NAACP, bank create minority loan program

Bank of America to boost home buying, small-business starts

Finance

Naacp 2000

July 14, 2000|By Meredith Cohn | Meredith Cohn,SUN STAFF

The NAACP and Bank of America announced a five-year, $6 million program yesterday to boost homeownership and small-business development in Baltimore and several other cities.

The program will focus on educating potential borrowers in minority and low- and moderate-income areas. Up to 20 cities are expected to gain access to the fund.

"This alliance is one small step toward helping to create economic empowerment for underserved populations, where there is a lack of access to capital and credit," said NAACP President Kweisi Mfume. "When people can get mortgages and loans for small businesses, they not only improve their lives but also the overall well-being of the community."

Lending in minority and low-income communities has been an issue for the civil rights group for years. This week, Mfume said the organization plans to review records of the nation's banks and call for boycotts of those with poor records.

The new program will be the latest effort to steer money to minorities, long denied loans or targeted for higher rates, according to civil rights advocates. Local NAACP chapters will have access to money for seminars and outreach programs that prepare borrowers for home or business ownership.

Other cities where the program will be launched include Atlanta; Austin, Texas; Columbia, S.C.; and Long Beach, Calif.

"We believe that this grass-roots approach will provide greater homeownership opportunities to the underserved," said Michael H. Dulan, the bank's Community Development Banking president. "The small-business component will not only build small-business ownership but help create jobs."

NationsBank, which merged with Bank of America in 1998, had pledged to make $350 billion in loans to low-and moderate-income individuals and businesses over 10 years. Last year, the bank lent $39.6 billion. Of that, $669.6 million went to Baltimore communities, the bank said.

According to the U.S. Bureau of the Census, a gap remains between white and black homeownership rates, although it is narrowing. In the first quarter of 2000, whites homeownership was 70.7 percent while black homeownership was 47.4 percent.

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