fees.

3 • Subprime home purchase loans lead to neigh- borhood foreclosure rates 28 times higher than • A new definition of that would conventional loans. encompass current and future short-term, high- cost consumer credit products. • Subprime home purchase loans have the largest per loan impact on neighborhood • A limit on the maximum principal borrowed foreclosures. based on the borrower’s income.

Prime lending, on the other hand, had minimal • Limits on the number of rollovers per loan. impact on the foreclosure level and, in the case of • A cooling-off period between payday loans to refinance lending, prime lending actually reduces allow borrowers to stabilize cash flow the level of foreclosures expected. From this analy-sis, Woodstock Institute determined that • A low-cost repayment plan that would enable stronger regulation might be necessary to prevent borrowers to escape the cycle of debt high rates of foreclosures in struggling associated with payday loan rollovers neighborhoods even if it may reduce access to credit for a few borrowers. This report was used as a benchmark for Wood- stock Institute’s ongoing discussions with the Researched the Predatory Consumer Loan Pro- national payday loan industry as part of the blem in Illinois Monsignor John Egan Campaign for Payday Loan Reform. In April 2004, Woodstock Institute released Reinvestment Alert #25: New Terms for Payday Contributed to a Study of the Debt Collection Loans: High Cost Lenders Change Terms to Evade Practices of a Major Payday Lender Illinois Consumer Protections. This alert describes changes in the Illinois payday loan industry since The Institute made a major contribution to The 2001 when new regulations were enacted. These Egan Campaign Report, Greed: An In-Depth Study regulations were developed to prevent consumers of the Debt Collection Practices, Interest Rates, from over-borrowing and becoming captive to pay- and Customer Base of a Major Illinois Payday day lenders through perpetual refinancing. How- Lender. ever, well publicized loopholes in the 2001 regula- tions have left payday lenders essentially The report tells the stories of individuals who are unregulated in Illinois. trapped in cycles of never ending debt, and provides concrete evidence regarding payday loan The alert describes the new products developed by debt collection litigation in Chicago, Illinois, the payday loan industry, including a 31-day loan focusing specifically on Americash, one of the that evades the current regulations covering loans biggest lenders in the state. While payday lenders made for 30-days or less and high cost installment claim that their business (providing short-term loans. It also demonstrates that the average bor- loans at exorbi-tant interest rates) plays an rower has significantly lower-income than other important role in the communities they serve, this Illinois consumers. Despite arguments to the con- report exposes the reality that many payday loan trary, the alert finds that the payday loan industry customers face ever-increasing debt, heightened continues to targets minority and lower-income financial anxiety, and the very real chance of communities. traumatic litigation.

The Institute also makes several policy recom- mendations that are crucial to safeguarding Illinois consumers from predatory consumer loans. They include providing:

4 Among the report’s key findings are the following: the proposed increase from $250 million to $500 million. This new large bank definition drastically • Contrary to the industry’s claims, lawsuits reduces the number of banks that will be subject to against payday loan customers are a common community development lending, investments, and occurrence. From 2000 to 2003, one such services examination in their chartered communi- lender, Americash, sued 898 people in ties. The FDIC then followed suit and issued a Chicago alone. similar proposal. The FDIC has not yet published the final rule. • Payday loans are anything but affordable. In 2002-2003, the mean Woodstock organized comment letters from com- (APR) on Americash loan products with terms munity organizations and likeminded individuals of 31-days or less was 573.18 percent. throughout Illinois. Nationwide the over 3,000 letters opposed the rule’s adoption. Woodstock • Court records indicate that the average payday Institute also contacted numerous media outlets loan was $331.14. Customers were charged an both in the Chicago region and in downstate average finance charge of $144.35—almost Illinois, protesting this detrimental change to CRA. half the amount of the loan itself. Released Report Surveying Community Reinvest- • On average, Americash sought $825.77 in ment Legislation in Several Countries damages from the customers they brought to court—quite an increase on the original loan In a new publication, A Global Survey of Com- amount, and indicative of the way in which munity Reinvestment Laws: The Obligation of the ostensibly “affordable” payday loans quickly Private Sector to Serve the Underserved in Several balloon into financial disaster for the average Countries, Woodstock Institute has produced the working person. first ever description of community reinvestment legislation in countries around the world. The • Americash’s attorneys sought an average fee of report documents public sector mandates in eight $303 per collection case, despite the fact that countries that address private sector financial almost every suit was resolved in favor of the institutions’ responsibilities to serve lower-income lender with minimal litigation. Greatly exceed- people and undeserved communities. These ing the average loan size of $331.14, countries include; Australia, Brazil, Canada, India, Americash and its attorneys ended up asking Nigeria, South Africa, the United Kingdom, and for $954.52 in the typical payday loan case, a the United States. The report notes that there may difference of $623.38. be additional countries with such mandates.

Worked to Preserve Comprehensive CRA Exami- Among the report’s findings are: nations for FDIC and OTS Banks • In 1977, the Indian Central Bank ruled that no Woodstock helped organize a Chicago region and new bank branch application would be ap- downstate letter writing campaign targeted at proved unless four branches were also built in reversing the recent FDIC attack on the undeveloped areas. That rule was eliminated in Community Reinvestment Act. 1990 but, while in operation, helped triple the proportion of credit dispersed in rural areas. Going beyond the initial joint proposal issued by the four federal bank regulators, in 2004 the Office • Beginning in 2001, all Nigerian Banks are of Thrift Supervision (OTS) raised the asset thres- required to set aside 10 percent of their before- hold for the comprehensive large bank CRA tax profits and invest these funds in small and examination from $250 million to $1 billion, twice medium sized business enterprises.

5 • South Africa has a mandatory home loan and Brazilians. Participating nonprofit organizations mortgage disclosure law but is still debating a were invited to share the opportunities and chal- law to require banks to lend and provide lenges of implementing these types of laws. financial services in underserved communities. The following organizations participated in • In 2003, Brazil enacted several community addition to Woodstock Institute: reinvestment measures including provisions that financial institutions set aside two percent • Sa-Dhan – a Delhi, India-based association of of demand deposits for loans to small busi- community development financial institutions nesses; the offering of simplified low-income seeking to improve access to low-cost capital bank accounts to low-income customers; and for investment in community development and the loosening of rules for credit cooperative projects. membership to people who live in munici- palities with less than 100,000 residents. The • FECHAC – a Chihuahua, Mexico-based two percent set-aside provision also contains foundation that funds training details of maximum interest rates, minimum and small business lending through a payroll loan amounts, and other terms. tax development fund.

This report will serve as a background paper for • National Housing Finance Corporation – a Woodstock Institute’s international program seek- South African financial intermediary that has ing to promote mutual problem solving among played a central role in the drafting, passage, community development finance advocates in and implementation of a series of community coun-tries with a legislative mandate for reinvestment measures. community reinvestment. • New Economics Foundation – a London-based Hosted Representatives from Several Countries at think tank working to expand access to capital First Ever Multinational Community Reinves- and financial services to currently underserved tment Legislation Conference communities throughout the United Kingdom.

In October, Woodstock Institute hosted a small • Instituto de Estudos do Trabalho e Sociedade working conference attended by representatives (IETS) – a Brazilian research and policy from South Africa, India, Mexico, Brazil, the organization working to reduce the dramatic United States, and the United Kingdom. Held in income disparity in urban areas and produce Rio de Janeiro and cosponsored by the Brazilian meaningful opportunities for asset creation and Instituto de Estudos do Trabalho e Sociedade business development in disadvantaged com- (IETS), Centro Internacional de Estudos e Pes- munities. quisas sobre a Infância (CIESPI) and the U.S. National Community Reinvestment Coalition • Centro Internacional de Estudos e Pesquisas (NCRC), the three-day conference helped build a sobre a Infância (CIESPI) – a Brazilian policy foundation for an international community center associated with the Pontifical Catholic reinvest-ment network. The conference included a University in Rio de Janeiro working to working visit to Viva Cred’s small business loan improve the condition of young children and fund in Rocinha, Rio’s largest favela or slum. youth in Brazil’s urban centers.

The impetus for this working conference comes • National Community Reinvestment Coalition – from a series of reinvestment laws recently passed the national trade association of over 600 by the Brazilian government. These laws deal community reinvestment organizations in the directly with the provision of affordable bank United States. accounts and microfinance funding for low-income

6

Primary discussion topics included private sector Value of Different Strategies in a Growing Crisis, incentives for affordable financial products and to evaluate a variety of strategies for tackling the services as well as the unique regulatory environ- problem of affordable housing. This research ments of each country. comes at a time when over 80 million people in the United States face moderate or severe housing cost Organized South Suburban Community Reinvest- bur-dens. By one estimate, demand for affordable ment Forum units outstrips supply by nearly 3.3 million units. As direct federal subsidies for affordable housing The Chicago region continues to be characterized de-crease, unassisted housing that is affordable to by sharp imbalances in the areas of community and low- and moderate-income renters becomes economic development, as well as the mismatch increasingly important. between jobs and housing. In the south suburbs, there is an abundance of affordable housing, yet The report pays particular attention to how a economic development occurs at a much slower number of tax incentive models would impact pace than in other parts of the region. In the small “mom and pop” owners of rental housing. northwest and west suburbs, job growth and The report looks at an “average” cash flow economic development continues to steam ahead, statement of a Chicago property owner with a 24- yet there are limited opportunities for workers who unit building to illustrate the impacts. The report’s need affordable housing to live close to work. findings include:

Research conducted by Woodstock Institute over • Revival of the rapid tax depreciation allowance recent years suggests that the south suburbs: of the early 1980s would have a moderate impact on a small scale developer but is • Have disproportionately fewer banks per probably not politically feasible. capita than other parts of the region, • Changing the “passive loss” rules for investors in affordable housing to include the small • Have a higher percentage of residents who developer and increasing the amount of the are unbanked or underbanked, and special allowance deduction would bring more small developers into the affordable housing • Receives conventional loans less and market for existing buildings. subprime loans more frequently, even at higher incomes and with good credit. • Small public sector grants for the acquisition and renovation of affordable units would also The Chicago CRA Coalition, in concert with the help small scale developers serving low- Leadership Council for Metropolitan Open Com- income families but the qualifying rules would munities and several Chicago and south suburban have to be kept simple so as not to discourage organizations, hosted a forum to explore oppor- small scale owners from using the grants. tunities for leveraging the Community Reinvest- ment Act in the south suburbs towards improve- Most importantly, the study found, these ments in community and economic development, alternative strategies are not an effective bank branch locations, and home ownership. supplement to public investment. Woodstock analysis determined that the larger problem is the Released a Report Evaluating Different Strategies gross inadequacy and inequity of federal housing to Increasing Affordable Housing Production subsidies, 63 percent of which benefit households with incomes in the top fifth of the income In February 2004, Woodstock Institute published distribution. Increasing the Stock of Affordable Housing: The

7 Convened the Chicago CRA Coalition and and com-munities and its mortgages to white Negotiated an Agreement with Bank One and JP borrowers and communities. Morgan Chase • The bank will continue to offer the innovative For many years, Woodstock has convened the and flexible Community Express loan product Chicago CRA Coalition, which is comprised of through the U.S. Small Business dozens of community-based and other nonprofits Administration and work with the Coalition to that are dedicated to promoting community rein- establish flexible underwriting procedures for vestment in low-income areas. The Coalition has its other business loans. expanded significantly in recent years and now includes representatives from many suburban and • The bank will work with community groups to downstate communities. The Institute organizes, prevent foreclosures and help consumer groups staffs, and provides technical assistance for the provide solutions for victims of predatory Coalition. lending.

The Coalition challenges banks to increase their • Overall, the new bank will strive to be one of community development lending, investments, and the top five mortgage lenders in the Chicago services in their chartered communities. In some region. cases, banks enter into formal community reinvest- ment agreements with the Coalition with measur- • The bank will provide $80 million in com- able performance goals. The Coalition has pre- munity development loans in the Chicago area. viously negotiated a number of these formal These loans will support affordable agreements which it monitors through data analysis multifamily and single-family housing as well and periodic meetings with senior bank staff. as com-mercial development.

In Spring of 2004, the Chicago CRA Coalition set • The bank will increase its total community a historic precedent, negotiating a six-year development grants and investments and pro- Memoran-dum of Understanding (MOU) for the vide a breakdown of grants and investments Chicago region with New York-based JP Morgan for monitoring and evaluation. Chase on its acquisition of the Chicago-based Bank One. Woodstock and the CRA Coalition • The bank will establish 12 new branches in encouraged the bank to make a commitment to the low- and moderate-income census tracts and Chicago region spelled out in terms of new loans, achieve a ratio of low- and moderate-income investments, and financial services that benefit branches similar to that of all banks in the low-income and minority families. Chicago region.

This agreement sets strong lending, investment, The MOU is the only community reinvestment and service goals for the merged bank at the local agreement in the country with JP Morgan Chase level. The new agreement contains the following entered into as part of its acquisition of Bank One. com-munity reinvestment provisions: Provided Data Analysis and Regulatory Policy • The merged bank will establish parity in the Recommendations Related to the CRA Per- ratio of its small business and mortgage formance of Various Banks lending between low- and moderate-income borrowers and communities and middle- and One of Woodstock’s main roles is to analyze and upper-income borrowers and communities. disseminate information about specific banks’ The bank will set similar lending ratios CRA performance. In 2003, the Institute analyzed, between its mortgages to minority borrowers com-mented on, and distributed information

8 relating to the CRA performance of a number of Technical Assistance financial institutions. Our colleagues around the country rely on our expertise in this field in order Technical Assistance in Chicago and the to monitor specific and general trends related to Surrounding Metropolitan Area community reinvestment. Aon Corporation - Extending financial products During 2004, Woodstock Institute issued to lower-income households comments on major federal policy initiatives, particularly those that affect the housing and credit Bell General Credit Union - Provided research needs of low-income and minority communities. materials and expertise on ways mainstream credit These in-clude: unions can have a greater impact on the financial services available to low-income families and • Supporting stronger affordable housing goals communities. in the secondary market by encouraging Fannie Mae and Freddie Mac to more Chapin Hall Center for Children, University of effectively target loan purchases to low-income Chicago - Provided assistance on developing re- and minority communities. search strategies for the center’s North American Integration Project. • Supporting stronger regulation of high-cost overdraft protection products. Chicago Community Ventures - Provided staff with a list of contacts for community development • Opposing changes to CRA that would allow an grant solicitations. increased number of small banks to avoid rigorous evaluation of their community Chicago Employees Federal Credit Union - development activities. Provided financial literacy resources and sug- gestions for community partnerships when Chicago • Supporting a strong national predatory lending Employees FCU acquired Austin-West Garfield standard and urged the Office of the Comp- FCU. troller of the Currency to expand its criteria of a predatory home loan. Chicago Reporter - Provided information for a major Chicago Reporter article on high-cost • Successfully urging the Board of Governors of financial services in the Chicago region. the Federal Reserve System to hold multiple public hearings on the merger of Bank One Chicago Sun-Times - Met and followed-up with a and JP Morgan Chase. staff reporter and provided information on payday lending that resulted in a major newspaper article. • Supporting changes to the Electronic Funds Co-authored follow-up op-ed letter. Authored Transfer Act that would protect unbanked several op-ed pieces in support of strong com- workers using payroll cards from fraudulent munity reinvestment legislation. transfers and undisclosed fees. Country Club Hills, City of - Provided advice and data for marketing presentation to try and attract a bank branch.

Credit Card Magazine - Provided follow-up in- formation from 2004 DEMOS conference on the increase in and bankruptcy.

9 Credit Union Times - Provided information for information on an area bank engaged in the payday Credit Union Times article on low-income credit lending and refund anticipation loan business. unions and their ability to provide financial services to low-income customers and Lawndale Christian Development Corporation - communities. Discussed ways a community development cor- poration can measure and combat predatory home Chicago Community Ventures - Discussed strate- mortgage lending in their service area. gic framework for approaching banks with funding proposals for non-profit business develop-ment. Office of the Illinois Lieutenant Governor, Pat Quinn - Provided research on payday loan alter- Diversity, Inc. - Provided Community Reinvest- natives and background information for banks ment Act organizing workshop to a group of South offering these types of loans and co-hosted a press Suburban nonprofits and government officials conference opposing the changes to CRA proposed interested in fair and affordable housing. by the FDIC.

E*Trade Bank - Held a series of conference calls LISC Chicago - Provided mapping consultation regarding E*Trade’s unsatisfactory grants and in- and developed a series of health indicators for vestments performance and provided a number of program area. Chicago area community contacts. John D. and Catherine T. MacArthur Founda- First American Bank - Provided background in- tion - Provided foundation staff with detailed maps formation on redlining settlements to Chicago illustrating bank branch distribution and branching journalists as context for First American’s settle- patterns. ment with the U.S. Department of Justice. Medill School of Journalism, Northwestern Alderman Manuel “Manny” Flores (1st Ward) - University - Provided an in-depth history of the Provided background research for the creation of a payday loan industry in Illinois, and provided a list disincentive for bank-funded payday lending of contacts in the Chicago area consumer advocacy opera-tions. community.

Illinois Coalition for Immigrants and Refugee Metro Chicago Information Center - Offered Rights - Provided information on payday loan expertise on conceptualizing the future of metro operations and transactions for program partici- areas and designing metrics to measure success. pants. Monsignor John Egan Campaign for Payday Illinois Department of Revenue - Advised on Lending Reform - Provided research and sources of data for bank branch deposits and advocacy support around the issue of payday banking activity. lending reform. Identified necessary payday loan database variables to assist in the enforcement of Illinois Department of Financial and Pro- Illinois payday loan regulations. Campaigned for fessional Regulation - Provided information on release of Illinois De-partment of Financial several occasions documenting the extent of the Institutions analysis of pay-day lending. Provided payday loan problem in Illinois, developed a set of data analysis for a recent Egan Campaign guidelines for a borrower database, and advocated publication. for the release of a department study on payday lending licensees. Neighborhood Housing Services of Chicago - Discussed availability of data sources on lending Indiana Star - Provided an overview of payday and foreclosure. lending for upcoming article and gave specific

10 Rogers Park Community Development Corpora- implications surrounding a possible merger with a tion - Provided organization with contact list for mainstream credit union. soliciting community development grants or invest- ments from area banks. Children’s Defense Fund - Provided a summary of best practices, and a review of successful Southside Federal Credit Union - Met with credit products that offer banking services to the union staff as they established new account currently un-banked. products and provided information on model accounts for community development credit Community Development Advocates of Detroit - unions. Conducted extensive data analysis on Provided advice and information on community market share ratios for the top Chicago banks, and development resources for starting a Detroit area provided credit union with a list of top subprime community development credit union. lenders in service area. Housing Research Center - Evaluated community Alderman Tom Tunney (44th Ward) - Provided development activities and discussed how to information on the distribution of payday loan and quantify the impact of these activities on the companies in Chicago’s Lakeview neigh- housing market. borhood in an effort to oppose the opening of a new payday loan operation. Institute for the Study of Work and Society (Brazil) - Provided data on disparity in access to financial services between whites and minorities. National and International Technical Assistance Mavent, Inc. - Discussed the strengths and “5” Eagles Corporation - Discussed process practicability of an anti-predatory lending com- necessary to comment on a bank’s CRA per- pliance software package and its ability to allow formance and provided organization staff with mortgage lenders to comply with state lending laws regulator contact information. without the need for federal preemption.

American Association of Retired Persons - Muscatine Center for Strategic Action - Pro- Review consultation of AARP report on financial vided information on advocating for a statewide conditions of older Americans. Provided informa- community reinvestment policy in Iowa requiring tion on the effectiveness of community government agencies to consider a bank’s CRA organization and credit union partnerships. rating when depositing public funds.

Appalachian Regional Commission - Provided National Consumer Law Center - Provided feed- assistance in analyzing the impact of a proposed back to NCLC on proposals for high-cost loan FDIC change to CRA. public marketing campaigns.

Atlanta Journal-Constitution - Provided back- Office of the Comptroller of the Currency - Met ground on current title loan regulation in Illinois. with senior staff members and made recommenda- tions on possible improvements to the CRA Blue Dot Finance (South Africa) - Discussed the Examination Service Test for large banks. U.S. community reinvestment legislation environ- ment and the impact of CRA on microfinance and Our Money Place - Facilitated a discussion on housing. partnerships between community organizations and mainstream credit unions using the Maryland- Boston Community Development Credit Union - based Our Money Place as an example for several provided advice and a discussion of community other possible partnerships being formed around the country.

11 Payday Loan Alternative - Offered expertise in April developing low-cost financial products to organiza- tions across the country interested in establishing a “Communities and Community Reinvestment.” responsible payday loan alternative in their area. University of Chicago City Space Conference. Chicago, Illinois. USA Today - Gave a detailed explanation of the impact of concentrated subprime lending on neigh- “Opportunities and Challenges in Community borhood foreclosures and recent enforcement of Organizing for Major Public Systems Change: The Illinois high-cost lending laws. Case of Chicago School Reform.” Promundo and Centro Internacional de Estudos e Pesquisas Sobre a Infancia. Rio de Janeiro, Brazil. Presentations “Community Reinvestment and Changing Social January Welfare Policy.” DePaul University. Chicago, Illinois. “Community Development, Government and Banking Forum.” MCIC Conference. Chicago, May Illinois. “Check-Cashers Add to Poverty Surcharge of February Low-Income Residents.” LaSalle Bank Currency Ex-change/Credit Union Forum. Chicago, Illinois. “Community Reinvestment Organizing.” Chicago CRA Coalition Forum on the Merger of Bank One “CRA 101.” ICCA Annual Conference. Chicago, and JP Morgan Chase. Chicago, Illinois. Illinois.

March June

“Advocacy and Organizing: Building Local and “Payday Loan Borrower Profiles.” Conference of Statewide Community Collaborations.” National State Bank Supervisors. Chicago, Illinois. Community Reinvestment Coalition. Washington D.C. “CRA 101.” Third Unitarian Church. Chicago, Illinois. “Subprime Lending: Defining the Market and Its Customers.” Testimony Before the U.S. House of “Current Status of CRA from a Community Representatives Subcommittee on Housing and Economic Development Perspective.” National Community Opportunity and the Subcommittee on As-sociation of Affordable Housing Lenders Con- Financial Institutions and Consumer Credit. ference. Chicago, Illinois. Washington D.C. July “Advocacy and Organizing.” DEMOS’ Borrowing to Make Ends Meet Community Forum. Chicago, “CRA 101: Tool for Improving Community Illinois. Development Lending, Services and Investments.” Diversity Inc. East Hazel Crest, Illinois. “Chicago CRA Coalition sets Concrete, Verifiable Goals in Bank One/JP Morgan Chase Memorandum of Understanding.” Testimony before the Zoning Committee of the Chicago City Council. Chicago, Illinois.

12 September “Current Status of CRA in the United States.” Community Development Financial Association of “Maintaining a Strong CRA and HMDA.” the United Kingdom. Chicago, Illinois. Economic Growth and Regulatory Paperwork Re- duction Act (EGRPRA) Public Meeting. Chicago, “Office of Thrift Supervision Proposes Weakening Illinois. CRA.” Chicago CRA Coalition Annual Fall Forum. Chicago, Illinois. “Impact of Proposed FDIC Regulatory Changes to CRA on Illinois Communities.” Press Conference with the Office of the Lieutenant Governor. December Chicago, Illinois. “CRA 101: Tools for Improving Community October Development Lending, Services and Investments.” Identifying Community Reinvestment Opportuni- “Short-term, High-Cost Loans.” National ties for Financial Institutions in Chicago’s South Consumer Law Center Conference. Cleveland, Suburbs. Governors State University. University Ohio. Park, Illinois.

“Community Reinvestment in the United States.” “Affordable Alternatives to Payday Loans: Woodstock Institute and Instituto de Estudos do Examples from Community Development Credit Trabalho e Sociedad, First International Unions.” Credit Union Executives Society 2004 Conference on CRA-type legislation in select Directors Conference. Waikoloa, Hawaii. countries. Rio de Janeiro, Brazil.

“NonProfit Advocacy and Community Reinvest- Collaborations and Memberships ment.” Urban Planning and Policy Program. Uni- versity of Illinois at Chicago. Chicago, Illinois. Advisory Committee, Illinois LINK Committee-- Advises on strategies to implement and increase November usage of the electronic benefits transfer (EBT) direct deposit initiative in Illinois. “CRA Policy and Small Business Lending.” Community Development Finance Association Advisory Committee, MoneySmart Chicago--A workshop. Chicago, Illinois. Federal Reserve Bank-sponsored coalition of com- munity organizations, banks and regulators “CRA and Predatory Lending.” Statewide working to establish and improve upon financial Housing Action Coalition (SHAC) statewide literacy efforts in the Chicago area. conference. Springfield, Illinois. Advisory Group, Woods Fund of Chicago--The “CRA and Predatory Lending.” Northwestern group works to advise the Fund on the direction of Uni-versity Law School Public Interest Law Week. its Strategic Plan. Evanston, Illinois. Asset Building Group: Woods Fund of Chicago- “Financial Trends for Families and Changes in the - The group works to reconfigure the asset Financial Services World.” Chicago Community agendas of local community groups. Trust’s Planning Group for 2005 Chicago Matters. Chicago, Illinois. Board Chair, Financial Markets Center (FMC)- -Monitors the activity of the Federal Reserve Board from the perspective of the average citizen.

13 Board Member, Center for Community Labor Core Group Member, Policy Research Action Research--Specializes in new approaches to com- Group--Promotes collaborative research and pro- munity development, with an emphasis on manu- jects between universities and community groups facturing effective partnerships between labor, in the Chicago area to promote effective policy and community, and business groups. action.

Board Member, Chicago Area Fair Housing Executive Committee Member, John Egan Alliance--Coalition of nonprofit and government Cam-paign for Payday Loan Reform--Works on organizations working to promote fair housing in legislation, public education and advocacy to re- the Chicago region. duce the negative effects of the payday loan industry in Illinois. Board Member, Chicago Council on Urban Member, Bankers Community Collaborative Affairs--Research and policy organization that Council--A collaboration of the National Com- works on issues of poverty, race, and juvenile munity Reinvestment Coalition and representatives justice. of leading financial institutions. The Group is dedicated to improving community reinvestment Board Member, Deborah’s Place--Provides per- performance, practice, and policy. manent and transitional shelter and support services for homeless women. Member, Chicago Low-Income Housing Trust Fund--Oversees city and other funds to improve Board Member, International Center for the housing for very low-income people. Study of Children and Youth, Rio de Janeiro, Brazil--Engages in research and policy analysis to Member, Community Development Roundtable, improve the condition of poor children in Brazil Federal Reserve Bank of Chicago--Meetings and other countries. between regulators and other community repre- sentatives to discuss Midwest community develop- Board, Executive Committee, Legislative–Re- ment issues. gulatory Policy Committee and ad hoc Bank Merger Committee Member, National Com- Member, Community Development Venture munity Reinvestment Coalition--A coalition of Capital Alliance--Research strategies for evaluat- over 700 groups working to improve community ing community development venture capital funds reinvestment practice and policy throughout the and how they can effectively achieve their “double country. bottom line.”

Board Secretary and Steering Committee Mem- Member, Consumer Federation of America-- ber, Coalition of Community Development Advocates, provides technical assistance and Financial Institutions--A national group of CDFI develops policy in the interest of consumer pro- practioners and coalitions working to improve tections. national policy on CDFIs. Member, Financial Links for Low-Income Convenor, Chicago CRA Coalition--The Coali- People--Coalition of community and consumer tion develops and advocates for concrete improve- groups, lenders and regulators working to create a ment in Chicago region banks’ community comprehensive financial literacy program for reinvest-ment activities. Illinois’ welfare-to-work initiatives

Convenor, Midwest Bank Regulators and Com- Member, Governor’s Task Force on Financial munity Development Organizations Collabora- Literacy--A consortium of financial literacy ex- tive--Discusses community and regulator issues perts working to evaluate and improve financial about the implementation of CRA regulations. literacy programs in Illinois.

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Member, Illinois Insurance Collaborative--The Collaborative is seeking to document the barriers to and find solutions for equal access to home insurance products.

Member, National Low-Income Housing Coali- tion--Works to end America’s affordable housing crisis through education, organizing, and advocacy.

Member, National Forum to Promote Lower- Income Household Savings--Meets quarterly to review progress and provide feedback on Cleveland Saves, a program developed by the Consumer Federation of America and Cleveland- based com-munity groups to promote financial literacy and increased asset development.

Member, National Partnership for Financial Empowerment--Public-private partnership led by the U.S. Department of the Treasury. Seeks to raise awareness of the need for financial literacy training.

Member, New Alliance Task Force on Immi- grant Banking--Formed by the Federal Deposit Insurance Corporation in conjunction with the Mexican Consulate of Chicago, the Task Force includes banks, nonprofits, regulatory agencies, and schools that partner to further the advancement of immigrants’ access to financial services.

National Federation of Community Development Credit Unions and JP Morgan Chase--Developing and implementing an evaluation of a Community Development Credit Union Pilot Emergency Loan Program.

Steering Committee Member, National Stop Pre-datory Lending Initiative--A national coalition of research and policy organizations working to put a stop to predatory mortgage lending through ef-fective federal policy.

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