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FORM 1667 OFFICE LETTER TRUST COMPANY OF GEORGIA TO A. H. Sterne FROM C. Linden Longino, Jr.

SUBJECT: Bank Loans to Minority Businesses I have a collection of many news articles and other reports, as well as my own thoughts, on the general subject of business formation and development in urban "underprivilegedghetto-black-minority" areas. Connnon threads bind all of these together: 1. A city cannot endure with a central core of business and individual poverty. 2. Strengthening the underprivileged toward solving the overall number members comprise 12% of the U. S. business, according to government 3. This uplifting can be done by direct government "intervention" or by the more fortunate members of the "privileged" business community; the latter being a better way for innumerable reasons, but a combined effort being workable and not necessarily undesirable. 4. Many government programs exist and ~ any private organizations have been formed to cope with these problems, but there is much duplication of effort and a general lack of intercommunication and coordination. 5. Banks can play a key role because of the general scarcity of money available to the ghetto businessman f or s t arting or upgrading his business. (Only 150 of this country's 14,000 connnercial banks engage in specific loan programs of this nature.) 6. A bank can follow three basic paths: A) B) C) 7. business connnunity would go a long way one problem of the city. (Minority group population but they own only 3% of U. s. figures.) Establish its own high r i s k loan pl an (C&S has done this). Parti cip ate wi t h t he SBA in " Proj ect Own", a liberali zed lo an guar antee program. This plan is endorsed by the ABA. (Trust Company , First National, National Bank o f Georg ia and maybe Fulton National Bank do this.) Banks within a city can organi ze a "pool" of funds and talent , off e r ing lo ans a s well as management assist ance. (This h a s been informa l ly d iscussed , but no such move i s under way in At l a n ta. Banks in s ome other c i t i e s h ave tak e n s u ch action . ) Conculsion: Each bank must make its own decision as to the ex tent of its involvement, i f any, in this area of community service . A f ormal "pool" o f b anks is no t neces sar y if e ach b ank will as s ume its r espon s i bilities and t ake an active ro l e in this area o f lend ing. A central " clearing house" would make the job easier for a ll interested parties, pub l ic and private. Independent services of banks, attorneys, accountants, consu l tants and various national, state, and local government bodies cou l d be efficiently channeled toward the connnon ob j ective . We h ave s uggested t h at the Atl anta Chamber of Connnerce mi ght assume the role of coord i nator if such a "clearing h ouse" is established . CLL,JR:cb~~ ~ 1- 15-69 H'tf �