By Tracy Leary, Community Reinvestment Organizer, NTIC

At this year’s National Neighborhoods Conference, CitFinancial and NPA announced the second phase of their partnership: the Financial Education Program.

Two years ago NPA went after Citigroup because they had recently purchased the worst predatory lender in the country, the Associates. The goal was to change the way Citigroup did business. If the biggest bank could change their ways, then so could the entire banking industry!

In May 2003, NPA and CitiFinanical signed a landmark agreement to stop their loan shark lending practices, repair bad loans CitiFinanical made in our neighborhoods and to stop foreclosures on all disputed loans until they have been thoroughly reviewed. This signed, written two year partnership between Citifinancial and NPA outlines new Citifinancial policies and commitments against loan shark lending.

The first stage of the agreement (2003) was focused on collecting and fixing borrower complaints. To date, over 90 loans have been repaired. Of those, 70% were settled satisfactorily, with over $250,000 refunded or forgiven. On average, interest rates have been cut in half.

In 2004, NPA predicts that as many as 1,000 people will attend the financial education classes facilitated by the seven local NPA affiliate groups in Cincinnati, Cleveland, Indianapolis, Des Moines, Chicago, Syracuse and in Central Illinois.

Neighborhood Tours Wrap Up

This summer, CitiFinancial concluded their tours of NPA cities, which allowed them to see first hand the devastating impact bad lending has had in our neighborhoods. The first of those visits took place last summer when a team of CitiFinancial executives visited Chicago’s South Austin Coalition Community Council and Cleveland’s East Side Organizing Project.

On May 27, 2004 Syracuse United Neighbors kicked off the second round of those visits. “It was great having CitiFinancial come to Syracuse and see the houses we live in,” remarked Shelia Golden, a SUN leader, “I am sure they realized that some of our homes were over- appraised. I hope CitiFinancial will help us by writing off part of the loan and giving us a new, low interest loan to do the repairs that we desperately need.”

Iowa Citizens for Community Improvement was the next NPA affiliate visted by a team of CitiFinancial executives. On June 3rd, the CitiFinancial team, which was comprised of Martin Wong (General Counsel Global Consumer Group), James Garner (Senior Vice President and General Counsel), Mary Louise Preis (Senior Vice President & General Counsel), Dara Duguay (Director of Office of Financial Education) and Kathy Jordan (Associate General Counsel Global Consumer Group) met with CCI’s Predatory Lending Task Force members. At that meeting, the Task Force won $30,000 in reimbursements for two Iowa CCI members. “It was great to see Citibank officials in Des Moines, getting a better feel for the needs of Iowa. Having this agreement and a working partnership is a great stride in the fight against predatory lending. They listened to the concerns we voiced. Although they requested more time to answer some of our questions, they provided responses to others," stated Sally Riggs, an Iowa Predatory Lending Task Force Leader. "We are looking forward to our partnership meeting in July. This campaign truly goes to show you that the "little people" can make a difference against a corporation giant," she continued.

The Organization for a New Eastside (ONE) in Indianapolis was the next stop on the tour. On Friday, June 4th representatives from CitiFinancial toured the ONE turf (eastside of Indianapolis) and were able to witness first hand the effects of bad lending in communities. Vacant property disposition was a big concern expressed by ONE leaders the last time they met with CitiFinancial in May 2003. During this tour, CitiFinancial executives were able to see for themselves and hear neighborhood residents testimonies on the positive community impact that reselling foreclosed properties has had on Indianapolis. Reselling is preferred, rather than allowing properties to sit idle until they are sold at the county tax auction.

The CitiFinancial team was so impressed with the work of ONE leaders on the vacant housing issue and other projects going in the neighborhood that Martin Wong, declared ONE a "CRA assessment area," even though there are no Citibank branches in Indianapolis. Being a CRA assessment area allows ONE to have input on how they are rated by the banking regulators. This is a clear cut victory for ONE. "When banks start doing good lending in our neighborhoods, then people won't loose their homes," stated Dewey Tomey, ONE Board Chairman. In addition to ONE resident leaders, the president of Momentive Credit Counseling Services _ an ONE partner on financial education and literacy, was also on hand for the tour.

On June 22nd, CitiFinancial President and CEO Harry Goff and four other high-level representatives visited Cincinnati to meet with Working In Neighborhoods (WIN) and the NPA-member community groups, Communities United For Action (CUFA) and the WIN Action Organizing Project (WINAOP).

CUFA leaders escorted the CitiFinancial executives through the Cincinnati neighborhoods of South Cumminsville, Millvale, English Woods and Northside. They shared stories of their work in Cincinnati's public housing developments and their efforts to increase homeownership in their neighborhoods. "Because we're organizing, we can do almost anything," CUFA leader, Marcia Battle told CitiFinancial.

WIN toured the CitiFinancial team through one of its most recent first-time homebuyer, housing developments. Over lunch, homeowners testified to the life-changing education of WIN's financial literacy program. CitiFinancial was impressed by WIN's work, and Harry Goff was enthusiastic about potential partnerships around future rehab and financial literacy efforts.

The Cincinnati visit concluded with a meeting where CUFA and WINAOP members celebrated their victories and CitiFinancial borrowers had an opportunity to explain unresolved issues regarding their loans. "If it wasn't for the WIN Action Organizing Project and their work with CitiFinancial, I would have lost the house I've lived in for over 30 years," exclaimed WINAOP leader, Ann Johnson. The CitiFinancial team personally committed to investigating outstanding issues of two CitiFinancial borrowers, and they were open to receiving any future complaints from group members. Community leaders look forward to saving more homes from foreclosure and winning more affordable payments for families through this landmark agreement.

The Central Illinois Organizing Project (CIOP) welcomed CitiFinancial to Bloomington and its member church Wesley United Methodist on Wednesday, June 23rd. 20 CIOP leaders from across Central Illinois came out for the meeting with CitiFinancial CEO Harry Goff, General Counsel Mary Louis Pries, Executive Director of Community Relations Eric Eve and Senior Vice President of Marketing Gary Whiting. After introductions and an opening prayer CIOP presented an overview of the organization's mission and purpose and information on CIOP's organizing work including affordable housing, community reinvestment, predatory lending, living wage, and saving family farms.

The group then embarked on a community tour, which began with a personal welcome and conversation with the mayor of Bloomington. The next stop was at CIOP member organization Western Avenue Community Center where Cristina Deutsch explained the comprehensive financial literacy and support services the center provides to the growing Latino population in Bloomington.

The final stop on the CIOP tour was to Joy Care Prison Fellowship where Rev. John Brown shared his ministry with persons who are ex-offenders and the services he provides for them as they come out of prison. The group then returned to Wesley United Methodist Church and CitiFinancial agreed to consider working with CIOP to train its local managers on the details of the agreement. Three CitiFinancial borrowers then shared their loan situations and CitiFinancial committed to reviewing and repairing the loans within the next two weeks. Finally, before heading to lunch, CIOP presented a new financial literacy program called the Home Ownership Preparedness and Preservation (HOPP) project.

These tours definitely had an impact on CitiFinancial as well. "The plans made in each of the cities helped us to see the communities, organizations and to understand more fully their goals and challenges," states Mary Louise Preis, CitiFinancial SVP and General Counsel in a letter to NPA Co-Chair Inez Killingsworth.

"Sometimes a picture is worth a thousand words," stated Killingsworth in response. "It was good to show CitiFinancial what is happening in our communities rather than tell them. We looking forward to continuing our work with CitiFinancial to address the needs they witnessed in our neighborhoods."