Money Multipliers

By Melby, Todd | Independent Banker, February 2002 | Go to article overview

Money Multipliers


Melby, Todd, Independent Banker


Spurring economic development that mirrors real communities

Radio broadcaster Garrison Keillor spends most Saturday nights waxing poetic about the good people of Minnesota on his weekly entertainment program "Prairie Home Companion." Keillor delights listeners with tales of Norwegian Lutherans and German Catholics in the fictional small town of Lake Wobegon.

While there are plenty of stoic Northern Europeans in Minnesota, Dave Reiling, president and CEO of University Bank in St. Paul, counts more recent immigrants as his best customers. During a tour of the bank's accomplishments, Reiling shows visitors "before" and "after" images of neighborhood buildings the bank has financed. Hmong entrepreneurs who came to University Bank for financing to seed their businesses now own many local retail shops such as Ha Tien Oriental Market and Hmong Arts, Books & Crafts.

Reiling and University Bank represent the economic vitality community banks generate across the country. They point to the substantial investments community banks make-both in time, deposits and money-to build small businesses and local economies together. Yet their efforts reflect the needs of their individual communities.

"I strive for the double bottom line," Reiling says. "I believe you can grow a healthy community bank and help a community socially at the same time."

That's something his predecessors may not have taken to heart. When Reiling and his father, William, bought the bank in 1995, it had just received its second straight "Needs to Improve" Community Reinvestment Act rating. A mere 14 percent of University Bank's loans were made in the low-income neighborhoods surrounding the bank.

After 18 months of new ownership, 60 percent of the bank's loans went to area businesses and individuals. Today that number has jumped to 73 percent and earned University Bank an "Outstanding" CRA rating from regulators.

That high percentage of loans within the bank's low-income service area helped it secure funds from the Community Development Financial Institutions Fund, a U.S. Treasury program. Congress created the CDFI Fund in 1994 to "expand the availability of credit, investment capital, and financial services in distressed urban and rural communities." Fewer than 60 banks nationwide have won CDFI certification.

In January 2002, University Bank received $750,000 from the CDFI Fund and an additional $750,000 in matching funds. That infusion of capital will allow the bank to grow even more, Reiling says.

Making more neighborhood loans wasn't the only change Reiling instituted at the bank. He also changed the name, added a bright sunshine logo that matches the Minneapolis banks owned by his father (the banks share some services), recruited a diverse group of board members that are active in the community, and purchased a check cashing store. Reiling slashed check-cashing fees in half and brought the service into the bank's office, causing change in the process. Other area check cashing businesses lowered their fees to match University Bank. In the end, the bank converted more than 100 people to DDA accounts.

Change of Heart

At first glance, Reiling seems an unlikely candidate to lead a bank in a low-income neighborhood. During a seven-year stint with First Interstate and Citicorp in Los Angeles, Reiling was more concerned with the wealthy than business owners struggling to make ends meet. Reiling's clients were millionaires who didn't quite have enough yet to qualify for private banking, but wanted more than teller lines could offer.

Since returning home to Minnesota, Reiling has caught community bank fever. "I get to run my own shop and I feel good about doing it," he says. "We're financially sound and we're making an impact."

There are other ways to foster economic development in a community. …

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

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.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

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

Money Multipliers
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.
    Buy instant access 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.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.