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Cisneros on CRA
Henry Cisneros was the keynote speaker at PCI's annual CRA and Fair Lending Colloquium. He observed that the private sector can do much more than the government to cause change. Cisneros raised eight issues for the audience. First, financial institutions should see minorities as core business. This means delivering products that are important to this group as well as communicating effectively with them. Your future growth, he predicts, will come from these groups.
Second, train staff on these issues. You cannot ask staff to do anything for which they have not been trained. And he means real training - not a memo to staff.
Third, staffing must reflect the market. This is not for show, he warns; it is essential for getting business. As the fourth step, be sure that company culture is in sync with the goals.
Fifth, compliance and management need good information to understand and assess accomplishments (and failures.) The sixth challenge is to know and respond to the difference between predatory and subprime lending. This involves both information and creative underwriting.
Finally, Cisneros recommends two forms of outreach. Financial education, such as Money Smart, is key to reaching and preparing new markets. And marketing must relate to any new population in your market.
Copyright © 2003 Compliance Action. Originally appeared in Compliance Action, Vol. 8, No. 13, 12/03
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