How CRA Kept Bronx Man's Dream Alive

By Braitman, Ellen | American Banker, February 14, 1992 | Go to article overview

How CRA Kept Bronx Man's Dream Alive


Braitman, Ellen, American Banker


Jose Rodriguez has never heard of the Community Reinvestment Act.

Ask him about community lending, and he'll tell you it took him five years to get a $115,000 renovation loan to fix up the once abandoned apartment building he owns in the fraying Tremont section of the Bronx, a borough of New York City.

Without the law, however, the 34-year-old entrepreneur would be building castles in the air instead of the apartment house of his dreams.

Years of Saving

Mr. Rodriguez spent years squirreling away money from his salary as a meat market machine operator to buy the three-story brick building in the rubble-strewn neighborhood. In 1986, he put down $10,000 for the tenement. He borrowed the remaining $28,500 of the purchase price from New York City, which owned the building.

Mr. Rodriguez thought the next part would be easy. He needed a loan to pay for supplies to renovate the building and lay out five apartments for his family and tenants.

Instead, he spent the next five years in a revolving-door nightmare, shuttling from bank to bank to mortgage broker in fruitless attempts to finance the renovation.

It wasn't until two months ago that he was approved to receive a $115,000, 12-year loan at 7.5% interest from Neighborhood Housing Services of New York City. The nonprofit group got the money from a recently established $500,000 loan pool it administers for IBJ Schroder Bank and Trust Co., one of numerous foreign-owned and wholesale banks that have recently stepped up their community lending activities.

The Community Reinvestment Act was passed in 1977, but it wasn't until 1989 that enforcement was boosted as part of the thrift-bailout law. Banks that receive poor regulatory grades for investments in low-income communities hit roadblocks when they want to expand, merge, or gain new powers. They also face community scorn, since evaluations of their CRA programs are now made public.

Role for Community Groups

IBJ Schroder, which is owned by Industrial Bank of Japan, depends on organizations like Neighborhood Housing to help it fulfill CRA requirements. Like many foreign-owned U.S. banks, it does not have the retail branch structure out of which most CRA-credit loans and programs are administered.

Mr. Rodriguez, who now owns a photo development shop, is grateful for the loan. But he hasn't forgotten the banking nightmare.

"It's been like hell, the ups and downs," he said. "I gutted the building out in a week and a half, that's how determined I was. I put a lot of sweat into this."

Bankers know about sweat equity, but it doesn't count for much when they talk to their loan committees.

Big Banks Turned Their Back

Mr. Rodriguez, who works on Saturdays and many weekday nights with friends and relatives on the renovation, was turned down for his rehab loan by some of New York's biggest financial institutions -- Chemical Bank, Manufacturers Hanover Trust, Citibank, and Anchor Savings Bank.

He continues to do his personal banking with Citibank, but laughs ruefully at advertisements from banks that claim they are friendly and eager to finance small businesses. "Here I am putting money into the bank," he said, "and I can't borrow money."

Mr. Rodriguez, to be certain, is unsophisticated in the ways of finance. The young developer made a near-fatal mistake after the banks said no. He paid $3,300 in up-front fees to pair of mortgage brokers who promised to get him a home equity loan. He claims that he never got the money, and forfeited almost 75% of the fees.

IRAs Cashed In

To get the renovation under way, he liquidated $6,000 from his three individual retirement accounts and put about $9,000 on his credit cards to buy supplies and pay electricians and plumbers. "I had to do it in order for someone to look at this building a little more," Mr. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • A full archive of books and articles related to this one
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

How CRA Kept Bronx Man's Dream Alive
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

    Already a member? Log in now.