Community development bank may yet emerge

The Place: Baltimore. Time: The summer of 1992.

The Plan: A group of this city's most affluent black businessmen propose to pool their resources, buy a failing savings and loan institution from the federal Resolution Trust Corporation, and turn it into a community development bank. The new institution would be modeled on the fabled South Shore Bank in Chicago. It would have as its sole mission the economic development of Baltimore's poorest neighborhoods -- the financial empowerment of some of this city's most impoverished citizens.


The Result: Several months of intense anticipation, a flurry of planning and then -- nothing. Potential investors drift away. Major foundations balk at contributing to the project. The excitement dies.

The Moral: Well, the moral of this tale is not what you might think. The moral is not even what some of the participants think.


"I was very disappointed," says one businessman, who asked that he not be identified. "To me, the whole thing proved that folks in Baltimore are not ready to take the next step into the big time."

"What it said to me," recalls another businessman who also spoke on condition of anonymity, "was that some blacks in this city do a whole lot of talking about what ought to be done, but they have a hard time putting aside their personal agendas and working together."

And, says the Rev. Peter W. D. Bramble, who brought the group together: "As a city, we were not capable and ready to bring this project to fruition. Some of us had massive fears about taking that first step. Some of us had the desire, but not the capability to make it happen."

Father Bramble adds: "However, I have to tell you that I am not giving up. We have got to get involved in the economic life of this city in a serious way, otherwise everyone will pass us by. You have not heard the end of this idea."

In fact, the businessmen who participated in the project last year did not want to go on record about their efforts primarily because they are continuing to explore ways of creating a community development bank here. The Morris Goldseker Foundation recently commissioned a study, in conjunction with South Shore Bank executives, to determine the feasibility of replicating their model here. And early this summer, President Clinton proposed a four-year, $382 million federal program to DTC encourage this type of financial institution in rural and inner-city communities that are struggling economically.

All of this suggests to me the true moral of last year's apparent failure: You want a new Renaissance here? Well, the talent exists to make it happen. The vision, and even the resources, exist. But new institutions do not spring up overnight. Often they are created only after a long, heartbreaking process replete with false starts, mistakes and failures.

Chicago's South Shore Bank -- founded 20 years ago by a coalition of charities, churches and area foundations -- provides mortgage and venture-capital loans to low-income communities that generally are ignored by mainstream banks. South Shore has been touted as a development model both for impoverished American communities and Third World nations.

"A good community development bank would function like the goose that lays the golden egg," explains Father Bramble, pastor of the Church of St. Katherine of Alexandria in West Baltimore. "Its very nature would be to make good things grow; not once, but again and again."


Under Father Bramble's original vision, the community development bank also could use the expertise of its officers to help area churches create a network of credit unions, which would make small, short-term loans to members. Those credit unions, in turn, would nourish the bank by encouraging members to save.

The concept created a great deal of excitement within the African American business community here. Now, many leaders feel their first attempt ended in failure.

I think they are being premature. Efforts to create a community-based lending institution continue, though things may not be happening as fast as the planners had hoped. Cynics may despair at the process, but poets would rejoice at this persistence of vision.

Call me a poet.