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FINANCIAL INSTITUTIONS ANNOUNCE SOUTH CENTRAL LOS ANGELES CDC

 FINANCIAL INSTITUTIONS ANNOUNCE SOUTH CENTRAL LOS ANGELES CDC
 LOS ANGELES, Oct. 30 /PRNewswire/ -- Forty-five California lenders met yesterday at the Los Angeles Branch of the San Francisco Federal Reserve Bank to discuss the formation of the Southern California Business Development Corp. (SCBDC), a $10 million community development corporation (CDC) formed to make small business loans in South Central Los Angeles. The multibank community development corporation will begin operation at 4060 S. Figueroa St. beginning first quarter 1993.
 Federal Reserve Bank President Robert T. Parry opened the meeting by indicating the Fed's support of lender involvement in community investment activities. "Those of us at the Fed who are familiar with the CDC proposal support its formation because we know that there are credit needs in South Central L.A., particularly in the small business community that cannot be met with traditional bank financing," Parry told the group.
 As chairman of SCBDC, First Interstate Bank President and Chief Executive Officer Bruce Willison presented details for capitalizing the $10 million fund, which will provide equity investments and loans from the banking and thrift industry. The CDC will be organized so that, by meeting certain banking regulation conditions, investing financial institutions can carry the investment on their books under "other assets" with no risk rating.
 A survey of businesses in South Central Los Angeles early in the formation of the CDC determined what services are needed. Organizing committee member Gordon Lejeune of City National Bank said, based upon the survey, SCBDC will provide needed loans and equity investments to small businesses in amounts of $25,000 to $250,000 to finance virtually any legitimate business purpose, including fixed asset purchases, inventory and working capital and excluding refinancing of existing debt. The average term of the investments will range from two to five years.
 According to the organization's mission statement, the goal is to "stimulate community development and job creation by making debt and equity investments in small businesses which have growth opportunities and do not qualify for conventional financing."
 Lejeune also announced SCBDC's organizational structure. Business and affairs will be managed by a 15-member board of directors, which includes representatives from the community and shareholder banks. Investments will be approved by a six-member committee. An advisory committee of community representatives, who provide advice, marketing services and executive search services, includes representatives from Vermont Slauson Economic Development; Women and Minority Business Enterprises; Coalition for Women's Economic Development; Dunbar Economic Development Corp.; Pacific Asian Consortium in Employment; Drew Economic Development Corp.; Black Business Association; RLA; Don Lumpkin & Associates; Community Enhancement Corp.; MENTOR Network; and United Latino Fund.
 SCBDC will work in concert with the Community Financial Resource Center, a non-profit organization set up to provide education, training and other forms of financial assistance to businesses and residents in the same area.
 Other organizing committee members, in addition to Willison and Lejeune, are Hugh Loftus, First Interstate Bank of California; Gordon Smith, Federal Reserve Bank of San Francisco; Carlton Jenkins, Founders National Bank of Los Angeles; Suse Nakata, Bank of America; William Hanna, Bank Audi California; Keith Kosco, Morgan, Lewis & Bockius; and Jack Duggan, Dai-Ichi Kangyo Bank of California.
 -0- 10/30/92
 /CONTACT: Sandra Conlan of the Federal Reserve Bank of San Francisco, Los Angeles Branch, 213-683-2902/ CO: Federal Reserve Bank of San Francisco, Los Angeles Branch ST: California IN: FIN SU:


KJ-EH -- LA019 -- 7153 10/30/92 13:39 EST
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Publication:PR Newswire
Date:Oct 30, 1992
Words:565
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