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Get it? The African-American legend series highlights the accomplishments of blacks. In areas as varied as politics, sports, aviation, literature, business, and finance. We will explore how African-Americans have succeeded in areas where they had been previously excluded because of segregation, racism, and lack of opportunity. I'm your host, Dr. Roscoe C. Brown Jr., and joining us on today's program is Jean Smith,
who is vice president of the Chase Community Development Corporation, which is a part of the Chase Manhattan Bank, which is a very, very big bank these days. Yes. But we want to talk not so much about Chase, but about banking in general and how responsive the banking community has been to the needs of the black community. Roscoe, that's an interesting question, because prior to 1978, the CRA Act, the CRA Act is the community reinvestment act. We were somewhat not doing the kind of things we should be doing in terms of the black community. Had we been doing that, the communities would not be in disarray they are now. However, in 1988, when the government really became very adamant about them following the 1978 rule that they had to reinvest a certain amount of their assets into those communities that we actually did business in, or they would close them down, or they wouldn't allow them to expand, we developed a chase at any rate, and I think we were the predecessor
for many of these CDCs, if you will, the Community Development Corporation. What Chase did was set aside a entire subsidiary and put a few people in place, like myself and Mark Willis and Joe Riley were very small group, but we started in 1989 and by 1990, we had staffed up to about 15 people, and our charge then was to really find ways and programs that we could redevelop these communities that had fallen in disarray. What we actually did was partner with some of the federal and city agencies that would subsidize some of the projects, and over the last eight years, ten years almost, we've actually provided housing, I would say we built over 10,000 units of housing. That's both monthly dwelling and one in two families homes, residential homes. Now, if you have on a red suit, I don't think that's indicative of redlining, which was
a process that banks used to use to exclude certain neighborhoods and communities for investment, not only investment for mortgages, but also investments for small business and other kind of developments. Obviously, redlining is illegal now, I guess it was illegal then, too, but it happened. What now is the status of things like redlining? They don't call it that, but are they a certain informal agreements that various financial institutions have to invest or not invest in the given community? It's unfortunate that redlining was a real reality, and I would like to think that we have addressed those issues, particularly a chase. What we really have developed was residential mortgage area, which addresses those needs of low and moderate income families, and what we've done was set aside certain programs, a special program, and I'll use the word set aside. That's not the right term, but the programs will include different ways of reaching
at credit decisions for low and moderate income families, rather than using the traditional credit, your history of credit, or whether you've paid on time, or whether you've had credit in the past or not. You've taken that out of the box, out of the mix, for low moderate income families, and what we've done is use things like their utility bills. We will look at their utility bills over the last year to see if they've been paid on time. We will also request a letter from the landlord to see if they've paid their rent on time. I know, one of the hardest things for minorities or low moderate income people is to have a job, sometimes they're on a job for two or three years and the same adage last went high and first went fired. We stopped looking at longevity of employment, rather than the consistency of employment, so that if, in fact, you did lose your job after three years, if you went back to work in three to six months that you really did have a strong work ethic.
We began to look at those kinds of things to establish credibility and the ability to pay for a home. Now, what about business decisions? The classic concern of business people who operate in minority communities is the Bedford Stuyvesons and the Holloms to South Jamaica is that they cannot get the same kind of financing, initial financing, same kind of credit, lines of credit, et cetera. It does CRA help you to address that, and that's one of the things that happens in the banking industry now. Absolutely. Let me tell you how we're set up a chase. We have a huge organization, about 150 people just to address the needs of our CRA issues, and we don't like to call it CRA. At Chase, we like to say, this is the right thing to do, and by the way, we do make money at it. Well, it is clearly the right thing to do, and I'm sure you wouldn't do it if you weren't making money.
We make money, so we don't want to get any halos for, we give away money. We have an $18.1 billion commitment to give back to these communities, and a good portion of that is in philanthropic organizations, but a lot of it is just plain pure, good business. I happen to take a look at our strategic plan on the real estate lending side the other day, and we're doing about 270 million in real estate loans that will help to reestablish these communities, both on the housing and residential side, daycare, special needs for those people who have AIDS and need special kind of housing, as well as daycare. So we have a holistic approach to building our neighborhoods, and we do have something in place that will allow us to lend to retail strips, and we've done quite a few of those. We've done one in Hollis, and I think we're doing the sole, we're doing a couple that really will help to stabilize and anchor these communities in conjunction with a program from the city of New York.
But we are established at the top, we have Carol Perry and Mark Willis, and then we have a group of compliance officers that make sure we're keeping in compliance with our CRA regulations, and a philanthropic group that will give away money, and then we have the real estate lending team, and that comes under Mark Willis, and we have four teams there. We lend to for-profit, and not for-profit organizations for the purpose of redeveloping and rehabilitating houses in our communities. On the other side of that, we have the business side, commercial loan side, which is headed by Rood Salsman, and now that group will address all the needs of the business people in the low moderate income areas. And we also just developed what we call the waste, the faith-based lending, and that's to churches throughout the metropolitan area. And I believe we're going as far as Delaware now to start to look at churches who are in the business of community development. But we are doing business with small businesses, and that's the toughest part.
Small businesses don't necessarily keep books because there's an old saying in the financial world, I keep books for my wife, for the federal government, and then one for the bank. We kind of, the bank has to get in and ferret out what kind of numbers we have, and there's a strong liability to the federal government if we do lend to someone who hasn't given us the proper information. But we have, it's tough. There are a lot of turndowns in this area, in small businesses. We have a resource center that will provide technical services to a not-for-profit and to for-profit businesses. They will go in and help you develop a business plan, help you figure out how you can computerize your accounts receivables or your payables. So I think what we're trying to do, those things that make sense in the community to help stabilize and help them grow to be a holistic community. We were early on talking about education, and that's my greatest desire, is that all
of our children get the best education that they can possibly get, and it's a passion of mine. I've been trying to build schools with the New York City School Board. Now which fund does that come out of this real estate investment fund or community development fund? It's community development, and we would lend the money to the developer or the not-for-profit that was going to develop the school, and of course we all look to get paid back, but kind of look at the contract that they would have, or the least they would have with the city of New York as a source of repayment. But the specialty schools that they're putting throughout the city is kind of something we're looking at doing as well. Now you've been speaking a lot about Chase, which you should, because that's where you work. But what about the rest of the banking industry? Not necessarily in New York City, but just nationally. As the banking industry seems to be consolidating and getting smaller in terms of numbers, but larger in terms of the mass of a particular bank, it seems to me they'd have a tremendous
impact on economic policy affecting the inner cities and black communities. So without naming particular banks, to what extent other parts of the banking industry addressing the concerns that I see Chase's so aggressively looking at? It's interesting, you should ask that, because the reason that they've now signed me to Westchester is because we didn't have a foothold there. The competition is so stiff, there's other banks up there, and I guess it's all right to mention it, but the Bank of New York and the major money center banks are all under the same regulations under CRA. Therefore, they all have to have an X amount of dollars on their books when the examiners come. And I don't say that they do it because they have to adhere to the law, but it makes good business sense when you go outside of the New York City area, you have Nations Bank Union. They all have their own CDC's or community development subsidiaries, and they're all very
competitive. When you get to the table to do a partnership with third-party lending through one of the lists or enterprise organizations that will lend the money down through the community, this is a list score, say enterprise. The city bank, all the major money banks are at the table, and they will lend so much to the list. Low-income housing group and enterprise is a major investment group that's been around since the 80s and they're putting money. So the banks are using the middle people. They lend the money to the middle person, and then lends it to the consumer. It's much more efficient because they have offices in all of these towns or cities throughout the country, and they have credit staffs that can do this. So it's not unlike the neighborhood housing funds, because it would be almost impossible for bankers to set staffs up to lend $50,000 or $25,000 loans. So it's easier and it's more efficient to lend it through one of the intermediary organizations.
Well, what kind of monitoring you do to make sure they don't set up bureaucratic and other hurdles, because just my general experience, I've heard of folks who say, well, the bank wants us to do it, but this agency is giving me a problem. Actually, we have members that sit on the board. We have our board members. And actually, I believe we really look at the credit risk at some of the loans. So we're constantly in touch with these organizations and monitoring them to the extent that they're doing the right there. Well, now, you take a look at the credit risk, you want to see that they are lending money to people who previously have been excluded from credit, because the credit isn't so good, or you want to make sure they lend money to winners whose credit is already good. We want to make sure that any credit decision they make is a viable one, whether it's to someone who hasn't gotten credit before. And mind you, these are for low-moderate income families. And where the credit is historically been a little less than bankable.
And again, we've put in new kinds of regulations and acceptable credit criteria that makes it easier for people without a credit history, without a steady job, to obtain credit to buy homes. And we all believe that everyone should be able to be a homeowner. We give them special classes, as a matter of fact, before. You can really buy one of our homes that you have to go through a six-month credit training on how to budget your money, and how to be a homeowner. Are there income limits in terms of who's eligible for these programs? Yeah. Yeah. There's a medium income. 45, 50, 65. It depends on what the medium income for the area is, 50% of medium income or 70% of medium income. So you'll find that most of them are making, in two-word people working in a family,
maybe 45, and in some cases, it could be 30,000. Because when you're buying a three-family home, they've worked the numbers out that if you rent the top two floors, your liability for the mortgage would only be what you're paying for rent. And that's the key critical thing here. Most people think they can't get the down payment. So they really can't buy a home. They could get, I had one person call me, it was so sad. She said, every time I'd get 1,000 or 2,000 in the bank, something would happen, and I'd have to spend it. So she could never get to that real number that she could get 10% or 5% down. In some cases, we've lowered the rate to 3% down. Well, recently, we put a program in where we will lend you the down payment. Now, talking about lending, what about interest rates? Do people in minority communities on the special program get a lower interest rate, or you go market rate on this?
It's market rate. That sort of bank gets its profit. But in terms of ealy, masonry, philosophy, an additional way of expanding this might be to drop the mortgage rate. And I think I've heard of programs where they drop the mortgage rate to 3 points. There are some where you can get a fairly lower income rate, and that's a little shaky ground on me. I don't know a lot about that, but I'll be glad to take a look at that and get it back to you. Okay. Well, it's a good thing to think about, because you're right, banks are in the business of making money. Two things have occurred. They realize that there's a lot of money in the African-American and Latino community that they have not been able to access because of their rules and so on. But let's look at another part of the banking industry. Let's look at the top executive suites. They're in the executive suite, and decisions are made by people in the executive suite and their managers. To what extent has there been a move for more opportunities for African-Americans in the banking community, not just at the level of punching in what you give it to Tullowinder,
but at the executive level of managed level? What's going on with that now? Actually, that's very interesting, because everybody's talking about diversity, diversity at the top, and I can honestly say that Chase is at the forefront. A few years ago, two of my colleagues and I were very concerned that we didn't have many minorities at the top to make policy decisions, and I don't think we're quite there yet. I'm not satisfied that we have a lot of minorities making policy changes, but I can tell you that the three of us went to our executive vice chair at that time and explained to him that ethnic minorities around the bank were not getting a fair shake, but more importantly, the bank was losing because they were losing talent by the truckload of ethnic minorities who could really add value to the bank and really become major players if they were allowed to break through certain ceilings.
He listened, and he put together a small diversity council that has now expanded itself to a massive diversity council, and we even have an emergent market series as do most of the major banks, but we have a diversity council that is headed by the chairman of Chase Manhattan Bank Walter Shipley. He has a passion for this, and more importantly, what I think is what he's done is he's made the diversity a part of his direct report strategic plan, so they have to come to him with a strategic plan and how they're going to diversify their various organizations within the bank. We're a long way from there, we do have quite a few minority ethnic minority and women senior VPs, Carol Perry's woman, and she's an executive vice president, so we're moving in the right direction, of course I would say it's at a snail space, but nonetheless I think we're moving in the right direction, we have a lot of work to do, we have our diversity
council meetings on a regular basis once a month, the chairman comes and takes his coat off in its shirt, and we have an opportunity to discuss some of the problems that we're facing as ethnic minorities trying to build into a major organization is tough, it's really tough. Obviously the challenge of America in the 21st century will be that similar to the challenge of the Du Bois issue at the beginning of the 20th century, he said as you recall, writing in Souls of Black folks at the problem of the 20th century will be the color line, the problem of the 21st century is diversity, how does a country which was predominantly Europe, or pure in an origin, now absorb people with African backgrounds and Latino backgrounds and Asian backgrounds, etcetera, but I must say that recent events in the banking industry where when the Asian markets began to crash, the markets here began to crash and that certainly should have sent a message to everybody in banking that there is an interlocking relationship
between the entire world and since much of that emerging world is coming here in that probably in another 40 or 50 years, half of the population in this country will be people other than Caucasian, so the diversity isn't just something that might be done for moral or spiritual reasons or philosophical, it is just good solid economics which is what you're describing. Absolutely, it makes good business sense to deal with people across the board as a people rather than trying to make decisions at the top, I guess I should tell this story, but of course our first stance at an economic development was our head of our department, I won't call this name, but he went up to one of our famous churches in Harlem for a meeting and he came back, he was all excited, he says, gee, I was just up at Abba senior church
and I met, and he says, yeah, I took him a watermelon, I says, you didn't do that, did you? He says, yeah, it was a hot day, I thought they didn't do it, I says, come here, let me give you a lesson in what you do and what you don't do, sensitivity one on one, but he had no idea, he was not from the city of New York and he thought it was absolutely perfectly the thing to do, which if you don't know, you know, I was in the jewelry industry at one point of my career and I had, there was quite a few hesitems and I had to go to Antwerp and I was on the, one of my accounts was the American Jewish distribution group, highest, I had all of the Jewish major organizations as I did in ACP and the urban league, but I had to learn that you don't shake hands and you don't reach out to shake a hesitems hand and you know, at the first time I did it, I realized I had done something that wasn't culturally acceptable, but you learn as you go along and certainly this gentleman has learned and
has done a real stand-up job in inculcating himself into our communities so that we could really build them, but diversity is a major part of our strategic plan and it makes all economic sense, it makes good business sense to do business with ethnic minorities. The other part of your passion is education and you serve on the Board of Regents College of the State University of New York, could you tell us a little something about what Regent's College is, how it relates to your role as a bank of why you're doing this and what you expect to achieve? Because I got a call from you, Roscoe, who says, you're going to get a call and you say, yes, it's been really a great experience and I'm glad you did set me up for that because it is really, it's Regent's College is the best kept secret in America. It's a college that will provide you an education based on what you've learned, not where you've learned it and if you've taken credits at University of Maryland City College,
they will combine those credits, make an assessment and then tell you how much more you need to do to get a degree and you can take those credits anywhere that they've gotten approval and at the end of the time they'll put all the credits together and you've gotten your college degree without walls. Thirty-nine percent of their student body or student clientele happened to be minorities. When I went on the board, we had one other minority on the board and I just found it amazing that we didn't have anybody in operations. We didn't have ethnic minority on the operation staff, there was not an African American, a Latino or an Asian and they were servicing people throughout the world. But it's a wonderful school, it provides a vehicle for people who would ordinarily not have an opportunity to get a degree, to get a degree through this mechanism without an interruption to their life. I believe Regents College served some 70,000 people a year to a very large number.
They've graduated over 97,000 people since inception in 1977 and they have about 70,000 students throughout the world and it's a phenomenal college, the people of their work very hard, Wayne Williams is the president and it's just a wonderful experience, thank you Roscoe. Since this program is sometimes seen in other parts of the country, how does someone who's interested in Regents College find out about it? Regents College is located in Albany, New York. It's at 7 Columbus Drive in Albany and I guess it's on the internet. We have a webpage, Regents College and easily accessible in the people there are wonderful. One of the things that is consistent in your discussions has to do with how do you help people to advance education as a way of advance, finances as a way of advance, and particularly in your case, Gene, you have emphasized not only race but also gender because you've
entered into a business where they're really a very few women in the higher echelon's and then as an African-American woman, woman you've had some great experiences. To what do you attribute your success in bringing some of these things about? First, I have to say I have angels all around me, including Roscoe, but I've been truly blessed because I was a latchkey kid, bought about the bowels of Harlem, finished high school and went to work with Chase Manhattan Bank, and just did a job that's absolutely obsolete now because we did it by hand. What was the job? It was a block clerk. We saw it checks by hand and then we did bookkeeping by hand on an old NCR machine. So it was antiquated, but as the bank grew, I grew. What was wonderful about my life is that Chase's paid for my education. I was working as I got very knowledgeable because I'm sort of a workaholic.
I never say no. They say, Gene, we need this done, if somebody needed some help, I'd just jump in and do it. Well, by doing that, I just learned everything. So I had a complete knowledge of operations, loans, and everything without a real formal education. And some folks were coming into the bank working as two weeks and they were next thing you knew. They were vice presidents or AT's making 18,000. I was still here making 9,000 and it just didn't seem right. So I kind of went to my boss and asked them, what could I do to do changes? And he says, oh, you need a college degree from an Ivy League school and oh, he just gave me a whole litany of things. I needed to do to get to this next step. So I said, OK, just tell me what I have to do and I went off to Fordham University, got my degree in three and a half years. And I came back and, true to their word, they put me through this program called Credit Training, which is the premier credit training program in the world. Met a lot of people going through credit training and my career just took off from there. But it was a lot of hard work and teamwork.
All right, generalizations, by banking your career, et cetera, you talked about hard work and you talked about commitment and you talked about diversity. What advice would you give to someone who's in your spot like you were 30 years ago? Wow, I'll tell you this. It has to be quick too, we come to it in the program. There were no women there and I was working in a group of all Irish men and as a division exec in Brooklyn and they would make their stories, they would make the budget and walk out and then go to the men's room and make the decisions. And your determination and help to change it, okay, we've been talking with Gene Smith as Vice President of the Chase Community Development Corporation about banking diversity and how to succeed in the economic world that we live in today. Thanks very much, Gene, for being with us on today's African American legend. Thank you.
Series
African American Legends
Episode
Jean M. Smith, Chase Manhattan Bank
Contributing Organization
CUNY TV (New York, New York)
AAPB ID
cpb-aacip/522-h98z893c70
NOLA Code
AAL 097019
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Description
Series Description
African-American Legends profiles prominent African-Americans in the arts, in politics, the social sciences, sports, community service, and business. The program is hosted by Dr. Roscoe C. Brown, Jr., Director of the Center for Urban Education Policy at the CUNY Graduate Center, and a former President of Bronx Community College.
Description
Jean Smith describes how the banking industry has been serving the needs of the African-American community. Taped December 15, 1997.
Description
Taped December 15, 1997
Created Date
1997-12-15
Asset type
Episode
Media type
Moving Image
Duration
00:28:33
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CUNY TV
Identifier: 15797 (li_serial)
Duration: 00:28:48:05
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Citations
Chicago: “African American Legends; Jean M. Smith, Chase Manhattan Bank,” 1997-12-15, CUNY TV, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC, accessed March 28, 2024, http://americanarchive.org/catalog/cpb-aacip-522-h98z893c70.
MLA: “African American Legends; Jean M. Smith, Chase Manhattan Bank.” 1997-12-15. CUNY TV, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC. Web. March 28, 2024. <http://americanarchive.org/catalog/cpb-aacip-522-h98z893c70>.
APA: African American Legends; Jean M. Smith, Chase Manhattan Bank. Boston, MA: CUNY TV, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC. Retrieved from http://americanarchive.org/catalog/cpb-aacip-522-h98z893c70