Georgia legislators should approve a law requiring banks and savings and loans to lend in all segments of their communities, the state banking commissioner said Friday.
"The state is going to have to do more," said Commissioner Jack Dunn. "I don't think there's any question we're going to have to pass a community reinvestment law in the state. I've talked to a number of the legislators. Without any question, we'll do that."
Dunn was responding to articles this week in The Atlanta Journal- Constitution. The articles described how deposit-gathering institutions rarely make home loans in black or integrated areas, and rarely make Small Business Administration loans to minority-and women-owned businesses in metro Atlanta.
Also Friday, 40 protesters marched through the downtown lobby of Trust Company Bank, shouting, chanting and praying to protest bank lending practices. Most were members of the Association of Communities Organized for Reform Now (ACORN).
"If you got any money in here, get it out," Martina Barnes shouted into a megaphone. The 72-year-old black retired schoolteacher jabbed her cane in the air as she led a chorus of "We Shall Not Be Moved."
The demonstrators marched in the front door, through the teller lobby, back to the front hall and out.
They demanded a federal investigation by bank regulators of lending practices in Atlanta, a 90-day freeze on acquisitions or mergers by Atlanta banks, specific lending goals for minority and working-class neighborhoods, and public hearings in the neighborhoods. Several protesters also handed out brochures for the "Justice for Janitors" campaign for higher wages.
The bank protesters picked Trust Company "because it seems to symbolize the Atlanta banks," said ACORN organizer Grant Williams.
Trust Company employees watched the procession in stony silence. Executive Vice President Wade T. Mitchell had no comment.
At the Capitol, the comments by Commissioner Dunn came after several black legislators requested to meet with him. Dunn said the meeting would be arranged next week.
Dunn also said his office would try again in the next legislative session to gain authority to regulate mortgage companies. He cited the case of James Fletcher, whose experience was described in Sunday's Journal-Constitution. Fletcher went to a mortgage company for a $5,000 loan, but his 27 percent interest rate added up to a bill for $30,700.
"The word is unconscionable," Dunn said. "I think the free market should be allowed to set interest rates. But at some level - 27 percent is above that level - you have to look at whether it's unconscionable."
The prospect of a state version of the federal Community Reinvestment Act was received coolly by industry spokesmen.
"I think it's redundant," said Joe Brannen, executive vice president of the Georgia Bankers Association. "We already have the provision that applies to every bank at the federal level, and there's no need to do it at the state level."
"I think there are probably ample rules and regulations on the books that take care of this problem," said Grady Perry Jr., president of the Georgia League of Savings Institutions.
Both spokesmen said financial institutions were pained by the Journal-Constitution articles.
"They are concerned about the image that this projects," Perry said. "I think some of the institutions are not aware of opportunities to make money in these areas that appear to be underserved."
"I think it gives banks a chance to tell the whole story about what they do in the community," Brannen said. "I think the articles were fair, because you reported our numbers. But I think it was a little unclear: To conclude that the banks are racist is not true."
The Georgia Bankers Association is holding its annual convention this weekend in San Diego. Brannen said he didn't think the lending articles would be discussed.Go to the next article or back to the Color of Money index or Power Reporting
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