It is no news that the coronavirus crisis has disproportionately hurt small businesses. As top elected officials finally decide on how to provide financial relief for small businesses, and how much assistance the government will allocate to them, those who were most affected by the immediate economic and social effects of the Coronavirus have been black-owned businesses.
So how can black-owned businesses put their business in a more secure position to stay strong and recover faster once the crisis subsides? Martin Ekechukwu, a serial entrepreneur and Co-founder of WHTWRKS, a marketing company that works with small business brands and prepares them for international expansion and 10x growth, recommends these strategies to help black-owned businesses recover faster.
- Adapt quickly and furiously to survive. If you’re a restaurant owner who has been forced to closed, make sure you are well equipped for delivery services. Get a website up quickly or develop a partnership with another complimentary foodservice business to expand your offerings.
- If you’re a marketing and creative content company, modify your offerings to make it all about digital services, influencer content, or ideation. Figure out what costs you the least to do and do more of it. Ideation is the cheapest thing to do and sell – figure out how to bring a POV that is unique and sellable.
- Connect with your supportive community through technology. There are sites and apps dedicated to rallying around black-owned businesses during this crisis. For example, Offical Black Wall Street is a directory of Black-owned businesses across the globe created to encourage individuals to circulate money in the Black community. Also, Strivers Row project lists dozens of black-owned businesses in New York City.
- TAKE ADVANTAGE of the stimulus package. The new bill provides federally guaranteed loans to small businesses that pledge not to lay off their workers. The loans would be available during the emergency period and would be forgiven if businesses continue to pay workers for the duration of the crisis.
Additionally, on Tuesday, March 31st, from 12:00 pm – 1:00 pm (EST), Martin, alongside Fallon Ukpe (Zeal Capital Partners) and Owen May (MD Global Partners), will be hosting a free virtual fireside chat about what businesses can do to manage through the Coronavirus crisis.
Small businesses in Milwaukee face significant challenges as a result of Covid-19. Crucial public health precautions have temporarily closed many businesses, and those that remain open face restrictions that impact their bottom lines.
The Milwaukee Department of City Development is maintaining an online resource directory to assist businesses to identify the help that may be available. The webpage is a compilation of local, state, and federal programs; it also provides information on financial support, operational support, and a link to the City of Milwaukee Health Department’s page for public health rules and recommendations.
The resource directory can be reached at city.milwaukee.gov/DCD/
“Small local businesses are extremely important to the Milwaukee economy, and, for many, the challenges presented by the spread of Covid-19 can threaten their existence,” Mayor Tom Barrett said. “I want every available tool to be used to support our small businesses, and that’s why we are compiling and publicizing this city resource page.”
The resource directory has been put together and maintained by the DCD Commercial Corridors Team. Updates are made to the page as additional information is available. The directory includes summaries and links to a wide range of programs. It also provides information in Spanish.
The City of Milwaukee is subject to Wisconsin Statutes related to public records. Unless otherwise exempted from the public records law, senders and receivers of City of Milwaukee e-mail should presume that e-mail is subject to release upon request, and is subject to state records retention requirements. See City of Milwaukee full e-mail disclaimer at www.milwaukee.gov/email_
MILWAUKEE – Milwaukee County Supervisor Sequanna Taylor has launched an online petition urging Governor Tony Evers to issue an emergency administrative order that would ensure housing security during the corona virus crisis, by allowing people to hold off on paying their rent, mortgage, or utility bills.
“In these challenging times, when working people are focused on following government directives to protect their health, worried for their family’s safety, and anxious about their financial security, no one should have to worry about losing the roof over their heads.
“Everyone deserves to know that they are safe and secure in their homes and won’t end up on the street due to foreclosure, or failure to pay rent or utility bills, especially when we are asked to stay home to protect the safety and health of everyone in our community.
“We are calling on Governor Evers to recognize the importance of housing security, and issue an emergency administrative order declaring that no one should be required to pay their mortgage, rent, or utility bills during the Covid-19 public health crisis,” said Taylor.
Taylor’s petition is available online here: https://www.change.org/p/tony-evers-governor-evers-suspend-mortgage-rent-and-utility-payments-during-covid-19-pandemic.
More than 600 people had signed the petition by Monday.
Legislation expands emergency support to keep businesses running and workers on the payroll throughout crisis
WASHINGTON, D.C. – As Congress considers economic stimulus legislation, U.S. Senator Tammy Baldwin today introduced a plan to support small businesses hurt by the coronavirus pandemic.
“The economic stimulus response from Congress must provide small businesses the federal resources they need to stay in business and get through this economic crisis,” said Senator Baldwin. “My plan expands direct aid to small businesses so they have the resources they need to keep moving forward, and keep their workers on the payroll.”
Senator Baldwin’s plan would build off of the first emergency response legislation that Congress passed, and President Trump signed, earlier this month. Baldwin’s legislation would increase Small Business Administration Economic Injury Disaster Loans from $2 million to $10 million so that small businesses have access to badly needed financial resources in order to pay their employees and keep up with their operating costs, like rent, utilities and interest on debt. The expanded loans would be available to any small business that has suffered from lack of demand or forced closure like bars, coffee shops and restaurants.
Baldwin’s plan would also provide small businesses loan forgiveness for any economic injury disaster loan granted under the Small Business Administration COVID disaster declaration if the small business employer maintains 100 percent of its staff at full pay and full benefits throughout the duration of the declared disaster. In addition, her plan would waive a current requirement that a small business demonstrate they are unable to obtain credit elsewhere.
Text of the legislation is available here.
Legacy Redevelopment Corporation (LRC), a U.S. Treasury-certified Community Development Financial Institution (CDFI) that provides strategic lending solutions to Milwaukee’s underserved markets, has named Terese Caro, MBA, its new president effective today. Caro joined the LRC team in July 2016, bringing years of commercial lending expertise to her roles as vice president and chief lending officer. As president, Caro replaces José A. Mantilla who will remain on as a senior advisor through the end of the year. LRC also named Richard Lincoln as its newly elected board chair.
“On behalf of the LRC board of directors, I congratulate Terese and look forward to watching her continue to drive our organization forward,” Lincoln noted. “In her years with LRC, Terese has consistently proven herself to be an exceptional leader who embodies the LRC mission to foster financial independence, sustain growth, and revitalize communities.” He continued, “Terese has a true passion to provide Milwaukee’s small businesses with the capital they need to open their doors and grow, along with the education, tools, and development needed to ensure long-term success.”
Caro has spent nearly 30 years in banking and finance, managing a diverse portfolio valued at over $500 million in loans and assets. As LRC’s vice president, she oversaw a $10.9 million loan portfolio consisting of small business, new construction/rehab and commercial/retail real estate loans. In addition, she has been instrumental in forging local partnerships to pursue opportunity zone redevelopment projects.
“We also owe a debt of gratitude to José for his insightful leadership and are thankful that he will remain on as an advisor through 2020 to ensure a seamless transition,” Lincoln said. “Since joining LRC as president and CEO in 2016, José has led significant developments for our organization and for Milwaukee as a whole, including a revitalized organizational focus on new construction and acquisition rehab.”
Previously, Mantilla held leadership roles at three Milwaukee financial institutions, M&I Bank, Legacy Bank and North Milwaukee State Bank, as well as at KeyBank, N.A. in Cleveland. Both Legacy Bank and North Milwaukee State Bank were minority-owned and -operated.
A long-term LRC board member, Lincoln brings over 50 years of public and private sector experience to his new leadership role, having played the lead role in the construction or rehabilitation of more than 3,000 multi-family housing units and over 1.5 million square feet of office and retail space in Wisconsin, Illinois and Minnesota. He retired as senior vice president of Mandel Group, Inc. in 2015 and remains professionally active as a development and finance consultant to a variety of regional real estate development initiatives. Lincoln assumed the board chair role from Troy Reese, president of T.L. Reese Construction.
Since 2003, LRC has provided hundreds of loans valued at over $18 million and created or retained thousands of jobs. Learn more at lrcmke.com
CFPB lawsuit settlement forces agency to collect data on credit access
March 5, 2020
For much of Black America, access to fair and responsible credit has been an elusive promise. Whether as consumers seeking the pride of homeownership or businesses seeking to begin or expand, securing credit remains an age-old, arduous and often frustrating pursuit – despite a slew of federal and state laws enacted to overcome these long-standing racial disparities.
But on February 26, the Consumer Financial Protection Bureau (CFPB) settled a federal lawsuit brought by small business owners and advocates who together challenged CFPB’s lack of enforcement of anti-discrimination laws that protect minority-owned and women-owned businesses from unequal access to financial products and services. The lawsuit charged the CFPB with failure to issue required regulations that mandate financial institutions to collect and maintain important data for these two types of businesses.
The settlement sets out specific, time-lined goals as well as an ongoing review process. Although its terms require federal court approval before it can take effect, plaintiffs were jubilant in their ability to force CFPB into collecting and disclosing data.
“It’s safe to say that without this lawsuit, the Trump administration would be content to continue its unlawful refusal to protect women, minority, and small business owners from discrimination,” said Anne Harkavy, Executive Director of Democracy Forward that represented the plaintiffs. Based in the District of Columbia, this nonprofit organization has a two-pronged purpose: publicly speaking about unlawful government acts and empowering those who have been harmed to fight back.
Plaintiffs in the case include the National Association for Latino Community Asset Builders (NALCAB), and small businesses located in Waterloo, Iowa and in Portland, Oregon.
Paulina Gonzalez-Brito, Executive Director of the California Reinvestment Coalition, also reacted.
“For nearly a decade since Dodd-Frank became law, our members throughout California have been on the frontlines pushing for this rule to move forward,” noted Gonzalez-Brito. “This settlement is a victory for impacted communities and small business owners of color striving to build wealth and a better life.”
Key actions that CFPB has agreed to include:
- By September 2020, publicly release a draft proposal for collecting small business data;
- By October 2020, establish a Small Business Advocacy Review panel that will offer direct input on behalf of the small business plaintiff groups;
- In negotiation with plaintiffs establish deadlines for each stage of rulemaking – including a final data collection rule;
- Every 90 days, submit status reports detailing CFPB’s progress toward the data collection rule; and
- Accept court-ordered deadlines if parties fail to agree.
Strong and credible data collection can and often does make the difference between anecdotal critiques and eventual court actions. Particularly for Black businesses, the vigilant and long-term struggle for access to credit has often translated into home equity loans for financing new businesses or expansion. But without access to affordable credit and an absence of home equity, the likelihood of Black businesses being under-capitalized runs high.
At the same time, ample data paints a picture of drastic disparities when it comes to Blacks buying a home.
On February 25, a day before the CFPB settlement, the National Association of Realtors (NAR), that represents over 1.4 million members in every aspect of residential and commercial real estate, released new research on the difficulties consumers of color continue to confront when buying a home. Analyzing data from 2008 to 2018 that was gathered by the U.S. Census’ American Community Survey, and its 2019 Profiling of Home Buyers and Sellers, findings are once again stark.
From 2016 to 2019, according to NAR, homeownership rates among Whites has consistently exceeded 71%. Homeownership rates for this demographic were highest in the Midwest and Deep South, ranging from a statewide high of 78% in Mississippi, followed by 77% in Michigan and South Carolina, and 76% in both Minnesota and Alabama.
But Black homeownership rates in these same years and states reveal eye-opening comparisons. While Black homeownership is 41% nationwide, it is 50% or more in only three states: Mississippi (54%), South Carolina (51%), and Alabama (50%).
Further, in 17 states, the Black homeownership rate is less than 40%, with some of the lowest rates occurring in Wisconsin (23%), Minnesota (24%), and Nevada (28%).
Even lower levels of homeownership in states with sizeable Black populations were found in California (34%), District of Columbia (36%), Illinois (39%), Missouri (37%), and Texas (39%).
Rates of rejections on mortgage applications continue these racial disparities. While White applicants were rejected at a rate of 5%, Black applicants were rejected nearly triple that of Whites at 13%. First-time homebuyers, an important indicator of market performance, are frequently Black at 51%. By contrast, 87% of White homebuyers previously owned homes.
Additionally, among Black homebuyers, less than half – 49% – were married couples and the number of single Black women purchasing homes (34%) was double that of single White females (17%). The reasons for purchasing homes also diverged: 46% of Blacks cited a desire to own, while only 26% of Whites shared that same sentiment.
So, what do these and other data points reveal?
Despite lower incomes, Black consumers have a pronounced desire to own their own piece of America. As many Black females delay marriage, they are becoming homeowners at a rate more than three times that of Black males (9%). It’s also a clear indication of a growing trend among Black females who are asserting financial independence. Homeownership for many of these women no longer is tied to marriage as it once was for generations past.
But more importantly, whether as a business owner or a consumer, access to credit remains difficult and daunting for Black America. Our quest for financial justice remains a journey.
“When the CFPB complies with this court order and collects data on small business lending, the marketplace will be more efficient and fairer,” said NALCAB’s Executive Director Noel Andrés Poyo. “Transparency is the ultimate antidote to discriminatory and predatory lending.”
Charlene Crowell is a Senior Fellow with the Center for Responsible Lending. She can be reached at [email protected]
February 21, 2020
For consumers, businesses, organizations and governments alike, annual budgets typically reflect not only line items but priorities as well. As A. Philip Randolph reminded us more than 50 years ago with the release of the “Freedom Budget”, such documents reflect the morals of our nation. Especially when they show how much we value the most vulnerable among us.
The recent White House fiscal year (FY) 2021 proposal would fund the Defense Department at $636.4 billion dollars, a slight increase above that of FY 2020. At the same time, $339.1 billion in budget cuts are proposed. These cuts would severely impact the nation’s social service safety network, comprised of a wide range of services and programs like food stamps, consumer financial protection, low-income energy assistance, enforcement of federal laws, transportation projects, environmental remediation and more.
And at a time when higher education is increasingly essential to the nation’s economic future, the White House proposal would eliminate$5.6 billion, a 7.8% reduction from current levels.
“Eliminated programs include Federal Supplemental Education Opportunity Grants, which duplicates Pell Grants but are less targeted on those who need the most help,” states the Education budget summary.” Its summary also notes how the budget “protects students by eliminating default for impoverished borrowers” and “closing loopholes currently allowing high-earning graduate degree holding borrowers to avoid repaying their student loans, leaving taxpayers holding the bag”.
To be clear — no one really chooses to default on a student loan. Defaults occur when loan payments exceed a borrower’s ability-to-repay, not a willful choice. A significant number of these defaults were incurred at high-cost for-profit colleges.
Research and analysis by the Center for Responsible Lending finds that although for-profit college enrollment represents 6 % of all college students, these schools generate over 33% of all students who default on their loans. Further, CRL found that only 21% of all for-profit students in four-year programs graduate within six years.
Today there are over 44 million student loan borrowers whose growing reliance on loans corresponds with the still-rising cost of higher education. Except for the financially well-off, student loans are being used more, not less, and include consumers of varying income levels.
If these cuts take effect with Congress’ approval, the federal commitment to higher education will become yet another funding retreat begun nearly a decade ago at the state level.
“State funding for public colleges and universities has steadily declined, contributing to higher tuitions for most students,” say James Kvaal and Jessica Thompson, co-authors of a new policy brief by the University of New Hampshire’s Carsey School of Public Policy. “State funding is not only declining but it is also distributed inequitably.”
“The maximum Pell grant – the federal college scholarship that helps low-income students pay tuition and living expenses – today covers only 28% of college costs, the lowest share in over 40 year,” continued Kvaal and Thompson. “The current financial aid system is not only underfunded but is not designed to help students meet extra needs or absorb unexpected financial blows.”
Even so, the White House education budget proposal would carve out more than $2 billion for Career and Technical Education (CTE) state grants and CTE National Programs. Eligible CTE recipients could be private businesses offering short-term, training or apprenticeships. Under the proposal, Pell Grants could be also used for CTE training, siphoning off funds traditionally used at two and four-year institutions.
To put it another way, taxpayer-funded on-the-job training – as short as 30 days or as long as six months – could soon enhance the profit margins of businesses. Historically, higher education leads to a credential – an associate, bachelor, or graduate course of study that upon completion leads to a higher competitive edge in the general marketplace.
“As States begin to think about their long-term career and technical education strategies,” said Education Secretary Betsy DeVos, “I would encourage them to continue to act boldly and break down the silos that exist between education and industry so that all students are prepared for the in-demand, high-paying jobs of today’s economy and tomorrow’s.”
What does seem to be bold is an administration that consistently and deliberately seeks new ways to benefit private enterprise at the public trough. These new funding streams are also accompanied by departmental deregulation that “streamline and reduce unnecessary costs with accreditation”, states the budget summary.
Sounds like in the name of ‘deregulation’, this administration is intent on eliminating more ‘checks and balances’ on the use public monies.
“Instead of preventing predatory institutions from wasting taxpayer dollars, Secretary DeVos is undermining the federal investment in higher education by shielding the interests of for-profit institutions and private corporations that prey on students of color, low-income borrowers, veterans, women, and older Americans,” said Ashley Harrington, CRL’s Federal Advocacy Director. “We urge Congress and the current Administration to stop protecting these predatory institutions at the expense of already vulnerable and marginalized groups.”
Charlene Crowell is the deputy director of communications with the Center for Responsible Lending. She can be reached at[email protected]
Lessons in entrepreneurship, skill-building, and leadership
MILWAUKEE, WI— Expert speaker and FOCUS Training Executive Partner Matt Meuleners released his first book, Geek Deep: Tapping the Limitless Potential of Masters, Makers, and Missionaries on the Fringe. The book launch was celebrated on February 20, 2020, at local gaming pub Oak & Shield on 600 E. Ogden Ave.
Matt Meuleners speaks to over 100 audiences each year, ranging from business leaders to college students. He has presented to over 1 million people in his 20 years as a trainer. He has written Geek Deep to marry the components of a professional help book with unique narratives to guide genuine conversations between business leaders and those they lead.
Within Geek Deep, you will explore the quirky subcultures and communities born out of the fixation of various interests, uncover the powerful success behaviors geeks exhibit, and find practical guidance as a business leader looking to tap into latent strengths in your teams.
Why geeks? Matt Meuleners uses this controversial label to describe those who go above and beyond in their work and in their personal lives. He explains, “An ability to commit to that which moves you without shame or timidity is powerful. Great athletes practice to the exclusion of a social life. Great artists sleep in their studios. Great business leaders obsessively work to perfect their product and processes. The most successful among us wear their obsessions like a badge of honor.”
Matt Meuleners uses fascinating stories of real geeks across a wide range of interests to illustrate sound leadership practices. It is a humorous and conversational approach to serious talent management and business leadership concepts such as employee engagement, innovation, and brand development.
February 7, 2020
Once upon a time in Washington, Congress enacted the Dodd-Frank Wall Street Reform Act that also created the Consumer Financial Protection Bureau (CFPB). For the first time, a federal agency was charged to be the consumers’ ‘financial cop on the beat’. In its first four years, CFPB received 354,600 consumer complaints that led to $3.8 billion in restitution.
But now, under a different administration deregulation has swung the public policy pendulum in the other direction. A bold effort to benefit business and commerce focuses on growing customers, while taking the teeth out of consumer protection with the blessings of federal regulators.
Payday lenders are among the biggest beneficiaries of this policy about-face. Instead of a string of state legislative initiatives, favorable federal regulators are stepping up to help these predatory lenders with the cooperation of banks.
On February 5, a panel of public policy experts testified before the U.S. House Financial Services Committee, chaired by California’s Congresswoman Maxine Waters. The hearing entitled, “Rent-A-Bank Schemes and New Debt Traps”. The Chairwoman’s opening remarks set the tone of the forum.
“In a simple agreement between the bank and the payday lender, the bank is identified as the lender on the borrower’s loan document” stated Waters. “However, the payday lender immediately buys the loan from the bank and does every function related to the loan. In these partnerships, the payday lender bears at least 90% of the risk of borrowers’ defaulting on their loans.
“The payday lender then claims the right to charge consumer borrowers triple-digit interest rates because the lender is in partnership with a state- or nationally-charted bank that is exempt from usury laws by the National Bank Act,” added the Chairwoman.
Several panel members agreed.
“Predatory rent-a-bank lending exists for two simple reasons: there are no federal interest rate limits for most lenders, and most banks are exempt from state rate caps,” noted Lauren Saunders, testifying on behalf of the National Consumer Law Center. “Rent-a-bank schemes enable banks to help predatory lenders target communities that the banks are not serving with responsible products, offering loans the banks do not directly offer in their own branches. This is exactly the kind of predatory lending that the CRA is designed to prevent.”
For Creola Johnson, a chaired professor at Ohio State University Moritz College of Law testified that, “Through my research, I found that payday lenders want to keep borrowers in the dark. That is what rent-a-bank partnerships do. The consumer’s interactions are only with the payday lender, but the contract identifies some other entity as the lender.”
“Communities of color, often largely segregated due to the history of redlining and other federally operated or sanctioned racially exclusionary housing policies, experience higher rates of poverty, lower wages, and higher cost burdens to pay for basic living expenses,” noted Graciela Aponte-Diaz, Director of Federal Campaigns with the Center for Responsible Lending (CRL). “Payday lenders peddling unaffordable loans cause particular harm to these communities.”
“Indeed, the communities most affected by redlining are the same who are saturated by payday lenders today,” continued Aponte-Diaz. “Multiple studies have found that payday lenders are more likely to locate in more affluent communities of color than in less affluent white communities.”
CRL’s payday polling and research underscores Aponte-Diaz’ concerns.
A consumer poll commissioned by CRL and conducted from January 9-15 by Morning Consult surveyed approximately 10,000 registered voters and found that:
- 70% of voters support a 36% annual interest rate cap on payday and consumer installment loans.
- 62% have an unfavorable view of payday lenders; and
- 61% prefer a payday loan rate cap that is even smaller than 36%.
Today, 16 states and the District of Columbia have enacted strong rate caps for short-term loans. For the remaining 32 states, triple-digit interest loans are legal and highly profitable. According to CRL, every year predatory short-term loans snatch an estimated $8 billion in fees from the pockets of America’s working poor: $4.1 billion in payday lending, and $3.8 billion in car-title loans.
Keep in mind that the typical payday loan of $350 comes with an average annual percentage rate of 391%. For lenders, the predictable result is that one loan will often be re-borrowed 10 times or more in a year. Similarly, car-title loans that use a personal vehicle as collateral is re-borrowed an average of eight times, with one of every five borrowers losing their car in repossession.
Fortunately for consumers, a pending bipartisan House bill would end triple-digit lending with a 36% rate cap on all consumer loans. Sponsored by Representatives Jesús “Chuy García from Chicago, and Glenn Grothman, whose district includes parts of Milwaukee, the legislation is known as the Veterans and Consumers Fair Credit Act, H.R. 5050. An identical companion bill in the Senate, S. 2833, is led by Senators Jeff Merkley of Oregon and Ohio’s Sherrod Brown.
The measures would grant all consumers and inactive military the same protections now afforded active duty service men and women under the Military Lending Act (MLA). MLA was enacted with bipartisan support and imposes a 36% rate cap.
Endorsed by several organizations including the Leadership Conference on Civil and Human Rights, NAACP, and UnidosUS, at press-time, 11 co-sponsors signed on to the legislation and additionally includes Members of Congress from California, Michigan, New York, and Texas.
Here’s wishing that in 2020 consumers can lose the financial bruising wrought by these and other predatory transactions. Stay tuned.
Charlene Crowell is the deputy communications director with the Center for Responsible Lending. She can be reached at[email protected]