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Blacks Least Likely to Get Business Loan from Banks

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Ron Busby urges personal relationship with banker (Courtesy Photo)

Ron Busby urges personal relationship with banker (Courtesy Photo)

 

By Freddie Allen
Senior Washington Correspondent

WASHINGTON (NNPA) – Black-owned businesses face tougher challenges than other groups when seeking bank loans, according to a new study by the Gallup polling company commissioned by Wells Fargo.

Nearly half (47 percent) of Black-owned businesses operate in the South and the study found that 77 percent of Black business owners use personal cash to finance their businesses.

African-American business owners were less likely to borrow money for business reasons than Asian and Hispanic business owners.

“Twenty-two percent of African American business owners say they felt that discrimination from a financial institution based on their race, ethnicity, gender or sexual orientation had impacted their chances to obtain credit for their business,” stated the report. “Among those who indicated they needed credit, African American owners, in particular, say they were not able to get all the credit they needed.”

According to the report, 13 percent of Black business owners obtained the credit they needed, compared to 20 percent for Hispanic owners, 24 percent of Asian owners and 23 percent of owners in general.

The report also found that the larger the loan request, the higher the rejection rate. Overall, 27 percent of applications for larger loans were turned down and only 7 percent for smaller ones.

The highest rejection rate – 38 percent – was among Black business owners seeking a loan of at least $250,000; 17 percent of Blacks seeking a loan less than $50,000 were rejected. By comparison, 33 percent of Asian owners were turned down for larger loans and 14 percent for smaller ones. For Latino business owners, the rejection rate was 26 percent for large loans, and 15 percent for smaller ones.

Once banks declined a loan to Black business owners, they needed they were more likely to apply for credit again than other small business owners.

In a statement, Lisa Stevens, the head of Small Business for Wells Fargo, said that serving diverse communities has long been a focus area and priority.

“For this reason, we commissioned the Gallup study, which gave us new insight into the perceptions and experiences of diverse business owners working with banks, and how we can improve as a company and as an industry,” said Stevens.

In an interview, Ron Busby, president of the U.S. Black Chambers, Inc., said there is some good news amid the bad.

“If we’re being successful with the limited amount of resources that we have today, our future looks wonderful,” said Busby. “I think for Black businesses to be successful, they need to go in proactively. They need to have established relationships with their bankers early on before there’s an opportunity.”

Busby continued: “When they’re first thinking about starting a business, they need to start a relationship with their banker.”

In an effort to address some of the challenges affecting minority business owners related to the lending industry, Wells Fargo committed to a four-point plan that includes more education and credit coaching for borrowers and $75 million in grants and investments in micro-lending programs aimed at diverse business communities.

“We know that in order to address the range of financial needs within all of our communities, we need to support and work with the ecosystem of organizations that serve small businesses,” said Jon Campbell, executive vice president, government and community relations for Wells Fargo, said in a statement. “Through this increased investment and connections with community lending organizations, we are making meaningful strides toward increasing access to capital for small businesses, as well as helping more business owners get the coaching and educational resources they need to succeed financially long-term.”

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Activism

OPINION: Are We About to See the Permanent Exclusion of Most Black People from Construction Jobs in Oakland?

How is that possible in this city that is believed by the world to be very progressive? Most of the work goes to members of the construction unions that have historically and currently excluded Black people through a complex set of membership requirements.

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The City Council established a task force to discuss the racial issues involved in construction and the possibility of a Project Labor Agreement. The task force included some community members, including the publisher of the Oakland Post, and was mandated to address racial discrimination first.
The City Council established a task force to discuss the racial issues involved in construction and the possibility of a Project Labor Agreement. The task force included some community members, including the publisher of the Oakland Post, and was mandated to address racial discrimination first.

By Kitty Epstein

For decades Black people in Oakland have obtained 9% or less of the work hours on publicly funded construction projects. So…for jobs that are paid for by all of our tax dollars, Black residents, who make up 23% of Oakland’s population, get only 9% of the relatively well-paid work doing construction.

How is that possible in this city that is believed by the world to be very progressive? Most of the work goes to members of the construction unions that have historically and currently excluded Black people through a complex set of membership requirements.

Nationally, only 7.2% of the carpenters’ union members are Black; 8.3% of the electricians’ union members and so on. The City of Oakland has done two very thorough reports of these racial equity issues. You can find this important information at the end of this story.

But the leadership of the construction trades now insist that that they should obtain an even larger portion of the construction hours and that this practice should be set in stone by something called a Project Labor Agreement. It is now being inaccurately called a “Community Workforce Agreement,” which is nonsense because it doesn’t help the community.

Why would progressive Oakland consider giving exclusive benefits to organizations that practice well-documented racial discrimination? At least one part of the reason is that the construction unions spend enormous amounts of money on Oakland elections. They were instrumental in former City Councilmember Desley Brooks’ defeat in District 6, for example, because they did not consider her sufficiently compliant with their demands.

The City Council established a task force to discuss the racial issues involved in construction and the possibility of a Project Labor Agreement. The task force included some community members, including the publisher of the Oakland Post, and was mandated to address racial discrimination first.

The community members proposed that the entire task force work collectively throughout the process of making proposals and negotiating solutions. The City rejected this proposal and began meeting with the building trades alone, saying that they would return with a proposed Project Labor Agreement, although there has been no demonstrated change in the racial exclusivity practiced by the construction trades.

This is outrageous on three levels:

  1. These are the tax dollars of Black residents, as well as others.
  2. The community’s interests in racial justice have not been resolved in any policy venue.
  3. The community belongs at the table throughout whatever process takes place.

The usual arguments for labor/employer negotiations do not apply. The construction unions are NOT city workers. If they were city employees, they would have both the rights (negotiations) and the responsibilities (non-discriminatory hiring) of the city. Since they are not held responsible to Include Black people in their organizations, they should not have the right to exclusive negotiations about anything

I am hopeful, of course, that the City will reject the continuation and expansion of racial discrimination policies practiced by the leadership of the trades unions and will insist on the drastic changes necessary for Black people to obtain 23% of the work hours they are due by virtue of their proportion of the population and tax dollars contributed.

These two documents below provide information that is both illuminating and horrifying.

Oakland Equity Indicators: https://www.oaklandca.gov/projects/oakland-equity-indicators

Disparity Study – https://www.postnewsgroup.com/disparity-study-examines-patterns-of-discrimination-seeks-remedies-for-city-practices-of-selecting-contractors-in-construction-goods-and-services/

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Activism

The California Department of Aging: There Is Help for Elder Californians

Part of the statewide plan for addressing the Black elder community is to partner with ethnic media organizations to spread the word about the resources that are available to Californians in the advanced phase of their aging process. DeMarois, much like Nevins, acknowledged that a large portion of the state’s plan to reach Black elders is through local churches.

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Sharon Nevins, director of San Bernardino County’s Department of Aging and Adult Services, Cheryl Brown and CDA Director Susan DeMarois talk to a group of community members. CBM staff photo.
Sharon Nevins, director of San Bernardino County’s Department of Aging and Adult Services, Cheryl Brown and CDA Director Susan DeMarois talk to a group of community members. CBM staff photo.

By Aldon Thomas Stiles California Black Media

The St. Paul African Methodist Episcopal Church’s Commission on Social Action held a community meeting on aging last Thursday in San Bernardino with representatives from the California Department of Aging (CDA) and the Bernardino County’s Department of Aging and Adult Services.

Held in the sanctuary, the discussion featured state representatives and Social Action Commission members led by former Assemblymember and Commission Chair Cheryl Brown, who represented the 47th Assembly District in San Bernardino County from 2012 to 2016.

Brown spoke with community members and leaders from San Bernardino and Riverside counties about programs and resources available for elderly Californians and the caregivers who look after them.

“The state has set aside millions of dollars to help older Californians have a better quality of life through the Master Plan for Aging. And caregiving is fourth of the five goals established in the state’s Master Plan for Aging,” Brown told California Black Media.

CDA Director Susan DeMarois also attended the meeting.

CDA administers programs that serve older adults, adults with disabilities, family caregivers, and residents in long-term care facilities throughout the state. It has a $450 million budget and according to its Strategic Plan, CDA’s first objective is to advance Gov. Gavin Newsom’s California Master Plan for Aging.

Newsom’s master plan was introduced as an executive order in the summer of 2019. Conceptualized as a five-point plan, its framework encompasses housing, health, equity, caregiving “that works” and affording aging.

According to DeMarois each point of the governor’s master plan has its own budget and will be implemented over the next eight years.

During the meeting — titled “Lunch, Listen and Learn” — community members expressed their concerns and suggestions specifically regarding how to take care of elderly Black people in the Inland Empire. A major theme of the discussion was ensuring familiar (traditional) modes and channels of communications that were being employed to reach Black elders.

Sharon Nevins, director of San Bernardino County Department of Aging and Adult Services, spoke about ways in which the county has been involved in addressing those concerns.

“We have staff out there in the community, putting information in hands,” said Nevins.

Nevins emphasized the significance of Black churches and their unique influence on Black elders in California.

“We definitely reach out to the churches. We’ve always done that,” Nevins said.

DeMarois hailed San Bernardino as a model for the rest of the state because the city has been “meeting the needs of the whole person.”

According to the Center for Disease Control (CDC), California was tied with Hawaii in 2019 for the states with the nation’s highest life expectancy at an average of about 81 years.

Riverside County has a life expectancy of 80.3 years and San Bernardino County has a lower expectancy at 78.8 years.

Part of the statewide plan for addressing the Black elder community is to partner with ethnic media organizations to spread the word about the resources that are available to Californians in the advanced phase of their aging process.

DeMarois, much like Nevins, acknowledged that a large portion of the state’s plan to reach Black elders is through local churches.

“It’s multi-pronged,” said DeMarois. “We know in the Black community faith is a proven path.”

One of the organizations mentioned during the community meeting – an organization that DeMarois claims she took note of – is the Inland Empire Pastor’s Association.

DeMarois expressed the need for the state and local agencies to implement “coordinated strategies” to approach challenges facing the state’s aging population.

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Activism

Alameda County Grand Jury Report Cites Probate Conservatorship Cries Out for Reform

Alameda County needs a radical transformation in the way legal defense services are provided, said Venus Gist, a ‘Shout Out Justice’ advocate. “As things now stand, these services almost always result in a conservatorship being granted. There are no trials. No appeals. Less restrictive alternatives are not seriously explored,” she went on.

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Probate Advocate Venus Gist says, “Alameda County needs a radical transformation in the way legal defense services are provided.”
Probate Advocate Venus Gist says, “Alameda County needs a radical transformation in the way legal defense services are provided.”

By Tanya Dennis

Last week, the Alameda County Grand Jury released its final report on the Alameda County Probate Court and found numerous deficiencies that have been criticized by probate reform groups for decades.

The Grand Jury found that:

  • Probate Court staff is severely overworked and understaffed;
  • The Public Defender’s office has no monitoring system to ascertain the service it renders to beneficiaries to assure their needs are addressed;
  • Guardians are not provided formal training;
  • There is no formal grievance process;
  • Beneficiaries who are poor do not get the same level of service as those with means
  • Involuntary conservatorship can drain estates quickly because of lack of oversight.

The Grand Jury report has given hope to probate reform advocates, who have been protesting these deficiencies for years with little or no success.

Spectrum Institute has been calling for Probate Court reform for eight years, especially in regard to beneficiaries with disabilities.

“The report of the Grand Jury sends a signal to the Alameda County Board of Supervisors that the status quo of unnecessary and overreaching conservatorships must end,” said Spectrum Institute Director Tom Coleman. “In terms of the responsibility to stop conservatorship abuses, the buck stops with the Board of Supervisors.’

Coleman suggested that the board should look to Nevada for solutions. “It should adopt a new system for providing legal defense services to seniors and people with disabilities who are targeted by these proceedings,” he said.

Recommendations from the Grand Jury are that the Alameda County Defender’s office transfer the responsibility of conservatorship to a separate agency with a contract specifying standards be met in order to receive funding from the County.

The Grand Jury is also advocating for a “Zealous Advocate,” a legal representative who assures that the desires of the conservatee are addressed.

Conserved involuntarily, Katherine Carter had to be ‘kidnapped’ from a long-term care facility by her daughter, Venus Gist, a ‘Shout Out Justice’ advocate.

Carter had been neglected to the degree that the facility had arranged hospice care. Risking arrest and prosecution, Gist “illegally” removed her mother from the facility. Katherine Carter lived an additional four years after being given 3 to 6 months to live.

“As both an advocate and a victim of the probate court, I think it’s exceptional that the Grand Jury of Alameda County has finally filed a report addressing the issues of conservatorship within the Public Guardian’s Office,” Gist said. “Abusive conservatorships are occurring nationwide and seldom are public servants such as judges, attorneys, conservators, fiduciaries, etc. held accountable and convicted of criminal acts committed towards their clients.…. it’s rarely talked about, and families and caregivers are mostly blamed.”

Alameda County needs a radical transformation in the way legal defense services are provided., Gist said. “As things now stand, these services almost always result in a conservatorship being granted. There are no trials. No appeals. Less restrictive alternatives are not seriously explored,” she went on.

She agrees with Coleman that the board should hire an outside firm to audit the public defender and “look seriously at adopting the Nevada model for legal defense services in Alameda County.”

To prevent abuses such as the Carter family encountered, the Grand Jury recommends that a neutral third-party entity be selected to conduct annual reviews of conservatorships to assess attorney compliance and determine compliance with probate rules.

The Grand Jury also recommended that attorneys take ongoing educational training in probate conservatorship and establish annual performance evaluations. They also recommend that a licensed health professional evaluate each client.

Although encouraged by the Grand Jury report, Gist feels it did not go far enough and wishes they had interviewed citizens who have been violated. Gist says, “If they are investigating, conduct it thoroughly, it requires the whole truth.”

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Photos courtesy of Ella Baker Center, photography by Brooke Anderson
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