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The Color of Money

Day four, article one

Bank protesters in Atlanta
make ready to flex muscle

By Bill Dedman, The Atlanta Journal-Constitution

Published May 4, 1988, Page A1

Copyright 1988, The Atlanta Journal-Constitution

One summer day in 1986, more than 700 residents of minority and working-class neighborhoods across the country invaded the American Bankers Association headquarters in Washington. They chanted, "2-4-6-8, we know you discriminate!" Eight protesters stormed the executive offices and were arrested.

One fall day in 1987, a dozen residents of minority and working-class neighborhoods in Atlanta stood silently in front of Georgia Federal Bank on Marietta Street. They had intended to wrap a red ribbon around the bank and chant about how banks didn't make loans in their neighborhoods -- redlining them -- but they didn't bring enough ribbon. They demanded a meeting with the bank president, who didn't come out, so they left.

Bank protesting in Atlanta hasn't quite come of age, but it is growing. Two national community coalitions, with years of experience protesting and negotiating with bankers, are training neighborhood groups here. A dozen protesters from Atlanta attended a training session last weekend in Washington, where they debated bank regulators and joined in protests at several government offices and the home of Samuel Pierce, secretary of housing and urban development.

Atlanta banks are bracing for the storm. Trust Company Bank spokesman Willis Johnson has distributed an article by one group's national organizer. Marked in yellow is a quote from Mao Tse-tung:

"Deception is not enough -- the enemy's leaders must be confused; if possible, driven insane."

Johnson said, "You have to wonder about a man's politics when he quotes from the `Little Red Book.' "

That has been the first response in other cities where community pressure has been applied. Bankers point out that activists talk of "pulling off" a bank challenge the way robbers talk about a heist.

However, when banks have yielded to demands for more loans, they sometimes have been surprised by the results.

Three Chicago banks have made more than $85 million in loans under agreements with community groups, and reported not one default in four years.

"We have learned that it is possible for a bank to expand its community reinvestment activities safely and moderately profitably," said Richard Hartnack, senior vice president of First Chicago Corp.

In Cleveland, Ohio, "we learned some very important and admittedly surprising lessons," said John Kolesar, president of AmeriTrust Development Bank. "We learned that it was not necessary to dilute the bank's credit standards in order to approve these loans. And we discovered that the market for credit in these areas was much greater than we had anticipated."

As demonstrated by The Atlanta Journal-Constitution study of lending, banks and savings and loans rarely lend money in Atlanta's black and integrated neighborhoods.

While there is a federal law saying banks have an affirmative obligation to serve all of the community, federal regulators acknowledge that enforcement has been less than comprehensive.

So community groups depend on local pressure.

Their agenda in Atlanta:

-- Request the banks to include all neighborhoods in their normal lending programs for home and business loans, and to change loan policies that they believe discriminate against minority, working-class and older inner-city neighborhoods.

-- Ask the banks to set up special programs to help lower-income neighborhoods. The groups say a $10 million pool, debated for six months by Atlanta's largest banks, would be a start. They suggest $100 million a year.

-- Invite the banks, insurance companies, foundations and local governments to support housing efforts and help spawn others, such as a development corporation planned by Fulton County.

-- Appeal to Atlanta city officials to keep city deposits out of banks with poor lending records.

-- If all else fails, picket to encourage depositors to pull money out of banks.

Most neighborhood leaders say they are not accusing bankers of being racist.

"None of these people I've met are racist," said the Rev. Craig Taylor, a Southside non-profit housing developer and a director of the Atlanta Community Reinvestment Alliance, one of the two local organizations challenging banks. "None of them is your stereotypical hardhearted banker. I have never met a group of people with more honesty and integrity and good hearts than bankers in Atlanta.

"But, institutionally, the banks have been across-the-board clearly unresponsive to the city's major problems, they have tended to define those problems in their own self-interest, and they have tended to give nothing more than paternalistic appeasement to keep poor people and minorities in their place, to keep them corralled and isolated and controlled."

`Bank-ins' around the city

The first steps on the route from redlining to reinvestment were taken in 1970 on the northwest side of Chicago, when an angry Italian walked into the office of a Methodist minister.

``He said his son went down to the bank and couldn't get a loan 'cause of where he lived," said Shel Trapp, the minister. "So we went over to see the bank and they said, `Of course we don't make loans in that neighborhood. It's a slum.' They weren't as careful about what they said back then."

Trapp, the baldheaded minister who quoted Mao, looks and acts more like a middle linebacker for the Bears. He huddled the members of his neighborhood group and rushed to the bank for a "bank-in."

They opened up their penny banks, took the pennies down to the bank, and changed them into dollar bills. Then they changed them back to pennies. Then they changed them into dollar bills . . . .

"We tied up the lobby half the day," Trapp remembers. "That afternoon we got a meeting with the board of directors of the bank. They agreed to make $4 million in mortgage loans in our neighborhoods, $4 million in home-improvement loans, and they gave $1,000 to our group. We thought that was the end of it, but other groups called us and we started bank-ins around the city."

On the West Side of Chicago another juggernaut was gaining power. It took the form of Gale Cincotta, a housewife and mother of six. She became a community organizer in the 1960s as a PTA mother upset that her children's West Side schools didn't get their share of city money. Then she found that Chicago's banks were accepting deposits from her neighborhood, but not making loans there.

"When we said, `Why aren't you in our neighborhood?' we were really paying the banks and savings and loans a compliment. We want them in our neighborhoods. They didn't take it as a compliment," Mrs. Cincotta said.

Trapp and Mrs. Cincotta combined forces.

They stood in front of the banks in Chicago's Loop using a megaphone to lead residents in chants. They tried to dock a houseboat at the city's convention center during the American Bankers Association convention. They led a parade of school buses full of residents to the suburban Chicago homes of bank presidents, including the president of the association.

"Gale and the banker were out front shouting at each other while the neighborhood women were taking their kids around to the back door asking to use the bathroom, and the banker's wife was letting them in. So here they go tramping through the house," Trapp said.

Congress gets in the act

By 1975 neighborhood groups had won congressional approval of the Home Mortgage Disclosure Act, which required banks to tell where they made home loans.

But releasing the numbers didn't end redlining, community groups said, so they went back to Congress. In 1977 they won approval of the Community Reinvestment Act, which for the first time said banks and savings and loans have "an affirmative obligation" to serve all segments of their communities.

Use of the law by community groups, particularly to stall bank mergers, has led to lending agreements in many cities.

"You're starting to see communities come back to life on the West Side of Chicago," Mrs. Cincotta said. "The decline has stopped. The neighborhood has hope. The banks are starting to see it as a good place to do business. Properties are going back on the tax rolls. The city is putting in sidewalks and curbs. It has this kind of snowball effect."

Through the years protesters and bankers around the country have built up some understanding, possibly even some mutual respect. The community groups have worked with bankers to implement lending agreements; they hold training sessions for regulators. They even invited bankers to their national training session last fall on "how to beat the banks."

"Banks are never going to admit they redline," said Tom Schraw, a Cincotta-Trapp disciple at their National Training and Information Center in Chicago. "What happens eventually is that we get past that debate and move toward agreement on an action-oriented program. You can look back a year or two later and the numbers (of loans) have gone up. Whether that's because they're doing something new, or because they stopped doing something they were doing doesn't matter. What matters is that the numbers go up."

Showing off the neighborhood

One of the most effective techniques, community organizers said, is to rent a bus. "What we've found is the best thing," Mrs. Cincotta said, "is to drive them, the bankers, around the neighborhoods so they can see that there are good houses. We do not want them to make bad loans. You build that trust one step at a time."

"The culture that bankers live in is so different from the culture that low-income and minority people live in," said Jane Uebelhoer, Washington legislative director of ACORN (Association of Communities Organized for Reform Now). "That gap has to be bridged."

Now ACORN and the Chicago organization, the National Training and Information Center, are working in Atlanta.

Elena Hanggi, the former national president of ACORN, has been to Atlanta several times this spring to help its local chapter organize residents against the banks.

From the National Training and Information Center, Trapp has been advising the Atlanta Community Reinvestment Alliance (ACRA), which is seeking increased lending by banks in Atlanta. The alliance filed an unsuccessful protest with federal regulators last fall against SunTrust Banks, parent of Trust Company, and negotiated several changes in loan programs and depositor services at Georgia Federal.

After meeting with ACRA, Georgia Federal agreed to provide home-purchase loans at lower interest rates in inner-city areas, financial counseling for potential homebuyers at inner-city branches, and low-cost money orders at three southwest Atlanta branches.

When ACORN showed up at Georgia Federal, the bank refused to meet, saying it was already negotiating with ACRA.

The groups have different approaches. ACRA criticizes ACORN for the paltry protest at Georgia Federal; ACORN claims ACRA members are too eager to accept a few loans.

And they have different constituencies. ACRA claims ACORN has too little business savvy to command respect from the banks; ACORN claims ACRA is just a bunch of white liberals with no community base.

Still, they agree that minority and lower-income neighborhoods need to be organized. "My agenda is to build power in these communities," Trapp said. "Kicking ass is power."

Bankers are getting ready.

But in the pamphlet where Trust Company's Johnson marked the quote from Chairman Mao, he missed a line. Trapp espouses the "fun" of having poor residents go to a banker's house and have a redlining party by throwing red crepe paper in the yard.


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