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Between the California Civil Rights Initiative, Gov. Pete Wilson and prevalent anti-affirmative action sentiment throughout the state, African Americans in California have had little in recent months to get excited about. But a new 10-year partnership with Merrill Lynch, the Orange County Alliance for Community and Economic Development, and the Greenlining Institute might provide a long-needed spark in some economically depressed areas throughout the state.
The initial phase of the $77 million pilot program includes small businesses lending and low-income housing initiatives aimed at creating economic opportunities in Southern California’s minority communities. “We’re very pleased to enter into this partnership, which has been assigned to tap the enormous entrepreneurial energy and economic potential of Southern California’s culturally diverse communities,” says Merrill Lynch Chairman Daniel P. Tulley.
One of the company’s goals is to significantly expand its relationships with business owners and individual investors in Southern California, primarily in underserved communities in Los Angeles and Orange counties. Also planned is a $40 million mortgage lending program aimed at making home ownership possible for low-income families. It will offer zero-down- payment loans and opportunities for 100% financing. Other features of the program include a $20.2 million small business lending and counseling program that will include a business advisory service to 250 established small businesses in targeted communities.
The company has also allocated $525,000 to effectively market its services through foreign language seminars and financial planning forums focused on minority markets. “The opportunity for Merrill Lynch to profitably serve Southern California’s culturally diverse markets is tremendous. These are economically vibrant communities with great growth potential,” says Peter P. Case, a Merrill Lynch senior executive.
Altruism aside, the venture also has an economic upside for the company. By targeting a community often ignored by other financial institutions, Merrill Lynch can significantly expand its market reach in the California area.
John Gamboa, executive director of the Greenlining Institute, a San Francisco-based multi-ethnic advocacy group that oversees the project, says the venture has potential benefits for all parties involved. By reaching out to these communities, Merrill Lynch can potentially open up opportunities for thousands in Southern California, he says. “And they’ve done so in a way consistent with Greenlining’s philosophy–that all corporations can find profitable ways to do business in historically underserved communities.”
In addition, the company has pledged to invest with the Enterprise Foundation, one of the nation’s leading nonprofit housing and community- development organizations, to create more than 1,000 housing units through four projects located in Los Angeles, Long Beach and Orange County.
The 12-member Merrill Lynch/Community Partnership Council is working to implement the pilot program, which will be fully operational later this year. It will also include a number of education and training programs aimed at culturally diverse communities.
For more information about the Merrill Lynch Alliance, call 888-762- 2565.
PILOT COMMUNITY INVESTMENT PROGRAM
The three-year program,started earlier this year, is expected to be fully operational by mid-year. Its major components will include:
MORTGAGE LENDINGMortgage lending to low-income,PROGRAMhistorically underserved home, buyers, offering the oppurtunity for 100% financing.
SMALL BUSINESS Lending to qualified small