Crisis - The Current State of Black Banking

By: Creative Investment Research, Inc.
June 14, 2011 - PRLog -- Five Black-owned banks have failed over the past 20 months. In August 1989, Congress enacted the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"). Section 308 of FIRREA established the following goals:

• Preserve the number of minority depository institutions;
• Preserve the minority character in cases of merger or acquisition;
• Provide technical assistance to prevent insolvency of institutions not now insolvent;
• Promote and encourage creation of new minority depository institutions; and

An objective review of recent performance based on 308's standards would lead to the conclusion that regulators have failed to preserve the number of minority depository institutions. In 1994, there were 55 Black owned banks and thrifts. By 2010, there were just 34. We will list the survivors and forecast how many Black banks will exist in 2020.

Section 342 of the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act contains a provision creating an Office of Minority and Women Inclusion (OMWI) at various agencies to monitor the diversity efforts of the agencies, the regulated entities and agency contractors. We will estimate the dollar impact OMWI Offices will have on Black banks. In addition, we will discuss our estimate of opportunities likely to result from plans to gradually phase out federal mortgage giants, Fannie Mae and Freddie Mac.

Our Webinar will cover:

1. History: Black Banking in the 80's, 90's and 00's.
2. Rationale: Why Black banks?
3. Customers: The Demographics of Black Banking.
4. Market: The Market for Black Banks.
5. Crisis: The Financial Crisis and Black Banks.
6. Opportunities: The OMWI initiative and Black Banks.
7. What to do now: Why campaigns to get minorities and other consumers in the urban areas to bank with minority banks have not worked. What will work.
8. Future: Which Black Banks will survive and why?
9. Next Steps.

The Webinar will be held on Tuesday, July 26, 2011 at 2pm and will cost $199.00. To reserve, please go to the link below. (Copy and paste into your browser.)

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Creative Investment Research is an investment research and management company. We research and create socially responsible investments and provide investment advisory services. The company was founded in 1989. We are a signatory to the U.N. Principles for Responsible Investment.

On December 22, 2003 and February 6, 2006, we warned the S.E.C. and other regulators that statistical models created by the firm using the Fully Adjusted Return® Methodology signaled the probability of system-wide economic and market failure. This was one of the first warnings issued concerning the credit crisis.

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