National City Bank, redoubling efforts to keep its minority lending activities strong, has announced a series of beefed-up projects and commitments.
"We will maker every mortgage loan in the city of Cleveland that can be underwritten," said David A. Daberko, chairman and chief executive officer of the lead subsidiary of $29 billion-asset National City Corp.
The Office of the Comptroller of the Currency last year gave the Cleveland bank an outstanding rating for activities mandated under the Community Reinvestment Act.
Getting the Word Out
Mr. Daberko said National City's chief challenge is attracting applicants for mortgages. Thrifts, he said, continue to make a majority of home loans in Cleveland.
To increase its visibility in the inner city, National city hopes to finance more than 150 new and rehabilitated homes with a $13.5 million commitment made through the Cleveland Housing Affordable Mortgage Program.
Such efforts have won plaudits from local community groups.
"They're miles ahead of where they used to be," Charles Bromley, director of Metropolitan Strategy Group, said of National City's community reinvestment programs. The group is a statewide coalition of fair housing organizations.
Mr. Bromley said, however, that National City's interior operations can use improvement. The bank has only one black director on its 20-member board. The holding company board also has only one black director out of its 18 members.
Representation among senior lending officers "reflects your leadership at the top," Mr. Bromley observed.
Said Mr. Daberko, "It's certainly our objective to have broad representation of the whole community."
Beyond Legal Requirements
The National City leader said his bank is committed to community reinvestment as a matter of local pride rather than as a requirement of federal laws.
"We want to see these neighborhoods stabilize or improve," he said. "It's serious business around here."
He noted that there's a small increase in the number of people moving into Cleveland, a trend that National City is encouraging. And even though most of the newcomers tend to be older couples of younger people without children, it's nevertheless a hopeful sign, Mr. Daberko said.
To encourage such development, National City plans to lengthen the terms on its unsecured home improvement loans to 60 months from 36 months - and the limits on such loans to $5,000, from $3,500.
It also is helping city officials develop training seminars on community development and small business lending, and has committed a $100,000 equity investment in a micro-lending program for small businesses.
National City Bank made $75 million in residential real estate loans in 1990, with 91% of the dollar volume going to its target community. That was up from 54% in the designated area in 1989.
"The data indicate that National City Bank reinvests a higher percentage of retail deposits into loans in low- and moderate-income areas than it does in more affluent neighborhoods," according to the CRA report filed by the Comptroller's office.
Mr. Daberko said the bank tries to create its own lending programs or work on city programs rather than work in loan consortiums with other lenders.
He said such control also gives the bank a tighter rein over costs. "We have probably made money on our efforts," Mr. Daberko said. The he hedged: "We're break-even on these things, really."