Ka Wai Ola - Office of Hawaiian Affairs, Volume 12, Number 1, 1 January 1995 — NATIVE PEOPLES AND THREE-PIECE SUITS: HOW COMMUNITIES AND FINANCIAL INSTITUTIONS CAN WORK TOGETHER [ARTICLE+ILLUSTRATION]

NATIVE PEOPLES AND THREE-PIECE SUITS: HOW COMMUNITIES AND FINANCIAL INSTITUTIONS CAN WORK TOGETHER

Stories by Ellen Blomquist The Office of Hawaiian Affairs hosted its third annual conference on eom-munity-based eeonomie development Nov. 17 and 18 at the Hyatt Regency. The conference, "The Road Ahead in Community Reinvestment," centered on the Community Reinvestment Act (CRA), fair lending and their effect on community-based eeonomie development (CBED). Cosponsors of the conference were the state Department of Business, Eeonomie Development and Tourism, the Federal Reserve Bank of San Francisco and the Federal Home Loan Bank of Seattle. CRA ean be summed up as the federal government instructing financial institutions to reinvest in communities where they do business. Although the law has been in plaee since 1977, in recent years, federal regulators have been breathing down bankers' starched collars. As a consequence, finan-

eial institutions are considerably more anxious to work with the communities. They have also been encouraged by the success stories they've seen, ffom the Lakota Fund at the Pine Ridge Indian Reservation to Coastal Enterprises in Maine. These are community-based organizations whieh have gotten increasingly more adept at attracting and distributing funds for starting or expanding small businesses, creating affordable housing, and providing technical assistance in low ineome communities. Several points were hammered at in both plenary sessions and working groups. First, the financial industry has been out of touch with the eommunities who most need credit access. As several speakers pointed out, banks like to lend money to people who already have it. The system rewards accumulation by individuals, not sharing within eommunities, and the system itself traps the institutions that work within it. Investment in community loan

funds or community-based organizations or people in poorer eommunities doesn't pay because it's perceived as high risk, or there's no credit history, or the cost of making small loans is too high. Native people are in an especially precarious position because they don't control, and thus can't leverage, their own resources. As Stephen Morse, OHA's housing officer, pointed out, the conferenee was held in a hotel built on Hawaiian trust lands, close to the site of Queen Lili'uokalani's summer home. He invited participants

to take in the view of Waikīkī and consider what happens when development is market driven and doesn't consider community values and input. "Imagine what it would look like," he said, "if CBED had been around then." Second, it is not enough for native communities to work with the system. They have to actively change it, by legislation and by being in a position to control it. In other words, they have to infiltrate. For example, Rebecca Adamson, a Cherokee and president of First Nations Development Institute, now sits on the board of the Calvert Social Investment Fund and was able to help direct close to $6 million of their portfolio to community loan funds — with the unanimous endorsement of the shareholders if not the Fund's attomeys, she added. Miehael Sherraden, director of the Center for Social Development at Washington University one lined it. "Be stakeholders and stockholders." Words of comfort to financial institutions were that

universal participation in the eeonomie system - what Sherraden called "democratic capitalism" - is the best long-term eeonomie strategy. "Capitalism works best," Sherraden said, "when everyone has a little capital." Third, and perhaps most important, communities should not wait until "something happens." Adamson says, "Self-determina-tion is not legislation. It is you. It's nothing you give or are given. It's what you own." Organize now. Get training programs in plaee now. Do what you ean with what you have. Pursue every possible avenue to get, keep and distribute capital in accordance with community needs and values. Over and over, this message was sent and received enthusiastically by conference participants. The stories of other people's experience gathered ffom the eonference will hopefully illustrate how these different points worked in their communities. More important is how they will inspire action in ours.