Almighty Debt, the most recent CNN documentary in the network’s series on African-Americans, related how severely debt imposes complex, real-life financial challenges, whether the issue is foreclosure, long-term unemployment or financing higher education. Central to the documentary was Rev. DeForest Soaries Jr. of First Baptist Church of Lincoln Gardens in Somerset, N.J., whose congregation members were also featured.
The stories of debt were heart-wrenchingly true but they also connected the pivotal role and considerable influence that African-American clergy have when it comes to matters of debt. Rev. Soaries is not alone. In other states and locales, there are more pastors, congregations and alliances that have made a serious commitment to both economic justice and financial literacy.
In fact, these clergy view economic empowerment and justice as an essential part of their clerical duties. Theirs is not a choice between serving the church or its community but, rather, the divine power that has dominion over both.
For example, Bishop T. D. Jakes, an author and senior pastor of the Dallas-based Potter’s House, has a nonprofit organization, the Metroplex Economic Development Corporation, that teaches the basics of credit and debt management. This wing of Bishop Jakes’ numerous endeavors also meets with banks and negotiates better terms for his flock and community.
In a recent guest opinion for CNN, Bishop Jakes wrote, “What we must realize is that it is not wrong for people to want a new home or car. But it was wrong for financial institutions to prey on those desires with unbalanced financial solutions.”
That financial imbalance experienced by many African Americans is also the focus of the Collective Banking Group Inc. Formed in 1993, the CBG recently shared the impetus for its formation and subsequent actions.
Following the call to serve as a pastor in a Maryland church in 1988, the Rev. Jonathan Weaver led his church out of debt with early retirement of a $200,000 mortgage incurred before his service. As the church grew and sought a $50,000 loan for expansion, the same lender advised Rev. Weaver that the bank would “consider” the smaller loan only if a number of conditions were met: collateralize the mortgage; secure an appraisal; and three church trustees who would personally guarantee the loan. The fact that the church held accounts with this bank for 25 years was of no value or relevance.
Rev. Weaver sent the president of the bank a letter saying he would soon advise his 750-member congregation of the bank’s decision and ask them to consider whether they should retain their own individual accounts with the lender. Following its receipt, the same bank official who iterated the numerous conditions promptly contacted Rev. Weaver and assured him that the $50,000 loan was approved without the additional conditions.
More importantly, Rev. Weaver soon discovered that other pastors and church members in Prince Georges County, Md., and the metropolitan Washington, D.C., area had similar experiences with lenders. Long-term faithful and regular deposits seemed never enough to secure financing from area lenders.
Their collective concerns led to the founding of the CBG with 20 churches in the D.C. metro area. Today, Rev. Weaver serves as the CBG’s national president and the faithful alliance has grown to 150 congregations representing 175,000 congregants through chapters in Austin, Texas, Baltimore, Charlotte, N.C., and Miami.
It is relevant to note that research by the Center for Responsible Lending has shown consumer lending concerns in many of these same locales, particularly as they relate to African-American foreclosures. The CRL determined Florida has seen more African-American home foreclosures than any other state in the country.
CBG’s Miami chapter is now strengthening and revising its 10-point agreement with its major bank partners and is in discussions with another major lender. The Miami CBG chapter is also excited about recent accomplishments in the Sunshine State.
According to the Rev. Dr. Joaquin Willis, who serves dual roles as vice-president of the national CBG and president of CBG-Miami-Dade & Vicinity, “CBG of Miami’s front-end solution to the housing crisis was provided through a partnership with Neighborhood Housing Services, a subsidiary of Neighborhood Works. This partnership led to homebuyer education and loan packaging programs that successfully placed hundreds of families in homes during these crisis years – without any problems at all. In 2010, we began to implement a back-end solution with the National Association of Consumer Activists, who contacted us.”
“CBG Miami developed a series of preliminary workshops held in February and March of this year to prepare people for pre-packaging home loan modifications before NACA visited Florida,” said Willis. “Our member churches served as host sites. When we moved to multiple larger sites at Florida convention centers later during the spring, approximately 40,000 troubled homeowners received loan modifications in a three-day period. I am proud that CBG member-churches served the community and we opened our church doors to all troubled homeowners, regardless of whether they were a church member or not.”
But, with a recessionary economy that imposes multiple challenges, the CBG is looking at what yet remains to be accomplished.
“We’re encouraged by the success we see,” said Willis. “But we are anxious to expand the number of people served and drill deeper into the problem of debt. In Miami, we are looking to also do collective buying and collective building, in addition to continuing our efforts on collective banking.”
CBG’s stated vision is “to stimulate and actualize economic empowerment in the African-American community and other underserved communities; and to leave a legacy for future generations.”
In a phone interview, Weaver said, “We’ve got to learn to manage very, very carefully the money that has been entrusted to our care. Just as we should attempt to take greater care of our physical and emotional well-being, we need to take care of our financial well-being – and be intentional about it. The days of treating money frivolously need to be long gone.”
Charlene Crowell is the Center for Responsible Lending’s communications manager for state policy and outreach. She may be reached at Charlene.email@example.com
Photo: The Writer: Charlene Crowell