Is it a new beginning or a repeat of embarrassing history?
These are tough economic times for opening new banks, new credit unions, or new savings and loans, particularly in any economically depressed community. And so I watched with great interest upon hearing that a new community bank will be chartered in North Minneapolis.
I was surprised and delighted to learn, when I saw the documentation, that this would be a Black bank in the Black community, a bank that the prospectus indicates will “allow Northside residents to become bankable and, as the bank increases its capacity, residents would gain access to additional financial resources.” What could be more welcome?
Minneapolis-based Thrivent Financial is the source of unquestionable community enthusiasm, as they have offered a $500,000 challenge grant to the Urban League of Minneapolis. For this to become reality, the Urban League must match the $500,000 with its investors.
I have learned that the project is in the feasibility stage, and that Thrivent is also supporting a consultant to assist in the development of the project in order to help ensure the raising of capital for the bank.
Like me, I’m sure alert readers are asking the obvious key question: How much capital above the $1 million ($500,000 plus $500,000) must be raised to guarantee the solvency of this bank when it opens its doors? $10 million? More? Less?
I look forward to the public information meetings introducing the project and its investors, to learn of their fiduciary strength and fiduciary reputations.
Certainly the organizers are doing everything they can to show the community has rallied behind this concept and embraces the creation of this new bank.
What discerning readers and I want to know is what is in The Plan to prevent a repeat of the history of the last Black bank in North Minneapolis.
In the 1970s, the last time the Black community of the Twin Cities was told they controlled and owned a Black bank, it turned out to be quite an embarrassment when it was uncovered that the Black bank on Plymouth Avenue was neither Black-owned nor Black-controlled, but loaned Black money to White borrowers before it went under.
Thus, I’m sure we all want to know more about this new bank’s capitalization and want to hear what steps will be taken to ensure that those who put their life savings into the trusted hands of the bank’s investors will have those savings protected by more than just the FDIC.
The community survey is being done by citizens being paid $60 to do so, as they were doing the evening of November 19 at 2210 Oliver Avenue North.
The MUL states that “the creation of this bank and the relationships that will develop with the public and private sectors will offer a great opportunity to develop a home ownership model together.” But in light of a very troubling and fragile housing market, not to mention what has taken place in the sub-prime market, what will state and federal regulators announce they will do to make sure that all of the needed safeguards are in place and that all the right questions and answers are addressed?
As a member of the Minneapolis Urban League, another question arises, that about membership liability. As I review the documentation, I am not able to determine when the membership reviewed and approved The Plan by vote of the membership. Do we members have a fiduciary responsibility/liability in the creation of this new bank if something goes wrong?
It is one thing to pay people to undertake a survey and saying this is the best idea since buttermilk. It is another to ask the membership of the Urban League to take the consequences for the MUL investors if this financial bubble should pop and deflate what appears to be a dream.
All members of the community are also eager to hear from our elected officials about their commitment to be among the first depositors in the new bank, to the tune of millions of dollars each from the City of Minneapolis, Hennepin County, the State of Minnesota, and certainly from the federal government, just as they now all do with White banks.
And, word is eagerly awaited about such deposit commitments from corporate Minnesota of some of their monies to be placed in the new bank. It is only then, when all of these players commit and deposit, that you can talk in terms of the rejuvenation of a economically long-suppressed community.
Stay tuned as the wait begins to hear about the final plans.
Ron hosts “Black Focus” on Channel 17, MTN-TV, Sundays, 5-6 pm. Formerly head of key civil rights organizations, including the Minneapolis Civil Rights Commission, he continues his “watchdog” role for Minneapolis. Order his books at www.BeaconOnTheHill.com; hear his readings and read his solution papers and “web log” at www.The MinneapolisStory.com.