Banking on the Future: The Role of Banking and Financial Services in the Development of Minnesota’s Immigrant and Minority

Communities by Francisco J. Gonzalez

Completed as Optional Paper for the Course Banking Law Prof. L. Bakken Fall 1999 Hamline University School of Law

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Table of Contents

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 I. The Economic and Social Conditions of Immigrants and Minorities in Minnesota . . ……………………………………………….6 A. Immigrants and Minorities at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . .6 B. Economic and Social Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 II. The Impact of Regulatory Oversight on Banking Industry Practices . . . . . . . . . .11 A. Federal and State Anti-discrimination Statutes . . . . . . . . . . . . . . . . . . . . 11 B. Development and Investment Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . 14 III. Future Trends in Economic Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 A. Immigrant Labor and Minority Businesses . . . . . . . . . . . . . . . . . . . . . . . 18

IV. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22

Executive Summary

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I.

The Economic and Social Conditions of Immigrants and Minorities in

Minnesota A. Immigrants and Minorities at a Glance Minnesota has seen a steady increase in the number of immigrants settling in the state, with around 8,977 arriving every year from all parts of the world. Minority communities (African-American, Hispanic, Asian-Pacific Islander and Native American) are also growing in numbers. The total combined number of immigrants and minorities is around 450,000. B. Economic and Social Conditions These communities are, compared to the majority European-American population, economically disadvantaged. They are mostly confined to low-skills, low-wages jobs; have significantly lower rates of home and business ownership; and face great difficulties (due to bias, lack of information, poor credit record or lack of collateral) when trying to secure investment capital. II. The Impact of Regulatory Oversight on Banking Industry Practices A. Federal and State Anti-discrimination Statutes The federal government has several statutes that prohibit discrimination in lending. Another statute, the CRA (Community Reinvestment Act) required banks to provide services to minority communities. Minnesota also has adopted detailed anti-discrimination statutes. However, and despite some successes, enforcement of these legislative enactments is not very effective. In addition, current deregulation and changes to federal banking legislation may have some impact on the ability of government to enforce anti-discrimination measures. B. Development and Investment Initiatives

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Most minority and immigrant communities rely on alternative ways to obtain financial services and capital. Community Development Corporations (CDCs) are non-profit organizations that pursue economic development projects in local neighborhoods or for specific groups. Rotating Credit Associations are informal arrangements, based on cultural and ethnic traditions, that pool money for the benefit of the group. Both CDCs and Rotating Credit Associations, while effective, can only provide small amounts of capital, and are not viable replacements of traditional banking services. III. Future Trends in Economic Development A. Immigrant Labor and Minority Businesses

The role of immigrant and minority labor and businesses will increase in the future due to the slow growth and aging of the European-American community. The economic development of Minnesota during the next century will be tied to the level of integration, support and profitability of minority and immigrant owned businesses. IV. Conclusion Minnesota’s immigrant and minority communities represent a vast potential market and source of economic wealth. There is a need for government, civic groups and private business to coordinate efforts to fully develop these communities. Banks, as the main source of capital for investment, should expand on their efforts to provide services that address the financial requirements of immigrants and minorities..

Introduction

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The changing demographic trends of the later part of the twentieth century are challenging the basic assumptions and priorities of Minnesota’s economic, social and political structures. The aging of the native-born (and overwhelmingly EuropeanAmerican) population has coincided with increased transnational immigration into the United States and a displacement of internal migrants into Minnesota from other states, with both of these groups composed mainly of people of Hispanic, Asian and African ethnicity. In this paper I will analyze several aspects of the current relationship between the growing immigrant -minority communities and the banking industry in Minnesota. First, I will present an overview of the various immigrant and minority communities in the state, with special emphasis on their socio-economic profile. Second, I will describe the regulatory framework applicable to the banking sector in order to protect these communities from discrimination and facilitate access to the capital and other services. In addition, the current sources of investment funds and loans into these communities will be presented. Lastly, based on the premise that current demographic and economic trends will continue into the future, I will present an assessment of the interrelated relationships between immigrant-minority economic strength, government deregulation and banking industry consolidation in the first few decades of the next century. The thesis of this paper is that the economic development of Minnesota in the future depends on the successful incorporation into the mainstream economy of our growing immigrant and minority communities. The banking industry can be the driving force behind this initiative, by reaching to these communities and providing access to capital, and other services. Moreover, banks and other financial institutions should realize that the needs and concerns of these communities may give rise to increased government

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regulation. In addition, immigrants and minority communities may also decide to continue to rely on alternative financial systems, or even establish their own financial institutions, creating market niches that would displace established banks from a growing sector of the market.

I.

The Economic and Social Conditions of Immigrants and Minorities in

Minnesota A. Immigrants and Minorities at a Glance For centuries, Minnesota has attracted different groups of migrant populations. Beginning with the Ojibwa and Dakota Native American tribes, who were fleeing intertribal conflict and European expansionism in the 17th and 18th centuries; followed by the Scandinavian and Central European settlers that flocked to the territory during the 19th century, to immigrants from all parts of the globe today; the land has offered refuge and opportunity to all. In view of the history of this state (and indeed, of the United States) it is certainly not unusual to see a large and growing immigrant community in Minnesota. The number of international immigrants settling in the state in 1996, for example, was 8,977.1 The great majority of these immigrants came from Asia, followed by Africans and Eastern Europeans (including refugees from the Balkans and the former Soviet Union).2 Immigration from Mexico, the Caribbean and Central America is difficult to quantify, as many immigrants from these countries are undocumented .3

State Demographic Center, Minnesota Planning Trends in International Migration to Minnesota Continue, PopBytes, , vol. 98-14 (July 1998). 2 Trends in International Migration to Minnesota Continue, supra note 1. 3 Id.
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The most recent estimates of immigrants living in Minnesota provides the following picture4: Ethnic Group Somalis Other East Africans West Africans Hmong Other Southeast Asians Hispanics Russians Yugoslavians Tibetans Estimate 6,000 2,000 2,500 60,000 20,000 125,000 6,000 1,600 500 Range +/- 1,500 +/- 500 +/- 500 +/- 3,000 +/- 3,000 +/- 15,000 +/- 1,000 +/- 300 +/- 100

Besides international immigrants, Minnesota is also home to a large and diverse array of US-born ethnic minority communities. The African-American community is numerically the largest group, with a currently estimated population of 174,000.5 Next in population size is the Hispanic community, with an estimated number of 125,000.6 The numbers of Hispanics in Minnesota are however somewhat unreliable due to the pervasive statistical practice of including all persons of Hispanic heritage, whether recent international immigrants or 10th generation US citizens, under the same general category. In addition, unknown numbers of undocumented aliens are seldom, if ever, accounted for in the gathering of these statistics. The fastest growing minority community in Minnesota is that of persons of Asian-Pacific Islander heritage. The most recent estimate of their numbers is 113,000 but this population is expected to grow up to 219,000 by the year 2025.7 The smallest ethnic minority population in the state is the Native American community. There are around 50,000 enrolled tribal members living in Minnesota, with
State Demographic Center, Minnesota Planning, Estimates of Immigrant Populations in Minnesota, PopBytes, vol. 99-16 (May 1999). 5 State Demographic Center, Minnesota Planning, Faces of the Future: Minnesota Population Projection 1995-2025 11 (May 1998). 6 Estimates of Immigrant Populations in Minnesota, supra note 4. 7 Council on Asian-Pacific Minnesotans, Asian-Pacific Migration to the State of Minnesota (visited Nov. 29, 1999) <http://www.state.mn.us/ebranch/capm/activities/pol.htm>
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those residing on the state’s s twelve reservations enjoying a special relationship with the state and the federal governments due to their status as sovereign tribes.8 B. Economic and Social Conditions The gap in economic prosperity between European-Americans and minorities in Minnesota is large and, in most cases, getting larger. Minorities on average have lower incomes and are more likely to be living in poverty than members of the majority community, this in part due to the fact that minorities are more likely than EuropeanAmericans to be in service and semiskilled manufacturing jobs or unemployed9. They also are less likely to be employed full time and, in most cases, lag behind members of the majority community in educational achievement10. On the other hand, the current booming economy provide even unskilled minorities and immigrants with opportunities to work. The importance of this labor force is readily appreciated when Minnesota’s employment statistics are examined. The Department of Economic Security estimates that out of the 2,736,889 Minnesotans in the state’s labor pool, 2,667,899 were employed as of September 1999.11 With so few people unemployed or looking for work, the state is a magnet for immigrants, including an estimated 30,000 undocumented

Minnesota Indians Affairs Council, Demographics (visited Nov. 29, 1999) <http://www.indians.state.mn.us/stats.htm> 9 Minnesota Planning, State of Diversity 6 (Nov 1993) 10 Id. 11 Kimberly Hayes Taylor, Relying on Immigrants, Star Trib. (Minneapolis), November 15, 1999, at D8.
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aliens12 Meat packing and other food processing companies in such towns as Worthington, Madelia, Marshall and Pelican Rapids increasingly are solving their with labor shortage problems, and also bowing to pressures to keep wages low, by recruiting Hispanic and Southeast Asian workers13. Immigrants and minorities are also contributing to the economic well-being of Minnesota through the creation of businesses. While most minority-owned businesses are comparatively small, these do play an important role in revitalizing neighborhoods. The jobs, role models and multiplier effect of expanded purchasing within the community created by a business can stimulate other economic development.14 Another indicator of the economic and social situation of immigrants and ethnic minorities in Minnesota is the rate of home ownership among these communities. Home ownership is a necessary tool for the creation of wealth, since homes are often used as collateral for loans, including those for starting small businesses. Moreover, home ownership is instrumental in maintaining the stability of neighborhoods, since those who own property have a greater stake

Hayes Taylor, supra note 11. The shortage of workers is so great that without immigrant and minority workers, most of the Twin Cities downtown restaurants and even the Mall of America would be unable to operate. See id. 13 State of Diversity, supra note 9 at 7. 14 Id. at 12. The largest minority-owned businesses in Minnesota are the tribal casinos, in particular those owned by the Shakopee Mdewakaton, Lower Sioux and the Prairie Lake tribes. Casinos employ more than 3,000 Indians, and generate over $300 millions in annual revenues. This influx of jobs and wealth has greatly stimulated the economy not only of the reservations, but of the surrounding small rural communities. See id.
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and interest in a community’s future than temporary residents or renters. Home-ownership rates for minorities are significantly lower than rates for European-Americans due to the decreasing availability of low and moderate priced housing, and also to the disproportionate concentration of low income wage earners among minority and immigrant communities.15 Recent arrivals into Minnesota are often unfamiliar with the area and available programs, and unaccustomed to home ownership . The availability of affordable housing is another problem that impacts these communities. In some areas of Minnesota, and in the Twin Cities metropolitan area in particular, affordable housing is not keeping up with job growth. Newly constructed homes are generally beyond the price range of low-income people. According to the Metropolitan Council’s 1991 Home Prices Report, “only 0.09 percent of single-family homes and 0.08 percent of townhouses built in 1991 were priced $69,999 or under. On the other hand, 20.8 percent of sales of existing single-family homes were in this price range. Development of low-income homes does not appear to be keeping up with demand.”16 Besides the problems of lack of affordable housing and low wages, minority and immigrant first-time home buyers and owners
15 16

State of Diversity, supra note 9 at 15. Id. 10

need access to information and other resources to help them achieve their goals. They need financial advice, assistance with the actual the buying process, even interpreters and translators fluent in their native languages and English.17 The positive impact of the growing role of minorities and immigrants in the economic development of Minnesota is not being fully realized due to several reasons: general low wages earned by the members of these communities, lack of technical skills and/or highereducation training, lack of affordable housing, stunted level of business ownership and scarcity of investment capital.

II. The Impact of Regulatory Oversight on Banking Industry Practices A. Federal and State Anti-discrimination Statutes The historical relationship between banks and minority communities in Minnesota have reflected the general attitude in the rest of the United States. For decades, minorities and recent immigrants were routinely denied access to financial and banking services (from the opportunity to open a savings account to that of applying for commercial loans).18 However, beginning in the 1960’s, Congress began to enact legislation designed to eliminate discriminatory practices (de jure or
17 18

Id. at 16. Group Charges Lenders Still Unfair to Minorities, Star Trib., (Minneapolis), Oct. 2, 1992, at D1. 11

otherwise) in a wide range of economic, social, political and government entities.19 Legislation addressing issues of discrimination in the banking industry was first enacted in 1968, with the Fair Housing Act which forbids denial of a loan because of race or national origin.20 This was expanded by the Equal Credit Opportunity Act also prohibiting discrimination on the basis or race or national origin.21 In 1977 Congress also enacted the Community Reinvestment Act (CRA) which imposed broader requirements on lending institutions to provide credit to undeserved communities, such as low income neighborhoods.22 The CRA’s effectiveness in addressing the needs of mostly minority and immigrant communities has been assessed as: “proven successful in stimulating bank activity targeted at lowto moderate-income housing. In a survey of 140 banks, thrifts and holding companies conducted by the Consumer Banker’s Association, 91.4% of respondents had programs targeting purchase-money lending for low- to moderate-income housing. In addition, 94.5% of these programs employed one or more flexible underwriting criteria to make financing more available and affordable, and many provided for automatic review of rejected applicants and/or stepped up marketing to minorities and low- to moderate-income communities.”23 The CRA’s relative success is attributed to the fact that the thrust if the Act is “directed at discriminatory allocation of credit among

The most important of these Congressional enactments was the Civil Rights Act of 1964 (codified at 42 U.S.C. §§ 200a-h (1994). 20 42 U.S.C. §§ 3601-31 (1999). 21 15 U.S.C. § 169 (a). 22 12 U.S.C.A. §§ 2901-2907. 23 Vincent DiLorenzo, Complexity and Legislative Signatures: Lending Discrimination Laws as a Test Case, 12 J.L. & Pol. 637, 657 (1997).
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neighborhoods, not as decisions on individual applicants.”24 Federal regulators enforce the CRA by assigning each bank a CRA rating or either “outstanding”, “satisfactory”, “needs to improve”, or “substantial compliance”.25 A bank that does not fulfills its obligation to respond to the “credit needs of its entire community” would be faced with a low CRA rating.26 These ratings would then be taken into account if and when a bank files a request for permission to acquire, merge, create branches or relocate facilities. However, and despite some improvements on the banking industry’s patterns of lending towards minorities, bias and discrimination still persists. The limited success that federal regulators enjoy in prosecuting violations to anti-discrimination acts is due in part to the difficulty of proving that an adverse lending decision against an applicant was the result of bias and not based on objective financial practices. The enforcement of this Act, can give rise to situations such as this one, when lack or coordination was evident after “regulators had given Decatur Federal Savings & Loan a “passing” CRA grade at the same time the Justice Department was scouring its records for evidence of discrimination. The Justice Department eventually discovered evidence that resulted in the first-ever (1992) settlement of violations to the Fair Housing Act by a financial institution. Similarly, in 1994, a jury awarded $3.2 million in damages against First Gibraltar bank based on violations to the fair lending laws. This is the first such award of damages against a financial institution. First Gibraltar
Id. at 655. 12 U.S.C. § 2906(b)(2) (1999). 26 12 U.S.C. § 2903(a)(1) (1999).
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had been given an outstanding CRA rating by its regulator. To the bank regulator there were legitimate business reasons for denial of the loan in question which the bank could point to in the loan file, and it stated “it is not the role of the regulator to substitute its underwriting judgment for the institutions” (emphasis added). The statutory prohibitions against loan discrimination have been in place for decades, but the ability of either government regulators or private plaintiffs to enforce them has been severely hampered.”27 In addition to the federal legislation, Minnesota has also enacted general prohibitions against discrimination in areas of lending and housing. The state has a well-deserved reputation for adopting progressive legislation designed to eliminate bias, and by extending protection not only to ethnic or racial minorities, but also to discrete and unpopular groups such as gays and lesbians. Minnesota has adopted comprehensive legislation that protects against discrimination in housing-related lending.28 The statutory language also addresses the same issues tackled under the federal Fair Housing Act by prohibiting discrimination against the identified protected classes regarding the sale, lease or renting of real property.29
DiLorenzo, supra note 23, at 653. Minn. Stat. § 363.03(3) (1999) states that “it is an unfair discriminatory practice for a person, bank, financial institution or lender to whom application is made for financial assistance for the purchase, lease, acquisition, construction, rehabilitation, repair or maintenance of any real property or any agent or employee thereof: (a) to discriminate against any person or group of persons because of race, color, creed, religion, national origin, sex, marital status, status with regard to public assistance, disability, sexual orientation, or familial status of the person or group of persons or of the prospective occupants or tenants of the real property in the granting, withholding, extending, modifying or renewing, or in the rates, terms, conditions, or privileges of the financial assistance or in the extension of services in connection therewith.” Id.
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Minn. Stat. § 363.03(2) (1999) sates that “it is an unfair discriminatory practice for a real estate broker, real estate salesperson, or employee, or agent thereof:
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However, despite the presence of specific state and federal legislation outlawing discrimination, and also despite some encouraging trends in the banking industry regarding increased involvement in meeting their financial needs, there is still a shortfall of capital which in turn hampers further economic development in the immigrant and minority communities. In addition, present trends of deregulation (such as the recently enacted Financial Services Modernization Act of 1999), bank mergers and restructuring, add some uncertainty to the economic future of these communities.

B. Development and Investment Initiatives The immigrant and minority communities, faced with a real inability to secure lending and other financial services from the banking industry, have nevertheless managed to have access to a limited amount of capital, obtained outside the realm of the traditional banking institutions. The two main sources of this capital are the Community Development Corporations and informal Rotating Credit Associations.

(a) to refuse to sell, rent, or lease or to offer for sale, rental, or lease any real property to any person or group of persons or to negotiate for the sale, rental, or lease of any real property to any person or group of persons because of race, color, creed, religion, national origin, sex, marital status, status with regard to public assistance, disability, sexual orientation, or familial status or represent that real property is not available for inspection, sale, rental, or lease when in fact it is so available, or otherwise deny or withhold any real property; b) to discriminate against any person because of race, color, creed, religion, national origin, sex, marital status, status with regard to public assistance, disability, sexual orientation, or familial status in the terms, conditions or privileges of the sale, rental or lease of real property or in the furnishing of facilities or services in connection therewith.” Id. 15

Community Development Corporations (CDC’s) are nonprofit volunteer neighborhood associations created to foster economic development initiatives, that have increasingly taken over the role of financial institutions by providing funds to local entrepreneurs, home buyers, and business owners.30 The role of these organizations has evolved so now “[a] significant number of modern CDCs include economic development as part of their mission. According to the 1994 NCCED [National Congress for Community Economic Development, a CDCs clearinghouse for resources and information] census, 23% of CDCs reported completing industrial or commercial developments. In addition, 18% indicated that they were involved in business lending, equity investing, or owning and operating a business enterprise.”31 Funding for CDCs is obtained from a number of sources, among them grants from the Urban and Rural Economic Development Program of the U.S. Department of Health and Human Services’ Office of Community Services. In addition, many projects utilize grants and loans from the Economic Development Administration, the Small Business Administration, and the U.S. Department of Housing and Urban Development. In addition, states, municipalities and cities also contribute grants, below-market loans and cost-free real estate for development. Foundations, private corporations and individual donations also provide capital for different projects.32 In Minnesota there are a number of CDCs that focus on inner-city neighborhoods or that provide services to specific immigrant and minority groups. Several of the largest

See Michael H. Schill, Assessing the Role of Community Development Corporations in Inner City Economic Development, 22 N.Y.C. Rev. L. & Soc. Change 753 (1997). 31 Id. at 767. 32 Id. at 767-768.
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CDCs and other service organizations have formed the Community Solutions Fund, a joint partnership to solicit contributions, apply for grants and coordinate activities for their projects.33 The Community Solutions Fund “represents 39 of the area’s leading community self-help and activist organizations, serving as a central funder and resource developer for the Twin Cities social change community” and its philosophy is “that [1] those communities affected by a problem are best equipped to develop lasting solutions to address their problems, [2] making a lasting difference requires examining the underlying causes of problems and community involvement in designing social change solutions.”34 Some of the CDCs and other community organizations represented by the Community Solutions Fund are the Association for the Advancement of Hmong Women in Minnesota (assist Hmong families in finding and keeping housing); Elliot Park Neighborhood, Inc. (supports affordable housing, intercultural understanding and neighborhood and economic revitalization); Lexington-Hamline Community Council (owns and provides support for a housing coop; makes housing improvement loans, advice on home loans, grants and improvements; and organizes residents of Skyline Towers in St. Paul); and Little Earth Residents Association (provides services to 1,000 low-income housing residents of Little Earth of United Tribes).35 While CDCs have proven to be effective in creating businesses, facilitate homeownership and provide other financial services, they simply lack the resources to fully replace the services provided by traditional banks. The other non-mainstream source of capital for minority and immigrant communities is the financial arrangement known as Rotating Credit Associations, an

Community Solutions Fund, About CSF (visited Dec. 1, 1999) <http://www.solutionsfund.org> Id. 35 Id.
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informal arrangement in which a group of individuals pool their funds on a regular basis and then rotate the pool around the group until all members have received it.36 This type of financial association exists in almost all immigrant and minority populations under a variety of names: the “kye” in the Korean community, the “ekub” in the Ethiopian community, the “esusu” in the West Indian-Caribbean community, the “tanamoshi” in the Japanese community, the “hui” in the Chinese and Vietnamese communities, the “thong thing” in the Cambodian community, and the “cundina” in the Mexican community.37 The rise of a mercantile class among ethnic communities depends in large measure on the availability of these arrangements, specially among recent immigrants with no credit history and who can only resort to the community credit market to finance their businesses.38 The rotating credit systems operate completely out of the realm of the law and the practices of mainstream society, and depends exclusively on the trust that the members have in each other to carry their commitments to the rest of the group. There are no written contracts or loan agreements, and the associations function strictly on an unwritten honor code. Money deposited with the association is not guaranteed by any insurance, nor are collateral or a good credit history required in order to participate.39 The rotating credit associations are an important tool for economic development, not only because they provide vital capital for business creation and other forms of economic development, but also because they serve to preserve and strengthen ties of kinship, loyalty and belonging among the members of a minority or immigrant community. However, by their very nature (relatively small amounts of capital involved, participation
Lan Cao, Looking at Communities and Markets, 74 Notre Dame L. Rev. 841, 873 (1999). Id. at 874. 38 Id. at 875. 39 Id. at 882.
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limited to close friends or relatives), rotating credit associations are not designed to finance large economic initiatives or business enterprises.

III.

Future Trends in Economic Development A. Immigrant Labor and Minority Businesses The importance that immigrant and minority workers have in the current labor

market does not represent just a temporary trend brought about by an unusually strong state economy. Instead, and regardless of any future economic downturn in Minnesota or across the nation, the role of these communities in the state’s economy can only increase in the future. This is the result of irreversible demographic trends: slow population growth and the aging of the workforce.40 In addition, there are now many examples of how the immigrant and minority communities are creating businesses and becoming an increasingly vital part of the state’s economic landscape. Signs of this growth are the recent openings of two large shopping centers in Minneapolis, the Mercado Central and the International Bazaar, both created by minority entrepreneurs with the support of CDCs and various other assistance programs and grants. The Mercado Central, located on the corner of Lake and Bloomington Streets, opened on July 31st, 1999.41 On opening day it had forty-seven shops and restaurants, all owned by Hispanics, most of them first-time business owners.42

State Demographic Center, Minnesota Planning, Minnesota Labor Shortages are Likely to Continue, PopBytes, vol. 99-17 (May 1999). This study concludes that “in the future, the labor force cannot grow as much from increasing participation rates, because most working-age people are already working. Immigrants from other countries could ease the labor crunch. [however] employers…may decide not to locate or expand in Minnesota. The latter options would have a negative effect on the state’s economic growth and tax revenues.” 41 Robin Huiras, Cooperative Mercado Central Opens Its Doors This Weekend, La Prensa de Minnesota (St. Paul) July 29, 1999, at 1. 42 Id.
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The International Bazaar, on the corner of Third Avenue and Lake Street in Minneapolis, opened for business on September 19, 1999. The Bazaar provides space for an eclectic array of craft and specialty stores, art galleries, offices and studios owned by a diverse community of immigrant (from Latin America, India and the Middle East) and minority entrepreneurs (mostly African-American and Hispanic).43 The most recent addition to this list will be the Ancient Traders Market, scheduled to open on December 15, 1999, at 1113 East Franklin in Minneapolis. This building will house Native American businesses, art galleries, offices, food and craft stores.44 Many government agencies and mainstream private corporations, increasingly including banks, are taking steps to become participants in the immigrant and minority economic marketplace. An example of this is the recent inception of the Global Diversity Initiative (GDI), a program created by the Minneapolis U.S. Export Assistance Center of the U.S, Department of Commerce in cooperation with the Minnesota Trade Office, other government agencies, and private business organizations. The purpose of the GDI “is to increase the number of minority-owned firms exporting their goods and services abroad.”45 The banking and finance services industry is also reaching out to these communities in various forms. US Bank, in an intensive push to position itself within the Hispanic community, has hired Spanish-speaking bank and loan officers, business advisors, cashiers and support staff. The bank branches where these employees are working, Robert Street in West St. Paul and Lake and 10th Street in Minneapolis, are located in the center of each city’s Hispanic neighborhoods.46 Also, many banks, credit unions, brokerage
Robin Huiras, Dreams of Small Business Owners Become a Reality, La Prensa de Minnesota (St. Paul), Sept. 23, 1999, at 1. 44 Kim Wensaut, Franklin Facelift Continues, The Circle: Native American News and Art (Minneapolis), Nov. 1999 at 3. 45 New Trade Initiative for Minority Companies, Asian American Press (St. Paul), Nov. 5, 1999, at 1. 46 Mercedes Koski, Banqueros hispanos ayudan al planeamiento económico[Hispanic Bankers Help with Economic Planning], La Prensa de Minnesota (St. Paul), Dec. 2, 1999, at 1.
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services and financial advisors are now advertising in Minnesota’s principal minorityowned community newspapers.47

IV.

Conclusion The growth in numbers, purchasing power, participation in the labor force, and

rate of business creation all clearly indicate that immigrant and minority communities in Minnesota will be a key element in the state’s future socio-economic development. However, the legacy of past neglect and bias continues to impede the full realization of these communities’ potential. The fact remains that a severe shortage of investment capital, home-ownership and commercial loans, and even basic personal financial services all represent a heavy burden on the economy of immigrant and minority communities, a burden that cannot be lifted by local economic development organizations or culturally specific methods of capital-generation. The traditional banking and financial services industry is slowly waking up to the great opportunities offered by these communities. Current trends do suggest that even in the liberalized and deregulated environment of the next century, banks will find that meeting the financial needs of immigrant and minority populations will prove increasingly profitable. In addition, banks that serve culturally and ethnically diverse communities can gain expertise and skills that are easily transferred to its operations in emerging markets abroad. In short, it is a profitable, legally-encouraged and morally required imperative that the banking industry should seize the initiative, breaking down its institutional barriers in reaching out to minorities and immigrants.

A sample of these advertisers: PaineWeber (investment advice column is regularly featured in “Asian American Press”); Liberty State Bank of St. Paul (advertisement celebrating the Hmong New Year, “Asian American Press”, Nov. 10, 1999, at 10); US Bank (full-page advertisement in “Asian Pages” (St. Paul), Nov. 15-30, 1999, at 3).
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Bibliography Statutes 15 U.S.C. § 169 (a) (1999). 12 U.S.C.A. §§ 2901-2907 (1999). 12 U.S.C. § 2903(a)(1) (1999). 12 U.S.C. § 2906(b)(2) (1999). 42 U.S.C. §§ 200a-h (1999) 42 U.S.C. §§ 3601-31 (1999). Minn. Stat. § 363.03(2) (1999) Minn. Stat. § 363.03(3) (1999) Government Publications Minnesota Planning, State of Diversity 6 (Nov 1993). State Demographic Center, Minnesota Planning, Estimates of Immigrant Populations in Minnesota, PopBytes, vol. 99-16 (May 1999). State Demographic Center, Minnesota Planning, Faces of the Future: Minnesota Population Projection 1995-2025 46 (May 1998). State Demographic Center, Minnesota Planning, Minnesota Labor Shortages are Likely to Continue, PopBytes, vol. 99-17 (May 1999). State Demographic Center, Minnesota Planning, Trends in International Migration to Minnesota, PopBytes, vol. 98-14 (July 1998)

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Law Reviews and Journals Lan Cao, Looking at Communities and Markets, 74 Notre Dame L. Rev. 841 (1999). Vincent DiLorenzo, Complexity and Legislative Signatures: Lending Discrimination Laws as a Test Case, 12 J.L. & Pol. 637 (1997). Michael H. Schill, Assessing the Role of Community Development Corporations in Inner City Economic Development, 22 N.Y.C. Rev. L. & Soc. Change 753 (1997). Newspapers Asian American Press (St. Paul), Nov. 10, 1999, at 10. Asian Pages (St. Paul), Nov. 15-30, 1999, at 3. Group Charges Lenders Still Unfair to Minorities, Star Trib., (Minneapolis), Oct. 2, 1992, at D1. Kimberly Hayes Taylor, Relying on Immigrants, Star Trib. (Minneapolis), Nov.15, 1999, at D8. Robin Huiras, Cooperative Mercado Central Opens Its Doors This Weekend, La Prensa de Minnesota (St. Paul) July 29, 1999, at 1. Robin Huiras, Dreams of Small Business Owners Become a Reality, La Prensa de Minnesota (St. Paul), Sept. 23, 1999, at 1. Mercedes Koski, Banqueros hispanos ayudan al planeamiento económico[Hispanic Bankers Help with Economic Planning], La Prensa de Minnesota (St. Paul), Dec. 2, 1999, at 1. New Trade Initiative for Minority Companies, Asian American Press (St. Paul), Nov. 5, 1999, at 1. Kim Wensaut, Franklin Facelift Continues, The Circle: Native American News and Art (Minneapolis), Nov. 1999 at 3. Internet Resources Community Solutions Fund, About CSF (visited Dec. 1, 1999) <http://www.solutionsfund.org>

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Council on Asian-Pacific Minnesotans, Asian-Pacific Migration to the State of Minnesota (visited Nov. 29, 1999) <http://www.state.mn.us/ebranch/capm/activities/pol.htm> Minnesota Indians Affairs Council, Demographics (visited Nov. 29, 1999) <http://www.indians.state.mn.us/stats.htm>

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