Banking plan aids growth.
James M. Shirley, president and chief operating officer at Drexel, ranked No. 8 on the 1992 BE FINANCIALS LIST with $123 million in assets, hopes TIAA/CREF's program, "will encourage other major organizations to originate meaningful reinvestment programs." Under its Treasury Tax and Loan Deposit Administrative Program, TIAA/CREF deposits approximately $125 million in federal tax withholdings from its employees' payroll and its retirement system annuities into an account at Drexel National Bank. Drexel, a subsidiary of Indecorp Inc., the nation's largest African-American multi-bank holding company, then distributes the funds to several minority-owned banks. Ten percent of the earnings from these deposits go toward the National Bankers Association (NBA) Scholarship Fund, which funds the education of personnel at NBA member financial institutions.
The second component of the Minority Banking Program is an Investment Deposit Program. TIAA/CREF has purchased $100,000 certificates of deposit from 14 minority-owned banks. They include Chicago-based Seaway National Bank (No. 3), Washington, D.C.-based Industrial Bank of Washington (No. 4), Dallas-based First Texas Bank (No. 12) and Boston-based Boston Bank of Commerce (No. 15), which are all ranked on the 1992 BE FINANCIALS LIST. Both components of the program strengthen the deposits of the participating banks, allowing them to invest in minority communities.
NBA director of special projects Everett Wallace, says TIAA/CREF's initiative is "the first step in the kinds of relations minority banks would like to develop with the pension fund community." Through major deposits, he says, pension funds could engage in commercial lending by allowing minority institutions to originate the loans. Pension funds could also invest by purchasing pooled mortgage loans or mortgage-backed securities directed at minority communities served by minority banks. "If more corporations and pension funds look at ways to help minority communities, we can have redevelopment going on in urban American cities," says Wallace.
"We can't pretend that we will make a dramatic difference economically by ourselves," says Tom Jones, TIAA/CREF executive vice president of finance and planning. "But if more institutions do the same, cumulatively, it will have a positive effect."
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|Title Annotation:||new Minority Banking Program|
|Date:||Dec 1, 1992|
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