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Poor Communities Lose Billions to Predatory Lenders

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By Freddie Allen
NNPA Senior Washington Correspondent

WASHINGTON (NNPA) – Predatory lenders continue to target poor, Black and Latino communities, siphoning off $103 billion in fees and interests every year, and the rest of us are paying for it, according to a recent report by United for a Fair Economy.

“This is more money lost in poor communities than the United States spends on domestic food aid annually,” the report said. “We as a society end up subsidizing that lost income (an average of $3,029 per affected household) through a social safety net that is already underfunded and overcapacity.”

In “State of the Dream 2015: Underbanked and Overcharged,” United for a Fair Economy (UFE), an independent research group that advocates for economic equality across race, gender and class lines, chronicled the disparities that continue to plague the banking industry.

Mike Leyba, the communications director at UFE and co-author of the report said that systemic economic exclusion, largely based on race, has existed for hundreds of years in the United States.

The free labor of kidnapped and enslaved Africans enabled White male land owners and the financial institutions that supported them to accumulate massive amounts of wealth over hundreds of years.

Following the Civil War, Jim Crow laws and “The Black Codes,” continued to deprive freed African slaves of economic opportunities for decades.

After World War II, the GI Bill provided White male veterans a pathway to college, professional careers and a boost into the middle class, a bridge that was closed to Black veterans who also fought and spilled blood overseas. Later, the Federal Housing Administration blocked Black families from moving into suburban neighborhoods, built with and partially funded by government subsidies.

“More than a quarter of all White families shifted from renting to owning in the twenty years following WWII,” stated the report. “Despite laws to the contrary, Black people were excluded from buying homes in White neighborhoods and were forced instead to live in urban ghettos.”

According to the UFE report, less than 1 percent of all mortgages from 1930 to 1960 were issued to Black people.

By 2013, the median wealth held by White families ($141,900), dwarfed the median wealth ($11,000) of Black families.

“As an estimated 80 percent of assets come from transfers from prior generations, the history of the financial situations of prior generations is a primary cause of the racial wealth gap,” stated the report.

Leyba said that economic exclusion, largely based on race still exists, but it’s much harder to pinpoint.

“It may not be legalized or sanctioned by the federal government,” said Leyba. “But it still exists.”

Economic exclusion continues to plague the banking sector, leaving 93 million Americans “unbanked” or “underbanked.”

“The unbanked are people that do not have any type of consumer checking account, and are outside the entire banking system,” the report explained. “The underbanked are people that have a checking account, but also rely on Alternate Financial Service Providers.”

According to the report more than 20 percent (20.5 percent) of Black households were unbanked in 2013, compared to 3.6 percent of White households.

Forty percent of Black households were full-banked compared to 75.4 percent of White households.

Alternate Financial Service Providers or AFSPs include payday loans, auto title loans, rent-to-own shops, subprime credit cards, high-interest rate installment loans, check cashing, prepaid reloadable debit cards, and money orders, the report said.

Researchers found that people shun traditional banks in favor of AFSPs for a number of reasons. Fifty-eight percent said that they didn’t have enough money to meet minimum balance requirements to keep an account open, while others (17 percent) said that past credit problems made it difficult for them to open new accounts.

In recent years, following the housing crisis banks, Chevy Chase Bank, Wells Fargo and Bank of America paid out multi-million dollar settlements in mortgage lending discrimination lawsuits involving Black and Latino borrowers.

But even if Black customers were able to meet the minimum requirements, had good credit and confidence in banks, the contraction and consolidation in the financial sector following the Great Recession have placed traditional banks out of reach for millions of Americans.

AFSPs moved in to fill that void.

“Payday lenders are nearly eight times as concentrated in neighborhoods with the largest shares of Blacks and Latinos compared to White neighborhoods, draining nearly $247 million in fees per year from these communities,” the report said. “Even after controlling for income and a variety of other factors, payday lenders are 2.4 times more concentrated in Black and Latino communities.”

As local bank branches fade away, Leyba said, community businesses dry up.

“What we’re seeing with more large corporate banks taking over those local branches, it makes it so that there is very little incentive for them to invest in that local area,” explained Leyba. Especially, when the large corporate banks can get a much higher yield from other financial products, he added.

UFE researchers suggested that the United States follow other industrialized nations such as France, Germany, Japan, China, Brazil, India, and New Zealand by offering more banking services through local post offices, which have a much larger foothold in urban and rural communities than banks.

The report said that nearly 40 percent of post offices are in zip codes “without a single bank,” and about 20 percent are in zip codes with just one bank.

“In addition to handling money orders, transfers, and debit cards, postal window clerks have experience cashing checks, processing refunds, renting post office boxes, preparing bank deposits, and maintaining business accounts,” the report said.

The report also recommended reforming the Community Reinvestment Act (CRA), modernizing payment technology to keep pace with the new realities of banking and adopting national standards to cap the interest rates on payday loans.

Leyba said that lending circles that provide small community-based loans, have also been successful in emerging markets.

“We know that not everyone will find their way into the banking system, as there is no way to make that happen either through policy solutions or innovations in products,” stated the report. “What policy makers and advocates can do, though, is look for ways to attract, retain and encourage people to begin to build assets, build a favorable credit history and ultimately begin down the path of wealth creation.”

Select HBCU’s Receive $25 Million Grant for Cybersecurity Education

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Special to the NNPA from the Afro-American Newspaper

Norfolk State University will lead 12 other historically Black college and universities in participating in a $25 million, five-year initiative established by the White House to foster education and training in cybersecurity for aspiring minority students.

As one of the leading institutions for the program, announced on its campus on Jan. 15, Norfolk State will use its share of the funds to train faculty and students; build course development in cybersecurity; and expand research and programs in cybersecurity fields.

Norfolk’s President and CEO, Eddie N. Moore Jr. called the grant a prime example of how NSU plans to forge ahead in a world where information technology has become an in-demand field.

“As the world becomes more dependent on technology and information is shared digitally, the threat of online hackers and data breaches are daily realities,” Moore said in a statement. “Norfolk State is poised to provide the expertise in cybersecurity sought by many employers in the private and public sectors, such as business, banking, healthcare and the military.”

The White House said the program will supplement the president’s plan to focus on “on the critical need to fill the growing demand for skilled cybersecurity professionals in the U.S. job market, while also diversifying the pipeline of talent in the science, technology, engineering, and mathematics (STEM) fields.”

“The grant is not just about cybersecurity, it is also about developing a workforce pipeline in a very critical area,” Norfolk State Provost Dr. Sandra J. DeLoatch said. “Well-trained cybersecurity workers are needed and our goal is to be a leading institution in that field. We, along with our partners, plan to educate a new generation of cybersecurity workers who will help keep our country safe from cyber-attacks.”

In addition to Norfolk State, also participating in the government program are: Allen University, Benedict College, Bowie State University, Claflin University, Clark Atlanta University, Denmark Technical College, Morris College, North Carolina A&T State University, Paine College, South Carolina State University, the University of the Virgin Islands, and Voorhees College.

Few Jobs for Blacks in Silicon Valley

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By Kamau High
Special to the NNPA from the Afro-American Newspaper

Unless you are a White or Asian male, you are unlikely to work at some of the biggest technology companies in America. And while things like President Obama’s recent efforts to make community college free for more people are attempts to change that, the lack of diversity in the tech field is likely to take some time to change. So, minus a new civil rights movement focused on forcing technology companies to increase the number of women and minorities they hire, what can be done?

The AFRO spoke with a range of recruiters, outside organizations and people who have forged their own path to make Silicon Valley more equal in its hiring practices. Two ideas emerged from these conversations: 1) Don’t wait for the government to help you because it will take a long time for any appreciable difference to be made and 2) If these companies aren’t hiring the right people, then it’s time to strike out on your own.

That’s what Tiffany Thomas-Randall, a Columbia, Md. resident, did when she lost her government job doing background security in 2010. While sending out resumes in early 2011, she enrolled in a computer security program at the University of Maryland University College. Despite having taken a few computer classes while an undergrad, she felt lost. “I went in not knowing anything,” she says. “I did a lot of reading in order to catch up with the other students.”

An adviser suggested she go into computer forensics, the science of examining computers for evidence of a crime. She eventually broke into the field and worked for a year a half before going back to school for her master’s in cybersecurity. “Where I worked I was the only Black female. People who passed me in the hallway would say ‘Stick it out,’” she says. “I tell others [Black women] to do the same thing.”

After moving on to another job at a large consulting firm, she decided to start her own computer forensics firm called SCORPION: Digital Forensics last October. She is currently in the process of filling out the proper paperwork to become certified as a government contractor. Asked what type of people she is looking to hire she says, “I’m looking for someone willing to learn. You have to want to know more. It doesn’t matter how old they are as long as they have a good work ethics. I’m not looking for 8-5 Monday through Friday. You could have to investigate something in the evenings or on the weekends.”

When it comes to who the largest tech companies in America are hiring, the numbers are depressing. Names like Yahoo!, Facebook, Amazon, Google—sites we use every day—started releasing their hiring statistics last year after pressure from civil rights groups. The Federal government requires large companies to file ethnic and gender breakdowns of their employees. However, the numbers are confidential so it’s up to individual companies to release those numbers to the public. Known as EEO-1 reports, the statistics pretty much live up to the stereotypes of the technology world: White or Asian men are over-represented with Blacks, women and Hispanics underrepresented. Some are better than others but for the most part, it’s a sad state of affairs.

How did we get to this state? It’s a familiar tale that anyone who lives in a community with low property taxes will know. Property taxes, in general, are the second largest chunk of the money schools get right behind income and sales taxes. If property taxes are low, then the schools don’t have much money to work with. This translates into old and outdated equipment as well as not enough money to hire the right people to keep a school’s technology up to date.

One organization trying to deal with that is Hack the Hood, a San Francisco based non-profit that attempts to engage school-age kids in the tech world. Hack the Hood does this by sponsoring six-week technology boot camps that incorporate field trips, network, practice public speaking and build websites.

Only in its second year, Hack the Hood received a grant of $500,000 from Google last year to expand its programs. “We are in a unique position of living in the center of where the majority of tech companies are,” says Zakiya Harris, co-founder of the organization. “When Twitter goes public and there are 30 new billionaires living in that area that affects them [in the form of gentrification]. We give them the knowledge and expertise to move not just as consumers of tech but as creators.”

While other articles in this series will explore the educational environment that has led to such a paucity of Black workers in the tech world, Harris offers this observation, “Does every young person who goes through our program get a job in tech? That remains to be seen. We have people who are training at tech companies, one of our young people started making his own video game. As for the longer term impact? We’re still figuring that out.”

In addition to teaching young people to operate in tech circles, Hack the Hood also focuses on getting entrepreneurs to start their own businesses. When people finish with Hack the Hood the organization wants them to be ready to join a company or form their own. “Major tech companies are insular and hire people who know someone who knows someone. Lots of our young people don’t move in those circles. We’re trying to teach young people how to operate in those networks,” says Harris. “If we look at diversity and inclusion when it comes to the corporate world it still needs lots of change. Is the tech industry going to be any different?”

One person trying to answer that question is Frank Odasz, who works with rural Native American groups in Montana on getting them up to speed in technology. He draws some interesting parallels to the Black community when it comes to getting more young people into the tech world. “Rural communities are similar to urban ones,” he says. “Everyone has a self-reinforcing belief that they are incapable of doing amazing things even though in their own neighborhoods there are examples of people being successful.”

These include the person making a web site for the neighborhood barber shop and the local nail salon. As Odasz says, “Most innovations don’t come from big companies. The founders of Facebook and Google dropped out of college. You can teach yourself anything you want to know with the open education resources on the internet. Jobs have not been coming from big companies, instead they come from grassroots entrepreneurship.”

Echoing that sentiment is Nicol Turner-Lee, vice president and chief research and policy officer of the Minority Media and Telecom Council, which, full disclosure, provided a grant for the AFRO to produce this series. MMTC is a non-profit focused on civil rights in the communications industry. “We as a community need to shift from being consumers to producers. We remind kids that instead of buying an Xbox you can create that game,” says Turner-Lee. And it’s not just creating technology. “Someone’s got to write the bill, record the data, be the greeter at the front desk and deal with legal concerns. We treat the tech industry like it’s the grown and sexy stuff. It’s an eco-system and they are generating [lots of different kinds of] jobs.”

For Blacks who do make it into the tech industry just being there can be an isolating and frustrating experience. Justin Edmund, an early hire at Pintrest in Silicon Valley, wrote about this extensively on Medium.com. After the protests in Ferguson, Mo., following the death of Michael Brown, he took to the Internet to express his feelings. “In today’s America, I could walk to the store right now and be shot dead in my tracks because of a misunderstanding, or perhaps for no reason at all. There are people in the world that will never see past the color of my skin. Instead, they will shoot me dead for walking home from the corner store with Skittles and an Arizona iced tea. For many of you fortunate enough to read this blog post, you will never know how frightening that is.”

So what can we do? Like many answers to such a question, it depends. If you’re a parent there are plenty of organizations working to get Black kids into things like making web sites and computer programming. See box below.

For students in college who are either already in or thinking about engineering, one of the key degrees, besides computer science, for tech companies there are organizations that offer everything from help to refresher courses. One of those is the National Society of Black Engineers. Sossena Wood, chairperson of the NSBE, says the protests spawned by the killing of Michael Brown and Eric Garner are sparking protests on college campuses demanding more minorities be recruited. “If you push policy at schools and force them to recruit more African-American and poor minorities that will make a difference. Everything going on with Michael Brown is waking up my generation because students are realizing they have a voice,” she says. “It’s not necessarily speaking out about police brutality but about injustice at their institutions. Students can drive more change than they necessarily know.

For adults and mid-career people there are options such as recruiters. Cindy Gallup, who in addition to running makelovenotporn.com also recruits for tech start-ups among other types of companies. “The lack of diversity in tech won’t get addressed until it gets addressed in an emotional and direct way,” she says. “When I give talks I speak from the point of gender diversity but it applies to other forms of diversity. I say to the audience, ‘I want to talk to the men for a moment. Men: it’s very comfortable hiring people like you. Working with people like you. Starting companies with you. And hanging out with people like you. If you want to own the future, you have to get uncomfortable.’”

In the course of this investigation the AFRO reached out to some of the top tech companies in America including Google, Facebook, Yahoo!, LinkedIn, Microsoft and here in Baltimore NorthrupGruman. Beyond some of them providing us with a perfunctory statement on their efforts to improve diversity all of them declined to be interviewed about this important topic.

Thanks to the efforts of activists such as Jessie Jackson and the Rainbow PUSH Coalition, among others, many of these companies are at least making moves to rectify the situation. Intel, for example, just announced it was going to spend $300 million on hiring minority and female talent. But like all things, only time will tell if these are more than just empty gestures to divert the attention of people who are rightfully upset at these companies’ discriminatory hiring practices or lack of genuine attempts at reform.

 

New York Attorney General Settles Agreement with Bank in Fight to End Discrimination

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Special to the New York Amsterdam News

Prompted by concerns of New York banks not lending to minority groups after the mortgage and financial crisis in 2008, Attorney General Eric Schneiderman’s Civil Rights Bureau launched an investigation into the claims.

The investigation found that Five Star Bank’s lending area included most of the surrounding area around the city of Rochester, N.Y., but not the city itself or any area that consisted of predominantly minority residents. This went on from at least 2009 to 2013. During this time, the bank also enacted a policy that pronounced any property outside of their lending areas as an “undesirable loan type,” which discouraged borrowers from mostly minority areas.

It was also found that the bank rejected borrowers who were looking for a mortgage of $75,000 or less for seven out of 12 of the mortgage products they offered. Since the mortgage in the predominantly minority neighborhoods averaged less than Five Star’s cap, the policy was discouraging for residents who hailed from those communities.

This agreement between the attorney general and Five Star requires the bank to open two new branches in areas with at least a 30 percent minority population. One of the offices will be within at least two miles of a majority minority neighborhood, the second will be within one mile. Additionally, $250,000 will be devoted to advertising directed to minority communities, and $500,000 in discounts and subsidies on loans for minority neighborhood residents in the Rochester metro area is also included in the agreement.

The bank also has agreed to maintain its extended lending area, eliminate its minimum mortgage amount requirement, pay $15,000 in costs to the state of New York, provide live-fair training to its employees and submit to monitoring for the next three years.

The attorney general stated, “All New Yorkers, regardless of the color of their skin or the racial composition of their neighborhood, must be afforded an equal opportunity to obtain credit.” Hopefully this agreement will help actualize this sentiment.

District 9 Councilwomen Inez Dickens commented that she was “glad the attorney general was able to seek social and economic justice for the people of Rochester.”

Schneiderman continued, “My office will continue to fight for equal justice under law for all New Yorkers and to ensure that lenders treat people fairly in the marketplace. It’s truly disheartening that in 2015, we are still confronting the systematic racial discrimination that has persisted throughout our nation’s history.”

“Home ownership is the major dream of most Rochesterians. It usually is the single largest investment made by a family,” said William G. Clark, president and CEO of the Urban League of Rochester. “To deny this dream through unfair lending practices not only prevents these families from building wealth through home equity, it also leads to a decline of housing values in the impacted neighborhoods. We applaud the attorney general’s efforts and commitment to ensuring that all families are afforded a fair and equal opportunity for home ownership in the communities of their choice.”

New Orleans Experiences Historic Lows in Murder

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By Mason Harrison
Special to the NNPA from the Louisiana Weekly

Three years after kicking off the much-ballyhooed NOLA for Life murder reduction strategy, Mayor Mitch Landrieu is touting the program’s success in the new year as the city witnesses a sharp decline in its decades-long recalcitrant murder rate, yielding the city’s oft-repeated moniker as the nation’s murder capital. Landrieu praises the effort as an “all-hands-on-deck” approach to crime intervention through public-private partnerships crafted to prevent violence, beef up gang prosecutions and increase job opportunities for thousands of mostly young Black men operating at the margins of the city’s economy.

In 2014, the city tallied 150 murders, a number not seen since 1971. When adjusted for population size, the figure is the lowest total number of murders in New Orleans since 1999, says Charles West, director of the city’s innovation delivery team. Last year’s drop in murders comes on the heels of previous crime figures stemming from 2012 and 2013, something, West says, is tied to NOLA for Life. “Looking at the path we’ve taken, we’re experiencing three straight years of reduced murders,” West says.

Landrieu hails the historic murder lows, but cautions stakeholders to be aware that “we have a long way to go,” according to an early January statement from his office touting the 40-year low. The mayor, who won office in 2010 promising to tackle the city’s nationally known murder rate, says he remains “fully committed” to decreasing murders while not neglecting efforts to reduce overall crime in the city.

But the challenge of beating back crime in general remains a sore spot for many residents. “A drop in the number of murders is good,” says Rafael Goyeneche, head of the Metropolitan Crime Commission, but that only reflects one percent of the crime in the city.” Goyeneche says most of the city’s 300,000 residents are not faced with an everyday threat of being murdered, but remain at risk for being victims of other crimes. “Violent crime remains a problem,” he says, such as armed robberies and sexual assaults, “and it shouldn’t matter where you live, we want a city where, ultimately, there is no crime.”

Susan Guidry, chair of the City Council’s criminal justice committee, echoes the crime commission. “I am grateful for the progress we have seen so far, though we face serious challenges in combating violent crime that will continue as long as NOPD remains woefully understaffed.” Guidry has been at the epicenter of efforts to boost manpower at a time when the department is shrinking.

Dr. John Penny, a criminologist at Southern University of New Orleans, calls the ongoing drop in the city’s murder rate encouraging, but stops short of linking the decrease to the mayor’s NOLA for Life program. “I think it’s really hard to make a definitive statement about whether the two things are related,” he says. “When you look at a statistical fall like that you have to look at other variables, such as population shifts. A lot of folks didn’t come back after Katrina. The murder rate was so high after the storm because many returning gang members were trying to reestablish their territories set before the hurricane.

Penny also says murder rates can fall due to changes in victim behavior. “Criminals look for people who are vulnerable. We can see an uptick in activity in the French Quarter, which is widely publicized. Things like that can cause people to not walk alone or to stay out as late, frustrating criminal behavior.” Penny says police statistics should not be ruled out as something affecting the city’s low murder rate. “If someone is shot, but dies later from his gunshot wounds, that may not be classified as a murder.”

Despite local criticism of the police department over crime reclassifications in recent weeks, the department touts the falling murder rate as the result of effective policing. “The progress we’ve made over the past three years is real and remarkable,” says police superintendent, Michael Harrison. The city’s new top cop says long-term crime reduction, coupled with the murder reduction strategy, includes moving desk officers to patrol and deploying reserve officers and creating task forces to tackle crime hot spots.

Targets of the murder reduction plan include the Central City, St. Roch, Behrman and Little Woods communities. Barbara Lacen-Keller, chair of the Central City Partnership, lauds the mayor’s efforts while defending an area she has championed for years. “I think when we talk about crime, we have to understand that there are pockets of crime in certain neighborhoods and I wouldn’t even call them hot spots. So, whether people feel safe or not really depends on where they live in a particular part of town.” She co-founded the partnership 20 years ago, in part, to work with residents to address housing, education, health, crime and economic development issues. “We created the comeback committee,” says Lacen-Keller, dubbed the “Mayor of Central City,” “which was a partnership with officers of the 6th District, to target high crime areas and we lobbied for the creation of the new district police station.”

Projects like CeaseFire New Orleans, a Central City-based murder reduction effort, complement decades of groundwork done to reduce crime in one of the city’s history-filled neighborhoods, says Lacen-Keller. “I support Cease­Fire; this is a program that has had success in Chicago and Boston and I am particularly glad to see that work is being done with boys and girls, especially the work to reach shooting victims while they are still hospitalized to decrease the number of retaliatory shootings that we see in our city.”

West calls CeaseFire, a component of NOLA for Life, “one of the most evidenced-based programs that’s been replicated elsewhere to be effective by involving outreach, violence interrupters, using a risk reduction plan, connecting participants to workforce training, and creating direct intervention.” In 2014, West says, Central City reported a 31 percent drop in shootings, along with a murder tally that fell by 11 percent compared to 2012, when the NOLA for Life campaign got underway. West says the program is on the verge of expanding to schools requesting the effort to reduce student violence.

But shootings in New Orleans remain high, says Penny. “We had 300 shootings last year. I don’t know if that’s because all of these guys are a bad shot or if people are just getting lucky. I can’t explain it—it’s an odd juxtaposition.” West, however, compares the city’s high number of shootings with its reduction in gun deaths to similar phenomena in other major cities. “We see the same thing in New York and Chicago. But our focus, of course, is maintaining the success we’ve experienced in the last three years.”

Portions of NOLA for Life include what organizers dub “call-ins,” where gang members meet with elected officials, law enforcement agents, and various social service providers who extend options other than a life of crime and repeat incarceration. In 2014, West says, 113 gang members or associates enrolled in various education, job training, housing assistance or substance abuse treatment programs. The programs come at no cost to those who choose to leave gang life and stem from public-private partnerships.

“We’re able to create these opportunities thanks to private partners like members of the New Orleans Business Alliance,” West says. “One of our partners is Ochsner Health System, which provides training, at no cost, to program participants interested in learning how to become a medical assistant.” West says commitments to job training and hiring are the lynchpins in helping the program reach success.

Landrieu has likewise hung the success of NOLA for Life on the program’s ability to create jobs. Yet, 52 percent of Black males, of working age, in New Orleans remain unemployed, excluding those who are underemployed or who have stopped looking for work. Landrieu hosted a symposium in December revealing, in part, the obstacles facing Black male job seekers, including figures demonstrating that just half of all Black male job applicants without barriers to employment secure interviews. “We’re keenly aware of this issue,” West says, “and we’re working to create ways to increase employment.”

Still, the city’s drop in gun deaths is well-received. “We’ve been doing this for a long time,” says Lacen-Keller. “So, am I pleased that we are turning a corner? Yes. Do I believe that we have a long way to go? Yes. Do I think that we can do even better than now? Yes. Do I think we’ll ever be Mayberry? No indeed.”

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BVN National News Wire