An Evening of Back-Patting Far from the Bias Reports
When besieged by critics, beat your own drum. Bankers did it last week when 200 financial service company executives convened in Washington to bestow awards on each other for meeting the credit needs of America's low-income neighborhoods.
The idea: Rather than bash banks for lousy lending records to minorities, recognize institutions that are bolstering low-income neighborhoods with money and time, explained Preston Martin, a former Federal Reserve vice chairman who now runs the Social Compact between Financial Institutions and America's Neighborhoods.
The nonprofit group, formed by Mr. Martin and others in early 1990, now claims 140 members, including 50 banks, 73 thrifts, and 14 insurers.
The 10 winners at the first Outstanding Community Investment Awards Dinner included Chase Manhattan Bank, New York; First Fidelity Bancorp., Lawrenceville, N.J.; and Midlantic Corp., Edison, N.J. About 45 companies applied.
Winners were selected partially on the amount of money a company donated to low-income neighborhoods and the institution's personal involvement community groups.
The evening was a welcome change for bankers stung by reports that last year blacks were rejected for mortgages 2.4 times more often than whites.
Role of Volunteers
A Social Compact staffer said the judges did not consider winners' compliance with the Home Mortgage Disclosure Act. "We were looking at what they were doing rather than what they weren't doing."
Chase won its award for committing $150 million to housing and economic development and because 1,700 employees volunteered 155,000 hours. That looks better than its disclosure act report, which revealed Chase rejected 43% of black applicants for home mortgages in 1990, compared with 14% of whites.
Other winners: American Savings Bank, Stockton, Calif.; Home Savings of America, Irwindale, Calif., Fifth Third Bank of Columbus, Ohio; Long Beach Bank FSB, Orange, Calif.; American National Savings, Baltimore; Metropolitan Life Insurance Co., New York; and Allstate Insurance Co., Northbrook, Ill.