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‘enlightened self interest’

CRA standards foster
‘enlightened self interest’

Happily, we are not alone. As we read so often in the Rochester Business Journal, signs are being hung and crates unloaded all over our city as entrepreneurs open the doors of new businesses. And every day, more and more families throughout our community are realizing the dream of a new home through affordable-housing programs offered through bank community-reinvestment initiatives.
Banks have a unique community- investment structure. Under the federal Community Reinvestment Act, strict regulations govern such activity. But rather than being burdensome, these standards provide some banks with a special opportunity to exceed what is required and to play a key role in revitalizing the communities in which we do business.
Call it “enlightened self-interest”: the stronger the community, the stronger the bank.
What are the results of this concept called reinvestment? Through low- to moderate-income mortgage lending and small-business financing, a dumping ground can be transformed into a bustling office park or an overgrown field into a row of new homes.
Such investments are the building blocks for stronger neighborhoods in which residents can take pride, work together and get to know each other better. We’ve all seen what an increase in home ownership can do for neighborhoods on the brink of revitalization–areas like Upper Falls and Marketview Heights. Community reinvestment can be the extra push they need to start–or keep–the ball rolling.
What’s more, when business decides to become more active in reinvestment, there are established conduits for action. In Rochester we are fortunate that our many professionally run community-based organizations, and government officials, are eager to work in concert with business on a variety of projects.
For example, banks participate in a variety of coalitions and consortiums with organizations such as the Ibero- American Investors Corp. and the Community Commercial Development program. While these groups receive the benefit of special project funding, banks are able to tap into the valuable resources these organizations offer–helping to channel available capital to those who can make the best use of it.
Through the “Footprints” program, for example, the Black Ministers Alliance and several area banks sponsor home-buying seminars and counseling for low-income home buyers. In addition to the banks providing capital for the program, bank employees also serve as mentors for participating families.
Recently, we teamed up with the city of Rochester to sponsor the Affordable Doubles program–assisting not only those who want to buy their own multiple-residence homes, but also residents who will be tenants and want to raise their families in high-quality housing in stable neighborhoods. Why the strong emphasis on home ownership? Owner- occupied homes are a catalyst for stability and revitalization. Home ownership encourages involvement in block clubs and neighborhood schools. People know their neighbors better and form neighbor- hood-watch groups to curb crime. Through counseling of first-time home buyers we help to ensure that owning a home–“the American Dream”– becomes a long-term reality for many area families.
Through home-improvement funding made available through community organizations and block clubs, we help owners maintain their pride in their properties and neighborhoods. If first-time home owners succeed, neighborhoods flourish, attracting further residential and business development.
This is the cycle of any truly vibrant, healthy community. Its importance is the reason why the Department of Housing and Urban Development has a goal to add 8 million families to America’s home-ownership rolls by the year 2000.
So while it obviously makes sense for banks to encourage home ownership, it is equally wise for other businesses to become more involved in these efforts in the spirit of “enlightened self-interest.”
There are surely tangible benefits to aggressively investing in the betterment of the community. It was especially gratifying when the Greater Rochester Community Reinvestment Coalition recently gave M&T Bank its “Good Neighbor Bank Award” in recognition of the many families and entrepreneurs we’ve helped to get a fresh start in a new home or business. It’s a distinction we take very seriously because we realize the important role neighbors play in building a better Rochester.
Brian Hickey is president of the M&T Bank Rochester Division and executive vice president of the bank’s parent company, First Empire State Corp.

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