Richmond was once the epicenter of black finance. What happened there explains the decline of black-owned banks across the country.
On April, 3rd, 1968, Martin Luther King Jr. gave his famous “I’ve Been to the Mountaintop” speech in Memphis. In it, he urged African Americans to put their money in black-owned banks. It wasn’t his most famous line, but the message was clear: “We’ve got to strengthen black institutions. I call upon you to take your money out of the banks downtown and deposit your money in the Tri-State Bank. We want a ‘bank-in’ movement in Memphis … We begin the process of building a greater economic base.”
The next day, King was assassinated, and his hope of harnessing black wealth remains unfulfilled. Before integration, African Americans in cities like Richmond, Chicago, and Atlanta relied on black community banks, which were largely responsible for providing loans and boosting black businesses, churches, and neighborhoods. After desegregation, black wealth started to hemorrhage from these communities: White-owned banks were forced to open their doors to African Americans and the money that once flowed into black banks and back out to black communities ended up on Wall Street and other banks farther away.
“We started to lose a lot of our businesses and support for our businesses,” says Michael Grant, president of the National Bankers Association, a trade group representing nearly 200 minority and women-owned banks across the United States. “That was the toxic side of integration.” The financial meltdown of 2007 wiped out 40 percent
of African American wealth in the United States, killing off many of these already-struggling community banks (they were not part of the big Wall Street bailout). Tri-State Bank in Memphis still exists, but it’s among the few that survived. Only 25 black-owned banks remain in the United States, according to the latest data from the FDIC
, compared to 45 a decade ago. At their height, there were more than 100, says Grant.
Wall Street jobs aren’t what they used to be. It’s not as though investment bankers and hedge funders are sinking into the upper middle class, God forbid. They’re still getting rich, really, super-rich, even. But not everyone who steps into a bank gets a mega-paycheck and big bonus anymore, and the days of the bottomless expense count, martini lunches and steak dinners, and the automatic house in the Hamptons with a Maserati in the driveway are long in those Italian rearview mirrors.
The easiest way to make a quick buck on Wall Street these days seems to be through loose lips. On Tuesday, a whistle-blower who once worked for Monsanto walked away with a handsome payout for alerting regulators to accounting improprieties within the company, according to Reuters. Regulators will reportedly award the former executive with $22 million in connection with the $80 million settlement agreement Monsanto made with the S.E.C. over an incentive program the company ran to promote its trademark weed killer, Roundup.
The $22 million payout is the second-highest sum the S.E.C. has given so far to a whistle-blower, behind a $30 million award paid in September 2014. The regulatory agency enacted a program to sweeten the idea of reporting impropriety in 2011, as part of the Dodd-Frank reforms. With between 10 and 30 percent of penalties or settlement agreements made with the government on the line, Wall Streeters and company insiders have all but lined up to tip off the S.E.C. Between September 2014 and September 2015 alone, the agency says 4,000 people forked over information, and more than 30 of them have pocketed a collective $85 million over the last five years.
Civil Rights Groups File New Evidence of Housing Discrimination in Federal Complaint Alleging Neglect of Foreclosures in Communities of Color.
WASHINGTON, Aug. 31, 2016 /PRNewswire/ — Today, the National Fair Housing Alliance (NFHA) and nine local fair housing organizations filed an amended discrimination complaint against Bank of America (BoA). The complaint alleges illegal discrimination by BoA in African American and Latino neighborhoods in six additional cities. This new evidence of discriminatory treatment by BoA will be added to the federal Fair Housing Act complaint on file with the U.S. Department of Housing and Urban Development. Furthermore, NFHA and the nine fair housing organizations added new evidence to their existing claims. The six additional cities are: Columbus, OH; Gary, IN; Minneapolis, MN; Newark, NJ; Tampa, FL; and neighborhoods in suburban Detroit.
NFHA and the nine fair housing organizations investigated an additional 399 Bank of America foreclosures and found that BoA continues its failure to properly maintain foreclosed properties in African American and Latino neighborhoods. This new evidence formed the basis of the amended complaint. The complaint is now comprised of evidence from 1,267 BoA properties in 30 metropolitan areas and 201 cities throughout the United States.
Appearing on ESPN 710 Seattle, Sherman said that if he were the President of the United States, he’d know of at least one way to get the country out of debt: Make the rich people who profit from football pay for the stadiums, not the taxpayers.
“I’d get us out of this deficit,” Sherman said. “I’d stop spending billions of taxpayer dollars on stadiums and probably get us out of debt and maybe make the billionaires who actually benefit from the stadiums pay for them. That kind of seems like a system that would work for me.”
The effects of the Great Recession may be receding, but many Massachusetts homeowners remain underwater. The number of foreclosures is rising, and that trend is expected to continue.
The reason, experts say, is a backlog of old foreclosures that were stalled due to a state law that are only now proceeding. But advocates for homeowners say the state is also not doing enough to help struggling homeowners.
Elyse Cherry, CEO of Boston Community Capital, which invests in affordable housing in low-income communities, was part of a 2014 task force that made recommendations to state government to address foreclosure impacts. “The fact that they haven’t been implemented at all speaks to the current interest of state government in terms of dealing with it, and the fact that as a country we have moved on,” Cherry said.
The Securities and Exchange Commission is offering a reward to the whistleblower that revealed a scheme at First Mortgage Corporation that involved several of the company’s senior executives lying about the performance of the mortgages the company originated, re-securitizing them, and defrauding investors out of $7.5 million – if in fact there is one.
Earlier this year, the SEC fined First Mortgage and the company’s chairman and CEO, president, and chief financial officer, and other executives a total of $12.7 million for pulling current, performing loans out of Ginnie Mae mortgage bonds by falsely claiming the mortgages were delinquent in order to sell them at a profit into newly-issued residential mortgage-backed securities.