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The Color of Money

Follow-ups and reaction

Black boycott forestalled by loan plan

Negotiations with ministers,
publicity spur bankers to act

By Bill Dedman, The Atlanta Journal-Constitution

Published May 15, 1988, Page A1

Copyright 1988, The Atlanta Journal-Constitution

Atlanta's leading black ministers were poised to move the masses, ready to call from the pulpit today for a boycott of white-owned banks and savings and loans.

Their goal: to protest unequal lending and customer services to the black community.

Their leverage: the Concerned Black Clergy of Atlanta, the Southern Christian Leadership Conference (SCLC), the Georgia Missionary Baptist Convention -- at least 861 churches, at least 500,000 members, millions of dollars in the bank.

A phone list was ready, and calls were to have gone out to all ministers on Saturday.

But on Friday, nine Atlanta banks and savings and loans announced $65 million in home loans at low interest rates, mostly in black neighborhoods on Atlanta's Southside. And the city's three largest banks will start taking applications for home loans in Southside branches and keeping the offices open on Saturdays like Northside branches.

It wasn't a coincidence.

In the Atlanta tradition of public confrontation but private negotiation on racial concerns, the white bankers and the black ministers were talking behind the scenes. Messages between the banks and the churches were passed back and forth by the city's black politicians, particularly City Council President Marvin Arrington.

"Marvin told us that the preachers said last week that this is a problem, and he didn't want them to have to say this Sunday that people should boycott," one banker said. "He said he was holding a press conference at 10 a.m. Friday and hoped we'd all be there. We all came."

"The parishioners were putting pressure on us, and some of them were already moving their accounts and asking if the church had money in the white folks' banks," said the Rev. Tim McDonald of the SCLC. "You would have had ministers going in their pulpits Sunday saying, `All of you with individual accounts, shift them; all of you with business accounts, shift them; the church accounts, shift them.' " Some bankers reluctant

Some bankers were reluctant to make changes, and even those in front of the pack were reluctant to make an announcement. They said they didn't want to appear to give credence to reports in The Atlanta Journal-Constitution that ignited the protests. Using the lenders' statistics, the newspaper reported that banks and savings and loans make five times as many home loans to whites as to blacks of the same income, and most lenders make services more accessible to white areas than to black areas.

"We're talking about human beings here who got a wake-up call," a bank official said. "The most painful thing was not reading the paper but hearing the vitriolic attacks from political people claiming deep-seated racism."

Bankers had expected the publicity -- they had known since October the newspaper was checking the loan records. But the national publicity surprised them -- Newsweek, the "Today'' show -- all only two months before the Democratic National Convention comes to town.

Still, several bankers said they thought the storm would pass after the first week. It did not. The local president of the National Association for the Advancement of Colored People called for a boycott, the American Bankers Association decided it would be best to cancel scheduled testimony by Atlanta bankers before congressional committees on other matters, the Justice Department said it would at least look into bank loan practices, protesters picketed a meeting of federal regulators, among other actions.

Banks also had to deal with questions from employees. First Atlanta Bank and Citizens and Southern Bank (C&S) sent special bulletins to employees.

"We do not redline," wrote Raymond Riddle, president of First Atlanta. "However, to ignore any constructive points that were made in the series would be irresponsible." `Preachers . . . have clout'

All the time, banks kept an eye on the churches.

"You can have protests and get 10 people to march around and they're an annoyance, but with the preachers you're talking about some of the best communicators in the world," a banker said. "They can capture the issue. And they have clout."

On Monday, Riddle asked the black member of his board of directors, contractor Herman J. Russell, to schedule a meeting at First Atlanta with Arrington and Mayor Andrew Young.

Arrington says he did not seek any admissions of discrimination.

"They knew they had done wrong," Arrington said. "Why go in and beat up on a guy who's already lying down on the ground? You don't have to kick him. You extend him a brotherly hand."

Riddle came to the meeting with a draft of his bank's new lending program, but he did not plan to announce it. Perhaps an ad in The Atlanta Daily World, the black newspaper, and quiet contacts with black ministers and real estate agents, but nothing more.

Bankers said Arrington pushed for immediate and public commitment.

"When the banks have a problem with us, they always pick up the phone and call us. Now we wanted a quick answer," Arrington said. Invited other banks to join

First Atlanta agreed to move quickly, but first it had to abide by the rules of the banking fraternity, where grandstanding is not allowed. On Tuesday morning, First Atlanta leaders called a meeting of the other major banks to outline its program and give them an opportunity to go along. Each bank had until a second meeting at 4 p.m. Thursday to respond.

At that second meeting, C&S, which had already met with Arrington, said it was ready to announce a $25 million program, five times what it had been planning before this month. Trust Company made a $10 million commitment to its special lending program, which in the past few years had made few loans. And a moribund consortium of nine lenders was reborn.

"Thank goodness for the Macintosh Desktop Print System," one banker said.

Arrington said he did not bargain away long-term issues of fairness for a short-term pool of money.

"If this was meant to appease us, then I categorically reject that offer. We are going to work on a comprehensive program. We have a committee set up to do that. But we wanted the banks to put something on the table now to show their good faith. I was afraid there would be some retaliatory action."

Most black leaders responded to the new programs with restrained enthusiasm, calling them a first step.

But at least one leader of the black clergy rejects that notion.

"In 1988 it's too late for a first step. They didn't just start redlining the black community," said the Rev. Cameron Alexander, leader of the Georgia Missionary Baptist Convention, the largest black organization in the state. "The black community has not yet presented its proposal for the banks to respond to -- a statewide proposal. If it's happening in Atlanta, it's happening all over the state. I don't want this to be swept under the rug."

The black clergy will meet again this week to discuss calling for more business loans to blacks, more blacks on bank boards, more blacks in executive positions, more black vendors hired, more branches in black areas.

"The announcements removed the boycott threat for now, but a lot of people still are insulted," McDonald said. "I know of 10 or 15 churches that have moved their building funds already. The rest of us will watch and see what else the banks do."


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Reprinted with permission from The Atlanta Journal and The Atlanta Constitution. Further reproduction, retransmission or distribution of these materials without the prior written consent of The Atlanta Journal and The Atlanta Constitution, and any copyright holder identified in the material's copyright notice, is prohibited.


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