    [Public Papers of the Presidents of the United States: William J. Clinton (1993, Book I)]
    [July 15, 1993]
    [Pages 1084-1087]
    [From the U.S. Government Publishing Office www.gpo.gov]

    [[Page 1084]]

    Remarks Announcing the Community Development Banking and Finance
    Initiative
    July 15, 1993

        Thank you very much. I want to say to Joe and Beverly and Tim, they
    have stated more eloquently the case than I ever could for the work we
    are here to begin today. I thank them for their presence here and for
    their fine presentations.
        I want to acknowledge, too, the presence in the audience of so many
    people who have been involved in community development financing for a
    long time. I thank all of you for coming from all over America. We have
    a remarkable group of people here from the United States Government from
    the executive branch today: Secretary Bentsen and Under Secretary Newman
    from the Treasury Department; Secretary Espy and Under Secretary Bob
    Nash from the Agriculture Department; Under Secretary Terry Duvernay and
    Assistant Secretary Cuomo from HUD; the SBA Administrator, Erskine
    Bowles; the Comptroller of the Currency, Gene Ludwig; the Federal
    Reserve Board Governor George Lindsey; the Acting Director of the Office
    of Thrift Supervision, Jonathan Fiechter; the FDIC Acting Chair, Andrew
    Hove, and many, many others, showing that this administration has worked
    together to try to come up with this proposal.
        I'd also like to say that we have some specific Members of Congress
    who are here today whom I will acknowledge, but just for the rest of you
    who have been working in this field for a long time and who have felt
    left out, I'm going to do something I don't think I've ever done before.
    I'm going to ask every Member of Congress who is here to stand so you
    can see what support you have in the United States Congress. Would you
    all please stand? By my quick count, there are 41 or 42 Members of the
    Congress here, a very significant representation of people who asked me
    actually to--they felt so strongly about coming here--to delay the start
    of our ceremony this morning for a few moments so that they could
    complete their votes and still come up here.
        I'm particularly pleased that the House and Senate Banking Committee
    chairs have agreed to sponsor this legislation and shepherd its package
    through Congress. Representative Henry Gonzalez and Senator Don Riegle
    have both long been champions of reinvesting in our communities.
        The Senate Banking Committee will hold its hearing on this bill this
    afternoon at 2 p.m. The subcommittee chairs of the House, Congressmen
    Neal, Kanjorski, Kennedy, Frank, and Flake, have all joined to make sure
    this bill will receive consideration by the full House Banking Committee
    within the next few weeks.
        There are four Members of the House I would like to pay some special
    recognition to. First, Representative Joe Kennedy of Massachusetts, who
    has worked to make the Community Reinvestment Act a reality for all
    Americans in all communities. And I thank you for that. Second,
    Representative Floyd Flake of New York, who has worked to provide
    innovative ways to spur reinvestment by major financial institutions in
    communities and has actually tried to do something with his ideas in the
    private sector as well as with his work in Congress. I thank him very
    much for his efforts. Next, Representative Maxine Waters of California,
    who has been the conscience that has kept community development banking
    and strengthening the CRA on the Nation's legislative agenda. Thank you
    very much, Maxine. And finally, Congressman Bobby Rush of Illinois, who
    has forged a coalition of more than 70 cosponsors for a community
    development financing institutions bill that shares common ground with
    my initiative. I look forward to working with him in Congress and across
    the country to champion reinvesting in all of our communities, and I
    thank him for mobilizing 70 Members of the House of Representatives in
    this cause. Thank you, Bobby.
        I'd also like to pay some recognition to a person here who has for
    many years, more than I can remember, pointed out to the American people
    that most poor folks in this country and most people who have been left
    outside of the mainstream want a hand up, not a handout, Reverend Jesse
    Jackson. Thank you for being here.
        Ladies and gentlemen, as you know, I have just returned from the
    summit of the world's seven industrial nations in Tokyo. What I saw

    [[Page 1085]]

    there indicated to me that, from Harlem to the south side of Chicago, to
    south central Los Angeles, there is a feeling shared from Tokyo to
    Toronto: People want more control over their lives, their families,
    their communities, and their countries. The movement for political
    reform is running in high gear in all these countries because there is
    such a demand for economic opportunity so that people can live up to
    their God-given abilities.
        This administration has tried to pursue this demand in two ways:
    first of all, to have a good overall economic policy, a policy for
    bringing the deficit down, a policy for increasing investment in our
    country, a policy for broadening the rules of trade in ways that help
    Americans who are working for a living. But secondly, we have to
    recognize that there are certain specific problems that are unique to
    our country, unique to our States, unique to our communities. And they
    require a specific response. And so we have developed a technology
    policy, a policy for defense conversion for communities and people who
    have been hurt by cutbacks in defense spending. We have sent to the
    Congress a proposal to create empowerment zones which will complement
    this effort, to encourage people to invest in distressed rural and urban
    communities in this Nation. And today we take up the community financing
    issue.
        A few days ago when I was in Japan working to build a new global
    economy, my hand was strengthened because of the progress that has been
    made in Congress in dealing with these larger issues, reducing the
    deficit and investing more in education and training. It enabled me to
    ask our friendly competitors to lower their trade barriers so that we
    can increase American jobs and American exports, to work with us to
    increase economic growth, keep interest rates down, and make common
    cause to battle high unemployment, which is a problem in every advanced
    nation in the world today.
        Today I will report to a bipartisan leadership meeting of the
    Congress on the achievements of this summit. But I will also have to
    tell them that the challenge remains. We can only enjoy the fruits of
    the opportunities created at the Tokyo meeting if we follow through on
    the commitment to pass the economic plan now before the Congress and if
    we take the initiatives like the one we're here to celebrate today.
        To those who would do nothing or let us slide back into the status
    quo, I would say that we must go forward. We must adopt the largest
    deficit reduction plan in our history. Look how low the long-term
    interest rates are now because of the efforts that are being made. We
    must adopt these strategies to bring jobs to America. We must maintain
    our Nation's leadership in the global economy. On the issue of whether
    there must be economic change in a nation desperate for jobs and growth,
    there can be no doubt of the answer.
        Today I am sending to Congress an innovative proposal that will
    bring new life and new opportunity and new directions to communities all
    over America that lack capital and credit, the kinds of basic banking
    services that these three fine people needed so badly and had to look so
    long for. This proposal creates a fund to provide grants to new and
    existing community-based lenders. The fund will provide about $400
    million over 5 years and will employ a number of measures to increase
    significantly the total money provided to communities through these
    community institutions.
        Under this plan every dollar the fund provides to a community
    development bank must be matched at least by another dollar of private
    capital. Other community development financial institutions will also be
    required to match assistance as well. The Treasury Department predicts
    that this matching requirement and the leverage provided by the
    institutions will produce at least $2 billion in additional investment.
        If you look at the size of the average loan in these kinds of
    institutions leading to the number of jobs created that are represented
    by the three fine people on this platform today, the potential for
    creating new jobs in America through this initiative is absolutely
    enormous. And they can be created in places where people have long given
    up on the free enterprise system simply by making the free enterprise
    system work for a change for those people.
        These institutions come in a wide variety of sizes and shapes. They
    are banks with a special commitment to community development. They are
    community development banks set up for that purpose only. They are
    credit unions. They are microenterprise loan funds. I can tell you this,
    most of the enterprises that we are talking about helping, that were in
    existence in the 1980's that made loans to poor people who lived in
    their community or to struggling small business people had a lot lower
    failure rate than some of the high-flown financial schemes that

    [[Page 1086]]

    were subsidized by other Government policies in the last decade.
        Because of the commitment and understanding of people in all
    different kinds of financial institutions, every type of community
    development financial institution will be eligible for assistance under
    our program. The existing network of community lenders have demonstrated
    that when there is a constant commitment to this kind of development you
    can produce growth and jobs.
        Many of you with us today, from Chicago's Shore Bank to North
    Carolina's Self-Help Credit Union to Arkansas' Elkhorn Bank--which Mack
    McLarty and the First Lady served on the board of, and which I helped to
    raise funds for when I was in a previous position--understand how
    economic growth is built from the grassroots. It works in urban areas.
    It works in rural areas. We were wondering when we set up this bank in
    Arkansas whether small towns and rural areas really could benefit from
    the kind of strategy that had worked so brilliantly for the South Shore
    Bank in Chicago, and the answer turned out to be a resounding yes.
        The Government's role in this is crucial, but limited. The real
    solutions must come from the community, from the people who live there
    who know their neighbors. It is our job to empower those communities
    with the tools they need to generate growth and jobs, and then let the
    hard work and the determination of the people pay off.
        At the same time, I recognize that without the involvement and
    investment of major banks, low and moderate income communities will
    still be deprived of a full range of economic opportunity. The Community
    Reinvestment Act of 1977 requires that banks and thrifts meet the credit
    needs of the entire community in which they do business. And while the
    CRA has played an important role in making credit available to
    underserved urban and rural communities, I think we would all admit that
    it hasn't lived up to its potential. The current enforcement system
    relies too much on public relations documentation and not enough on real
    lending performance.
        This has been a pain for everybody involved: too much paperwork for
    the banks and not enough investment for the communities. That's why I am
    sending a memorandum to the four Federal banking regulators that
    requires them to implement a series of reforms around CRA, designed to
    increase investment in communities that need it, while simultaneously
    streamlining and clarifying the regulatory process. The policy will be
    good for banks, good for communities, good for borrowers, and it
    represents real change.
        These actions today fulfill a commitment I made during the last
    campaign when I promised that we would work hard to unlock the energy
    and the entrepreneurship that lies latent in the hearts and souls of men
    and women in this country in every community. This proposal will enable
    them to take a small loan and start a business, to turn their dreams
    into storefronts and then expand those storefronts into chains, creating
    jobs for their neighbors and bringing opportunities to their
    neighborhoods. It will make them a part of the movement for democratic
    capitalism and growth that is reshaping the entire world but has left
    too many Americans behind.
        Now, I'd like to introduce three people who are going to help us
    carry out these commitments: Hugh McColl, the CEO of NationsBank; Irving
    Henderson, the chair of the National Community Reinvestment Coalition;
    and Ron Grzywinski, the chairman of Shore Bank in Chicago.

    [At this point, Mr. McColl, Mr. Henderson, and Mr. Grzywinski spoke on
    community development banking.]

        I'd like to conclude this morning's ceremony just by saying again,
    as I did when I opened, that I know that every one of you who's worked
    in this field for any length of time has a story or personal stories
    that you could tell. And I just want you to know that I am grateful for
    the work that you have done and the role that each of you have played in
    bringing this bill to its present point.
        I got on this issue as Governor when I saw so many needs that were
    unmet, and when the now Under Secretary of Agriculture for Community
    Development, Bob Nash, and I worked hard to use our existing authorities
    to help people who couldn't have access to credit. I learned about the
    South Shore Development Bank. And through them I met a remarkable man
    named Mohammed Yunis, who told me how he, through the Grameen Bank, had
    made market rate interest loans to poor village women in Bangladesh, and
    over 95 percent of them had actually paid the loans back.

    [[Page 1087]]

        And then, this became part of our reinventing Government initiative
    of the Democratic Leadership Council and then an idea that the Vice
    President championed in his efforts to examine what we're doing here. A
    lot of you have helped me in my understanding of this. Floyd Flake
    showed me the businesses around his church. Hugh McColl stayed up half
    the night one night talking with me about the Community Reinvestment Act
    and how we could make it work. My friend, Charles Stith there, from
    Boston, has spent years on this.
        To all of you who have played any role on this, I thank you very
    much. And I ask you now to work with this wonderful representation from
    Congress to make sure we get the job done and do it in a hurry. Thank
    you. We're adjourned.

    Note: The President spoke at 12:12 p.m. on the South Lawn at the White
    House. In his remarks, he referred to Timothy Bazemore, founder and
    president, Workers Owned Sewing Co.; Beverly Ross, owner, Lakeview
    Stables; Joseph Holland, owner, Ben and Jerry's Ice Cream Franchise of
    Harlem, New York, NY; Lawrence B. Lindsey, Federal Reserve Board
    Governor; and Rev. Charles R. Stith, national president, Organization
    for a New Equality (ONE).