Teachable Moments

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According to an analysis of the most recent census data, the wealth gaps between the whites and minorities have grown to their widest levels in a quarter-century. The recession and uneven recovery have erased decades of minority gains, leaving white people on average with 20 times the net worth of African Americans and 18 times that of Hispanics. While the urban community is among those hardest hit by this financial downturn there is an important opportunity to translate the economic hardship we are all experiencing into “teachable moments” about financial literacy.

We must begin with an acknowledgement that the majority of families and organizations in urban communities are meeting their financial obligations. We are working, paying our bills, budgeting and saving for the future. This acknowledgement is important because there is tremendous media attention and justifiable concerns about families and organizations that have been impacted by the financial downturn and have faced foreclosure. However, there is not enough recognition of our financial responsibility.

As the largest Black-owned Bank in the country, OneUnited Bank has loaned more than $500 million to families and charitable institutions, including churches, in low-to-moderate income communities in Boston, Los Angeles and Miami and has had very few foreclosures and minimal losses. Over 90% of our customers are paying their loans as agreed. Our first “teachable moment” must be an understanding that urban communities are filled with responsible families and organizations who work hard to fulfill their obligations – even when they “hit a bump in the road”. By over emphasizing our financial challenges, we paint a picture of our community that is unsupported by the facts.

Conversely, there are instances when families and organizations are not able to meet their financial obligations, miss payments and are in default of their mortgages. Another “teachable moment” is that banks will work with borrowers to assist them in getting back on track. Foreclosure is the least desirable option. OneUnited Bank has experienced very few foreclosures or losses because we work closely with many borrowers with mutual respect and commitment to achieve a successful outcome. The success of “financial healing” and positive resolutions have received little media attention. However, the result is typically a family or organization that stands on a stronger foundation for future success.

In some instances, a bank’s effort to work with a borrower is unsuccessful and foreclosure is the only option. Another “teachable moment” is that a foreclosure only takes place when a borrower has missed several payments and is in default of their mortgage. It is a legal process that requires notifications to borrowers over a period of time, followed by a public notice in a local newspaper and ultimately a public auction of the property. Foreclosure is a painful process for the borrower and their community.

Recently, the press has published a number of articles about OneUnited Bank’s action in Boston. As an FDIC insured depository institution, the Bank has a process for working with borrowers who have had difficulty meeting their financial obligations. It is not the practice of the OneUnited Bank to foreclose on a mortgage in the absence of a borrower’s default. We trust the community will not rush to judgment without full knowledge of all the facts. From its inception as an outgrowth of the civil rights movement, OneUnited always sides with the community to protect our community’s assets. We also believe it’s important to translate the pain our community is experiencing into “teachable moments” about financial literacy.

Teri Williams

Teri Williams is President and serves on the Board of Directors of OneUnited Bank. She is responsible for implementation of the Bank’s strategic initiatives, as well as the day to day operations of the bank. These operational areas include all retail branches, marketing, compliance, lending, information technology, customer support, legal, and human resources.

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