MinorityBank Blog
McDonald’s cools on DEI, shifts to ‘global inclusion’
The shift in strategy comes as a result of work done last year, McDonald’s said, including a “comprehensive Civil Rights Audit.”
https://www.esgdive.com/news/mcdonalds-dei-2025-global-inclusion/736733/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202025-01-08%20ESG%20Dive%20%5Bissue:69246%5D&utm_term=ESG%20Dive
Also see:
https://corporate.mcdonalds.com/corpmcd/our-stories/article/our-commitment-to-inclusion.html
PayPal Minority VC Funding Lawsuit: A Bad-Faith Argument
The lawsuit filed by Andav Capital and its founder, Nisha Desai, against PayPal represents not only a fundamental misunderstanding of the purpose and legality of diversity initiatives but also a bad-faith attempt to weaponize civil rights law against efforts to address historical and systemic inequities. See: https://www.linkedin.com/pulse/response-paypal-minority-vc-funding-lawsuit-zbqse/
Dream Chasers Capital Group Calls for Transparency and Accountability at Carver Bancorp Annual Meeting
NEW YORK, Dec. 13, 2024 — Dream Chasers Capital Group LLC (“Dream Chasers”) is raising serious concerns about irregularities during the Carver Bancorp, Inc. (“Carver,” or the “Company”) (NASDAQ: CARV) Annual Meeting of Shareholders held on December 12, 2024. Dream Chasers is urging Carver’s Chief Executive Officer, Donald Felix, and the Board of Directors to deliver clarity, transparency, and accountability to shareholders after a contentious meeting.
Preliminary results reveal that approximately 70% of retail shareholders supported Jeffrey “Jeff” Anderson and Jeffrey Bailey for election to the Board. However, these results were clouded by unexpected procedural decisions, including an unexplained 45-minute extension of voting, despite the voting deadline being set weeks in advance through Carver’s definitive proxy filing with the SEC on October 31, 2024.
Dream Chasers has formally communicated its concerns to Carver’s leadership in a letter detailing several demands to ensure fairness and transparency in the election process.
Trump’s New Economic Policies Could Have A Detrimental Impact On Black Businesses
Trump’s New Economic Policies Could Have A Detrimental Impact On Black Businesses, Yet Some Opportunities May Exist.
For more, see: Webinar – Trump’s Impact on Black, Small, Minority and Women-owned Businesses. Live Dec 30, 2024 at 3:00 PM. Creative Investment Research. https://events.eventnoire.com/e/trumps-impact-on-black-small-minority-and-women-ow
A small-dollar business lending scheme finds a niche at Huntington.
Huntington Bancshares’ Lift Local small-business lending program started small, but after four years, it’s become one of the $201 billion-asset company’s more popular product offerings.
Executives at Huntington Bancshares said the $201 billion-asset company’s 4-year-old Lift Local Business lending program has far exceeded their expectations.
The numbers tell the story. Huntington launched Lift Local in October 2020 with a $25 million lending budget. It folded the program into the ambitious five-year, $40 billion community development strategy it unveiled in June 2021, boosting its lending threshold to $100 million. Last month, Huntington disclosed Lift Local has made nearly 1,900 Small Business Administration loans totaling $133 million.
And while Huntington has made good on more than 75% of the community strategy’s $40 billion overall commitment, there appear to be no plans to wind down Lift Local. “We’re continuing to invest in the number of people that are working on the program, and some of the technology and protocols we put in place to support it,” Small Business and SBA Director Maggie Ference, said in an interview. “We’re increasing the number of community outreach events we do.”
Huntington aims Lift Local at underserved communities, minorities, women, veterans and residents in low- and moderate-income neighborhoods. According to the bank, about 40% of Lift Local loan dollars have gone to Black and Hispanic entrepreneurs. Women and veteran entrepreneurs received an equivalent amount.
Huntington has been the nation’s No. 1 SBA 7(a) lender seven consecutive years. During SBA’s 2024 fiscal year, which ended Sept. 30, Huntington approved about 7,600 7(a) loans for $1.53 billion. More than 700 of those, totaling about $56 million, were Lift Local loans. Overall, Huntington’s average 7(a) loan size in fiscal 2024 was $202,000. The average size for Lift Local loans was approximately $71,000.
Under 7(a), SBA provides guarantees ranging from 50% to 85% on loans made by banks and other private-sector lenders.
The program has become one of Huntington’s most popular product offerings. Ference said she was quick to receive inquiries about Lift Local from groups in the Carolinas and Texas after Huntington announced its recent expansion plans. In March, the Consumer Bankers Association awarded Huntington its Joe Belew Award for its work with Lift Local.
Huntington will continue Lift Local, “not as a finite fund, but as a movement of, how do we find ways to be better partners, how do we find ways to be more to the small-business community,” Ference said.
Lift Local offers loans of $1,000 to $150,000. Along with capital, borrowers receive a bundle of other services, including financial education, a dedicated Huntington banker, and help accessing legal, accounting and other back office support services.
“We’re going to offer financial education. We’re going to offer a banker … a champion in the branch that you can come and talk to any time, that’s going to know what’s going on in your business,” Ference said. “And we’re going to give you really patient capital at a low rate along with all these other products and services.”
By all indications, the combination of credit and a broad-based support effort appears to be producing solid results. Lift Local credit losses “continue to outperform our expectations,” Ference said.
“When we originally wrote the business plans, we were looking at traditional credit metrics that would tell us this is a space that banks shouldn’t be lending in,” Ference said. “Four years later, this program is performing at levels that, frankly, it shouldn’t be, given the credit scores of some of the participants.”
Huntington’s experience with Lift Local serves as a hint that current bank underwriting is painting an inaccurate picture of the creditworthiness of many minority borrowers, William Michael Cunningham, an economist and investment analyst who specializes in impact investing, said in an interview.
“What it’s telling you is that credit policy for small-business loans has been out-of-whack for 30 years,” Cunningham said. “Small adjustments in the lending process can have an outsize impact on performance. Banks need to take a deeper look at the people applying for credit, a deeper look at the credit procedure itself.”
Huntington’s ultimate goal is to move businesses past the need for Lift Local and similar programs. “Once we actually help them through that process … it helps legitimize them in a way that, when they come back for a second loan, they don’t need the program,”
Ference said. “They’re already scoring at a level that they could go to any bank in the country and continue to grow. What we love is that they keep doing it at Huntington.”
By John Reosti November 22, 2024, 4:05 p.m. EST
BankThink – ‘Kamalanomics’ presents a major growth opportunity for US banks
As the 2024 election season heats up, economic policy proposals are once again at the forefront of the national debate. Vice President Kamala Harris, widely recognized for her work in the Senate and in the White House, has introduced a comprehensive economic strategy known as “Kamalanomics,” built on principles of inclusive growth, social equity and targeted investments in underserved communities. READ MORE.
UnivNoCar TO PAY $4.8M TO ANTI-AFFIRMATIVE ACTION ACTIVIST
The case revolves around Students for Fair Admissions, which received a $4.8 million settlement from the University of North Carolina (UNC) following a Supreme Court ruling against race-conscious admission programs. Blum’s pursuit of legal fees post-ruling, alongside concerns about the financial impact on educational institutions and potential deterrents to diversity initiatives, could be seen as indicative of a primarily financial motivation for these lawsuits. For more information, you can read the article here: https://www.blackenterprise.com/unc-agrees-pay-group-anti-affirmative-action-activist-4-8m/
Racial Disadvantage and Government Aid
In a recent article, the Washington Post presented a contentious view on the role of federal programs in addressing racial inequality. The paper indicated these programs are based on flawed assumptions of inherent disadvantage, but this overlooks the nuanced complexities of systemic barriers faced by minority groups. What is needed is a more honest, ethical, balanced perspective, highlighting the historical context and the necessity of such programs.
Contrary to the Post’s assertion, federal aid programs for minority businesses are not premised on an inherent disadvantage but rather on a history of systemic barriers. Evidence from numerous studies points to the continued challenges minority-owned businesses face in accessing capital and opportunities, a disparity these programs aim to address.
Legal challenges to these programs simplify a complex issue. A more nuanced discussion is needed, one that acknowledges the successes and pitfalls of these efforts while striving for equitable solutions.
The categorization of disadvantaged groups in federal programs is not a haphazard process. Decades of research, including my book “Thriving As a Minority-Owned Business in Corporate America: Building a Pathway to Success for Minority Entrepreneurs 1st ed.” have meticulously documented an evolving understanding of racial dynamics and economic inequalities as evidenced by the data.
The Minority Business Development Agency (MBDA) plays a crucial role in supporting minority businesses. Statistics on the agency’s impact challenge the notion that its focus is solely on racial categories, highlighting its significant economic contributions.
The article errs in linking the Supreme Court’s education ruling to business and government contracting, since this overlooks the fact that these are independent legal areas. There are unique challenges and requirements in these sectors. A distinction is necessary for a fair analysis. The affirmative action ruling is simply not applicable to minority contracting.
An in-depth examination of the plaintiffs’ arguments reveals a shallow, inaccurate understanding of complex legal and ethical considerations. The broader implications of these cases on societal equity warrant careful consideration.
A balanced approach is needed, one that recognizes the necessity of race-based programs while also acknowledging their limitations. Constructive suggestions for improvement include increased transparency, regular program evaluations, and inclusive dialogues to refine these initiatives.
In conclusion, while it’s essential to critique and improve government programs, dismissing them outright fails to recognize the systemic challenges they aim to address. A better approach is to engage in a more informed and constructive dialogue, seeking solutions that balance societal equity with fairness and equality. Let’s strive for a future where government aid is both effective and inclusive, fostering a business landscape that truly reflects the diversity and potential of our society.
SBA LENDING TO BLACK BUSINESSES DOUBLES
Calling it “historic progress,” the U.S. Small Business Administration announced it has doubled lending to Black businesses nationwide in multiple categories.
The SBA on Thursday, Sept. 21, reported it has backed 4,387 loans to Black-owned businesses so far in fiscal 2023 via its 7(a) and 504 loan programs, over twice as many as since 2020. In terms of loan amounts, a total of $1.3 billion has been provided, constituting a 7.5% overall share of SBA-approved loans for businesses, also showcasing a doubling since 2020.
The SBA reported that women and people of color have led a historic small business boom. Some 13.1 million new business applications have been filed with the agency since President Joe Biden took office— a rate 65% faster than the pre-pandemic average.
SBA Administrator Isabel Casillas Guzman and Congressman Steven Horsford (D–NV Fourth District) announced the loan performance at the 2023 Congressional Black Caucus Foundation’s Annual Legislative Conference on Thursday.
“Black businesses are helping to power a nationwide small business boom that is creating jobs, advancing equity in communities across America, and uplifting our economy,” Guzman stated.
She added, “Today’s benchmark loan numbers show our work under President Biden’s Investing in America agenda making inroads to support more of America’s Black small business owners. Despite these gains, we still have a long way to go. We continue to push forward with long overdue and transformational reforms to our lending and investment programs that will raise the bar of equity and opportunity even further for all of America’s small businesses.”
“Economic mobility and success are vital to achieving the American dream, but for far too long small businesses owned by Black Americans have faced roadblock after roadblock on that path,” said Horsord, the chairman of the Congressional Black Caucus.
A separate analysis of SBA data is projecting that Black businesses in America could obtain at least another $200 million in loans by the end of 2023 if that activity continues at its current pace.
According to a calculated analysis by Creative Investment Research, the extra money could come from the SBA’s 7(a) and 504 loan programs. The Washington, D.C.-based firm projected in June 2023 that lending to Black firms would rise to $1 billion this year, up from nearly $600 million in 2017. Black businesses widely use both programs.
Creative Investment Research reports the target for 2023 was reached this month as (7a) lending to Black firms totaled over $1.09 billion.
The cash infusion could be vital as securing financing is often among the largest operating challenges for Black entrepreneurs. The SBA loans can be used in many ways, including working capital, buying land, and acquiring equipment. The money can be tapped for acquisitions, expansion, and other uses.
William Michael Cunningham, economist and owner of Creative Investment Research, told BLACK ENTERPRISE that from his company’s analysis, the SBA in 2023 approved 4,060 7(a) loans for Black firms, representing nearly 8% of total loan approvals. He says the $1.09 billion in total dollars granted to Black businesses represented 4.5% of overall lending activity in that category.
Now, Cunningham’s firm projects lending activity to keep growing.
“We now anticipate total SBA (7a) lending to Black firms will reach $1.2 billion in 2023,” he said.
However, SBA lending directed to Black businesses still has a way to go compared to other demographics. For instance, the data tied to the 2023 SBA 7(a) loan approval amount showed over $4.6 billion for Asian businesses and roughly $10.3 billion for white companies.
Cunningham says the gap in lending between the groups is significant but represents an opportunity for collaboration to make more loans to underrepresented communities. He says the Minority Business Development Agency might serve as the focal point for this proposed collaborative effort.
The SBA’s support for Black-owned businesses has been steadily rising over time. Cunningham says the number of 7a loans to Black firms approved has grown 68% when comparing 2023 to 2017.
Further, Cunningham says the SBA has worked more with Black-owned banks to expand access to 7(a) loans. He provided this chart on institutions’ contributions to Black businesses this year pertaining to SBA (7a) loans:
- Lendistry SBLC, LLC (California) approved 83 loans worth just over $47 million.
- Mechanics & Farmers Bank (North Carolina) approved 7 loans totaling over $4.9 million.
- Industrial Bank (Washington, D.C.) approved 2 loans for over $1,6 million.
- Tioga-Franklin Savings Bank (Pennsylvania) approved 4 loans totaling $1,2 million.
- The Harbor Bank of Maryland (Maryland) approved 1 loan worth $558,000.
- Liberty Bank and Trust Company (Louisiana) approved 3 loans totaling $299,000.
- The First Security Bank (Oklahoma) approved 1 loan for $160,000.
Mechanics & Farmers Bank, Industrial Bank, The Harbor Bank of Maryland, and Liberty Bank and Trust are listed on the BE Banks list of the nation’s largest Black-owned banks.
From: Black Enterprise Magazine. 9/23/2023. See: https://www.blackenterprise.com/sba-black-business-loans-doubled/