When Willie Lomax examined the investment record of the Highland Community Bank, he was outraged.
Well, not not the bank itself, but its officers. In fact Highland is one of only four black-owned banks in Chicago. And many of its officers–including president George Brokemond and board member Charles Davis–have strong ties to the most important civic groups and organizations in the black community, particularly Operation PUSH.
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In the meantime, the coalition finds itself against the wall. They are a small community group operating out of a church on a seedy section of 110th Street. Highland Bank, on the other hand, is a well-entrenched institution, championed by such civic leaders as Jesse Jackson–a fact the bank is not likely to let Lomax forget.
Lomax’s weapon is a little-known federal law called the Community Reinvestment Act, which aims to induce banks to lend money in low-income communities.
From the outset, however, the skirmish with Highland has been different. For starters, Highland’s assets are not as deep as Beverly’s. The Roseland group therefore asked for no dollar commitment on loans. Second, because its officers are blacks, Highland is not so vulnerable. In its battle with Beverly, CRCCC won the backing of blacks from outside Roseland. The Chicago Defender championed their cause. And Beverly’s bankers, who did not want to be called racists, were eager to accommodate. But prominent blacks have exerted little or no pressure on Highland’s leaders (none of whom could be reached for comment). And the bank’s leaders insist that their record of contribution to the black community is beyond reproach.
Similarly, offering loans to an entrepreneur who has rights to a McDonald’s or Kentucky Fried Chicken franchise provides no additional revenues for a community. These businesses most likely will succeed, or else the fast-food corporation would not invest there. Again, most banks would be willing to underwrite these deals.
Highland is not First National; it is a small bank with limited resources. Its commitment to black Chicago, one might argue, should not outweigh fiscal prudence. Or, as Charles Davis told the Chicago Tribune: “You know how banks fall? Bad loans. It means that you have to be an exceptionally good manager to survive in an area where the eight-year attrition rate is 50 percent.”
