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LINKING LENDERS AND AUTUMN 2004 COMMUNITIES P U B L I S H E D Q U A RT E R LY BY THE COMMUNIT Y A F F A I R S D E PA RT M E N T O F BRIDGES THE FEDERAL RESERVE B A N K O F S T. L O U I S INDEX 4 5 Branching Out Speakers in Limelight Don’t Borrow Trouble 6 W W W. S T L O U I S F E D . O R G Spanning the Region 9 Women Entrepreneurs Growing in Numbers By Jean Morisseau-Kuni Community Affairs Analyst S mall business has seen big growth in the past 10 years, and small businesses owned by women have flourished, with a growth rate of 37 percent—four times the growth rate of all firms. The Small Business Association (SBA) estimates that minority women own 1.2 million businesses, which makes them the fastest growing segment of women-owned businesses. Making the decision to start and grow a business is not an easy one. Fledgling business owners learn quickly that getting the right financing, developmental help and support can make the difference between a successful venture and failure. In the Federal Reserve’s Eighth District, three women who made the leap and became business owners share their stories of becoming women entrepreneurs. Fulfilling a Sweet Destiny Susan Jones—Little Shop of Pastries Susan Jones had sentimental reasons for starting her business. “When I was 17, my grandmother retired from her wedding cake business and gave me her cake pans,” she said. “I knew at that moment I wanted to do something special with those pans.” The concept of Jones’ business, Little Shop of Pastries in Vienna, Ill., grew from that desire. Jones started her business in a small shop near the Vienna town square. “I knew I could do something with the shop,” she said. “I could see myself running a small bakery and selling wedding cakes.” Jones wrote her business plan with help from family and friends and with information she received from the Small Business Development Center (SBDC) at Murray State University in Kentucky. When Susan Jones, owner of Little Shop of Pastries in Vienna, Ill., still uses her grandmother’s cake pans to bake wedding cakes. she approached a local bank to secure a loan, she received a pleasant surprise. The loan officer was impressed with her business plan and asked her who wrote it. “I didn’t know if I should feel proud or be insulted,” she said. “I really didn’t care. I got the loan and Little Shop of Pastries was born.” Her business was a success from the start, and she soon started selling sandwiches and beverages along with her pastries. She added tables to accommodate customers who wanted a place to sit. “It was so tight in there you could hardly move,” Jones said. “I was surprised that people waited in line for a table.” The Vienna Chamber of Commerce contacted Jones about expanding her business to a bigger location and suggested she visit the SBDC at Shawnee Community College. At the SBDC, continued on Page 2 continued from Page 1 Jones took advantage of entrepreneurship classes. “Everyone at the center was so helpful and the entrepreneur classes have been very useful. The information I got from them has helped me more than once,” Jones said. The center also helped Jones obtain a microenterprise grant from the Southernmost Illinois Delta Empowerment Zone. She used it to expand to her current location. “It’s hard to say what I would change, if I could. I’ve had hard knocks, but they only make you better at what you’re doing,” Jones said. Little Shop of Pastries has grown into a bakery, restaurant and now a catering business. Her success comes from selling quality products for fair prices and giving customers what they want, she said. It’s not unusual for her to make wedding cakes from her customers’ favorite recipes. Jones said she also owes her success to her loyal staff and supportive family. Running the shop is a family affair. Jones’ mother-inlaw, Betty Jones, has worked beside her since the shop opened. Her husband and children help out by washing dishes, decorating cookies and working at events. “When we serve meals and I hear people talking about how good the food tastes or a customer comes in to buy rolls because Sunday dinner isn’t complete without my rolls or a bride is glowing because her wedding cake is perfect, I feel fantastic,” Jones said. Building Minds for the Future, Character for a Lifetime Michelle Hayden—One Step Ahead Daycare Center Michelle Hayden worked with Grace Hill Women’s Business Center and Area Resources for Community and Human Services (ARCHS) to start her business, One Step Ahead Daycare Center. Grace Hill helped Hayden develop a business plan and provided entrepreneurship training. ARCHS gave her a grant to help renovate the exterior of the Using a home equity loan as capital, Hayden started her day-care business in Old North St. Louis. Being a working mother helped her find her niche of providing a safe environment for the children of working parents, she said. Hayden’s own children come to the center, and her oldest daughter works as a junior counselor. Hayden said she is nurturing future community leaders. The day care’s motto is “Building Minds for the Future, Character for a Lifetime.” “I would try to comply with a state regulation, and the city would have a separate regulation that was different. Grace Hill really helped me think about all aspects of my business plan.” —Michelle Hayden space she leases from The Youth and Family Center. The money allowed her to add a fire exit and playground. It was hard work getting everything on the same page, Hayden said. “I would try to comply with a state regulation, and the city would have a separate regulation that was different,” she said. “Grace Hill really helped me think about all aspects of my business plan.” LINKING LENDERS “We bring our morals and principles to work with us every day,” she said. Working with children and families is something that comes naturally to Hayden and her staff. They often help the families they serve in other ways. Job, housing, food and human service referral information is kept close at hand. “I’ve had parents who lose their job and need to find another one fast. Sometimes a child support 2 AND COMMUNITIES check is late and food is running out at home or they need help with aging family members as well as babies,” Hayden said. She also has a close relationship with The Youth and Family Center, where her day care is located. The services offered at the center and at the day care complement each other and the organizations often refer families to each other. After being in business one year, Hayden is right on target with her business plan. She gives credit to her husband, children and sister, Gwen Brown. Brown works daily alongside Hayden, teaching 2-year-olds. “Gwen is the person I can always go to when I need an honest answer,” Hayden said. “She always gives me good advice. She cares about me, my family and the kids.” Mechanic Makes House Calls Shelley Wilson—Wilson’s Mobile Oil Change At the age of 13, Shelley Wilson helped her dad when he worked on cars. It was a family tradition. “It started with my grandfather, who passed his love of cars to my dad, who passed it on to me and my brother. I just liked cars and wanted to know what makes them run,” Wilson said. After graduating from high school, Wilson worked at a number of jobs and worked on cars part time. At the age of 30, she became a certified auto mechanic. As a female mechanic, Wilson worked mostly with men and often had to deal with teasing. “It’s a double whammy being a woman and a mechanic,” Wilson related good-naturedly. Wilson was working for a bus company when she decided to investigate starting her own business. She knew she wanted freedom and Shelley Wilson, left, and her partner Laura Rose, run Wilson’s Mobile Oil Change. flexibility in her life. The years of listening to customers talk about their busy lives gave her the idea for her business: a mobile oil change service that comes to a customer’s home or workplace. Wilson began to research ways to make her idea a reality. The Southern Illinois UniversityEdwardsville SBDC office in East St. Louis was the perfect place to go for help and information. There she was able to write an effective business plan, learn how to budget and plan for her business. One of the things she learned was patience. “I wanted everything to happen at once,” Wilson said. “Working with the SBDC taught me how to take steps, allowing me to slowly grow my business, making it financially stronger.” Wilson used her own money to start Wilson’s Mobile Oil Change in Collinsville, Ill., and the business has been debt-free since its birth four years ago. Wilson and her business partner, Laura Rose, scour pawn shops and garage sales for deals on used tools in good condition. They also promote their business by distributing fliers to organizations and businesses in their community. Wilson acknowledged that being debt-free has allowed her time to establish her business and not worry about repaying a loan. She is working on a plan to offer a service package to businesses that have a fleet of vehicles and is investigating ways to offer her services to low-income individuals and the elderly. “There are a lot of people out there who need a car to get back and forth from work but can’t afford to pay the high price at a lube shop or a mechanic. I want to help those people,” Wilson said. SBDCs Offer Technical Help SBDCs in the St. Louis Fed’s district report that they are working with a growing number of women who want to start businesses. For example, Grace Hill Women’s Business Center, an SBDC in St. Louis, provided training classes and one-on-one counseling to 440 women last year. Lynette Watson, the center’s director, said many of those women want to become business owners to have more control of their lives. An SBDC at Southeast Missouri State University also has seen growth in womenowned businesses. The center’s director, Buzz Sutherland, said he’s noticed more women than men start businesses as a ON THE INTERNET AT 3 The Community Affairs staff at the Federal Reserve Bank of St. Louis is focusing its efforts on small business and entrepreneurship during 2004 and 2005. This is the third of several articles scheduled in Bridges on those topics. lifestyle choice. “Many women look for a business venture, like child care, that is fairly inexpensive to start and will provide them a living income,” he said. Jim Mager, director of the Southern Illinois UniversityEdwardsville SBDC, and Theresa Ebeler, development specialist at its East St. Louis Center, also see more women taking charge of their future by starting their own businesses. However, they said women are choosing ventures that are not the traditional businesses women gravitated to in the past. There is one important point that all agree on: Those trying to start new businesses need to be prepared when they go to the bank for a loan. Mager said entrepreneurs sometimes don’t understand that starting a business has an amount of risk involved. “Banks are apprehensive about taking risks, and there is nothing riskier than a small business,” he said. When seeking a loan, entrepreneurs must be prepared to sell themselves, Ebeler said. “A good business plan is not always enough.” WWW.STLOUISFED.ORG Resources for Entrepreneurs Grace Hill Women’s Business Center 2324 N. Florissant Ave. St. Louis, MO 63106 (314) 539-9840 www.gracehill.org/wbc/index.htm Southeast Missouri State University Small Business Development Center Robert A. Dempster Hall Cape Girardeau, MO 63701 (573) 986-6084 www2.semo.edu/sesbdc Southern Illinois University—Edwardsville www.siue.edu/SBA/services.htm Edwardsville Campus SBDC 200 University Park Drive Campus Box 1107 Edwardsville, IL 62026 (618) 650-2929 East St. Louis Campus SBDC 411 E. Broadway, Suite 1010 East St. Louis, IL 62201 (618) 482-8300 Shawnee Community College Office of Economic and Small Business Development 8364 Shawnee College Road Ullin, IL 62992 (618) 634-3231 www.shawneecc.edu/communit/sbdc.asp St. Louis bizwomen.com http://stlouis.bizjournals.com/bizwomen Small Business Administration www.sba.gov Online Women’s Business Center www.onlinewbc.gov/index.html Center for Women’s Business Research www.womensbusinessresearch.org/index.asp National Women’s Business Council www.nwbc.gov/index.html Bank’s Branches Rev Up Community Affairs Work I n case you haven’t heard, the times they are a-changin’ in the Fed’s Eighth District. New people, new programs and a new emphasis on community outreach signal a shift in the focus of the Federal Reserve Bank of St. Louis at its branches in Little Rock, Ark.; Louisville, Ky.; and Memphis, Tenn. By Glenda Wilson Community Affairs Officer In all three zones its branches serve, the St. Louis Fed is working to build a broad “intellectual presence.” An expanded Community Affairs staff is doing its part by reaching out to an increasing number of community leaders. Even as this outreach is taking place, the “physical presence” of the Fed will be less obvious as it closes its buildings in Little Rock and Louisville and moves a streamlined staff into smaller quarters. To understand what this all means, let’s back up a little and Community Affairs Manager Ellen Eubank, left, and Dena Owens have teamed up to cover the Bank’s Memphis zone. Lyn Haralson, left, and Amy Simpkins are working in the Little Rock zone. talk about what precipitated these changes. One of the Fed’s main functions is processing commercial checks—approximately 15 billion to 20 billion a year. As electronic payments become increasingly popular with consumers, the demand for check processing is steadily falling, and studies predict the trend will continue for some time. As a result, Reserve Banks throughout the country are reducing their check operations. By the end of 2006, the number of check processing sites will drop from 45 to 23. The St. Louis Fed was among the first to feel the crunch. Check operations in Little Rock and Louisville were shut down this summer and moved to the Memphis branch and the Cleveland Fed, respectively. Cash processing departments housed in Little Rock and Louisville also were closed. The buildings in both cities are being sold and the remaining staff moved. The Community Affairs Office has worked for about a quarter of a century to foster community development throughout the District. LINKING LENDERS 4 With the main function of the Little Rock and Louisville branches now dispersed to other locations, the question for Eighth District officials was how to maintain a strong presence in those regions as well as the Memphis region. One of the answers was an enhanced focus on community outreach. To accomplish this goal, the branches are expanding outreach efforts and planning new programs. The Bank was a cosponsor of an International Urban Planning and Environment Association symposium in September in Louisville. A major conference on entrepreneurship and small business is scheduled next spring in Memphis. And a community development speaker series is under way in Little Rock. (See related story.) AND COMMUNITIES Faith Weekly, left, and Lisa Locke will provide assistance in the Louisville zone. New staff have come on board in all three cities. In Memphis, Dena Owens is working with Community Affairs Manager Ellen Eubank. Owens formerly was with Memphis Center City Commission. Their zone includes part of western Tennessee, part of eastern Arkansas and the northern half of Mississippi. Eubank can be reached at (901) 579-2421 and Owens at (901) 579-4103. In Little Rock, Amy Simpkins and Community Affairs Specialist Lyn Haralson are working together to cover the majority of Arkansas. Simpkins, who comes to the Fed from Community Health Centers of Arkansas, has experience in nonprofit program management and community outreach. Haralson can be Speaker Series Part of Initiative at Branches Federal Reserve Board’s One of the ways the Federal On Dec. 7, Pinsky will come Consumer Advisory Council. Reserve Bank of St. Louis is to the podium to present his Butts will wrap up the series “Grow, Change or Die” philosodemonstrating its commitment on Feb. 17, 2005. He is pastor phy for community development to an “intellectual presence” at of the nationally renowned corporations. Pinsky practices its branches (see related story) Abyssinian Baptist Church in what he preaches. Since he was is by sponsoring a community Harlem and one of the founders named president and CEO of development speaker series in of the Abyssinian Development National Community Capital Little Rock, Ark. Corp. The community-based Titled “Seizing Opportunities organization has been responsible for Improving Local Commufor more than $300 million nities,” the series features in housing and commerthree exciting speakers, cial development in all well-known authoriHarlem. Butts ties on commucontinues to nity develophelp guide ment. They the daily are Richard operation of Baron, Mark this nonprofit Pinsky and the organization. Rev. Dr. Calvin IM In addition to his work O. Butts III. ES PR I in the community As Bridges goes to T OV NI ING and as a pastor, press, preparations U M L M O O C C A L Butts is presiare under way for dent of SUNY the first lecture (the State on Sept. 30 by University of Baron. His firm, New York) McCormack College of Baron Salazar Rev. Dr. Calvin O. Butts III Richard Baron Old Westbury. in St. Louis, is A native of New York City, he recognized in the community has received more than 1,000 development industry for its Mark Pinsky honors and commendations. role in rebuilding abandoned Among them is recognition Association in 1995, the neturban neighborhoods with as a “Living Treasure” by the work of community developmixed-income housing and New York City Chamber of ment financial institutions has commercial development. Commerce and Industry. grown six-fold. An author of Baron’s holistic approach to reviThe public is invited to attend books and articles on public talizing communities is evident the two remaining lectures, which policy, Pinsky was instrumental in his personal involvement in include a reception. For inforin creating the federal CDFI the community, such as working mation, visit www.stlouisfed.org Fund and is on the CDFI Fund with a St. Louis group to transor call Lyn Haralson at (501) Advisory Board. He also was form seven low-performing 324-8240. recently named vice chair of the city schools. = - S Community DeveLopment *%%$0# *%%$0# + SE OPPORTUNI G N TIE IZI + reached at (501) 324-8240 and Simpkins at (501) 324-8268. In Louisville, Federal Reserve Bank employee Lisa Locke will return to the Community Affairs department after spending several years elsewhere in the Bank. She will join Community Affairs Specialist Faith Weekly. Their zone includes the western half of Kentucky and a portion of southern Indiana. They can be reached at (502) 568-9216. The six Community Affairs specialists will not be alone in their work. Senior branch executives will play a stronger role in Community Affairs and will participate in an increasing number of outreach activities. Economic education coordinators also have been assigned to the three branches. The Community Affairs Office has worked for about a quarter of a century to foster community development throughout the District. The office offers information on topics such as affordable housing, fair access to credit, small business and the Community Reinvestment Act. Community Affairs specialists conduct seminars, write articles and collaborate with other organizations on community development and financial education projects. Most importantly, staff members are a link between lenders and community groups, providing advisory services and technical assistance on issues affecting low- and moderate-income individuals and communities. Speaker Series h Pp Pp Pp ON THE INTERNET AT 5 WWW.STLOUISFED.ORG Campaign Warns: “Don’t Borrow Trouble” A three-year “Don’t Borrow Trouble” campaign was launched earlier this year by the St. Louis Coalition to Promote Reputable Lending. The goal of Don’t Borrow Trouble Metro St. Louis is to educate borrowers on how to avoid predatory lending practices. With the support of Freddie Mac and the U.S. Conference of Mayors, local campaigns are active in dozens of cities across the nation. Refinancing your home can be risky. 1-866-299-2899 Call before you sign anything. By Matthew Ashby Community Affairs Specialist The St. Louis Coalition to Promote Reputable Lending has been working since 2001 to promote sound lending practices in the metropolitan area. (See Bridges, Autumn 2003.) The coalition has grown to a partnership of nearly 60 private, public and nonprofit organizations. In 2001, the coalition began mapping out Eye-catching posters promote the Don't Borrow Trouble Metro St. Louis campaign. Organizers saved money by entering an agreement with a similar campaign in Minnesota to use their promotional materials. a comprehensive, communitywide approach to combat predatory lending. After research into Don’t Borrow Trouble campaigns across the nation, the group wrote a business plan. Information LINKING LENDERS was gathered from the other sites regarding operations, budget, remedies, effectiveness and outcomes. The coalition was not looking to copy other campaigns. Rather, it wanted to adapt the elements that would 6 AND COMMUNITIES work best for local conditions. Freddie Mac and the national Don’t Borrow Trouble program gave the coalition $30,000 to seed the project. The first phase of the threeyear campaign includes establishing an educational component, a grassroots marketing and media campaign, a toll-free hotline for counseling and legal services, and referrals to partner agencies from hotline calls. The hotline was established hand-in-hand with the grassroots marketing campaign. One of the group’s goals was to save each partner unnecessary work and to achieve synergies by clustering activities and roles. A public relations firm provided advice on reaching consumers. Catholic Charities in St. Louis agreed to take hotline calls through its existing call center. An extensive referral network of coalition members was organized to handle calls generated by the marketing and community outreach efforts. The coalition signed an agreement with the Minnesota Don’t Borrow Trouble Campaign to use its print materials and television public service commercials. This provided the St. Louis campaign with a windfall in budget savings. The coalition had the materials edited for items like telephone numbers and names. The University of Missouri Outreach and Extension developed a curriculum for a train- the-trainer program for the public speakers’ bureau. Twentytwo people have completed the training, and public speakers have explained the program during several major events. Funding has come from unexpected places, including a nationwide class action settlement fund managed by a group of state attorney generals. The coalition applied through the Missouri and Illinois attorney generals and received a grant of $54,080. As time goes on, the coalition is evolving. It remains open to new members, watches and listens closely to the local mortgage market, and adapts its approach to change. It is moving from a grassroots stage to a growth state and may soon enter an expansion phase when television and print ads become widespread. The coalition also will address how to reach non-English speaking consumers who may be vulnerable to predators. Any organization interested in Funding for Don’t Borrow Trouble Metro St. Louis St. Louis Affordable Housing Trust Fund $57,500 Consumer Protection and Education Fund $54,080 Freddie Mac $30,000 First Bank $5,000 St. Louis Association of Realtors $5,000 U.S. Bank $750 Commerce Bank $250 becoming a partner in the coalition should contact Mike Eggleston at (314) 533-0600. The local web address is www.beyondhousing.org/ partners/dontborr. The local toll-free hotline number is 1-866-299-2899. The national web site is www.dontborrowtrouble.com. DBT Campaigns Come to Louisville, Memphis St. Louis is not the only city in the Federal Reserve’s Eighth District to have a Don’t Borrow Trouble initiative. Last spring, coalitions in Louisville, Ky., and Memphis, Tenn., announced campaigns in their areas. The hotline number in Louisville is (502) 736-9999. In Memphis, the number is (901) 432-4621. The lead agencies coordinating the effort with Freddie Mac in Louisville are Homeownership Partners and the Louisville Urban League. In addition to the lead agencies and other Kentucky partners, the city of New Albany, Ind., joined the campaign. Foreclosure rates in Kentucky have recently increased, and Indiana has one of the highest foreclosure rates in the nation. Memphis Area Legal Services is the lead agency coordinating Don’t Borrow Trouble Memphis. Flowchart for St. Louis Hotline Calls Hotline calls to 1-866-299-2899 (Catholic Charities) Consumer Loan Workouts Referrals to reputable lenders for 1st & 2nd mortgages Housing counseling—loss mitigation The flow chart shows how calls to the hotline are divided into various categories. Once it is determined where the request fits, the caller is directed to agencies that have agreed to handle the requests for help. ON THE INTERNET Legal services— loss mitigation and litigation Loan rescue fund AT 7 WWW.STLOUISFED.ORG Personal financial education Enforcement Indiana Homeowner Protection Act Exempts Bankers Indiana home buyers have new legislation to protect them from abusive lenders who prey on unsuspecting borrowers. The Indiana Homeowner Protection Act (IHOPA) is intended to curtail high-cost loans that are not in the best interest of the borrower. The law covers loans made by mortgage brokers and consumer finance companies. Lending institutions that are already regulated—banks, trusts, savings and loans, credit unions, and industrial loan and investment companies—are exempt. Unlike similar legislation in other states, IHOPA does not hold wholesale buyers of loans liable for purchasing predatory loans. Federal Home Loan Banks are also exempt from penalties if predatory loans are used as collateral for advances. In addition, the law establishes a homeowner protection unit in the Indiana attorney general’s office. The unit will investigate deceptive practices, institute appropriate administrative and civil actions, and pursue prosecution where appropriate. A new $3 mortgage-recording fee on all mortgages made in the state, including those made by banks, will pay for the unit. • refinance a zero-interest loan, such as a Habitat for Humanity loan, or a subsidized loan within 10 years of the loan origination unless the original lender agrees to the refinancing in writing; and • refuse to tell the borrower what is still owed. For high-cost loans, lenders may not: • roll points and fees into the loan and charge interest on them; • charge certain fees if a loan is refinanced within four years; • charge a penalty for paying off the loan early after the first two years of a loan; • require a balloon payment after regular payments on a loan if the balloon comes within 10 years of start of the loan; • set up a loan so that, even when the borrower makes regular payments, the amount that the borrower owes grows. • make a loan that a borrower cannot pay back, given his or her monthly income. Protection Act Highlights For all home loans, lenders may not: • roll the cost of credit insurance into the loan amount and charge interest on it; • demand that the borrower pay the total amount due on a loan unless the borrower has already stopped making loan payments; Illinois Lenders Invited to Investment Meetings Bankers in Illinois are invited to attend one of two fall luncheon meetings to learn about a CRA investment opportunity from the Illinois Facilities Fund (IFF). Sponsored by the Community Affairs Office of the Federal Reserve Bank of St. Louis, the Oct. 20 and 21 meetings will focus on the IFF. A nonprofit financial institution that helps Illinois nonprofit organizations through real estate and facilities- Recreation Complex, located between Mt. Vernon and Marion, Ill. The Oct. 21 luncheon will be at Lonzerotti’s Italia Restaurant, 600 E. State St., in Jacksonville, Ill. For more information and to register for these meetings, call the Community Affairs Office at (314) 444-8646. To contact the IFF, call the Springfield office at (217) 525-7701 or the Chicago office at (312) 629-0060. related loans, the IFF is seeking investors for its Investor Consortium Fund. The fund is designed to raise $100 million by issuing collateral trust notes. The IFF has a diversified loan portfolio, lowering risk to financial institutions. In addition, the IFF provides investors with reports to assist them in receiving CRA credit. The Oct. 20 luncheon meeting will be at the Seasons Lodge and Restaurant at Rend Lake LINKING LENDERS 8 AND COMMUNITIES SPANNING THE REGION T h e r e g i o n s e r v e d by t h e F e d e r a l R e s e r v e B a n k o f Missouri Tax Credits Designed to Help Business Incubators Taxpayers who contribute $3,000 or more to business incubators in Missouri can apply for state tax credits equal to 50 percent of the contribution. The Small Business Incubator Tax Credit Program is administered by the Department of Economic Development (DED). The maximum tax credit is $50,000 per contribution to a single incubator and $100,000 per contribution to multiple incubators. The overall maximum amount of tax credits that can be issued under the program each year is $500,000. For information, contact the DED at (573) 751-0295 or visit www.missouridevelopment.org. Site Selection Presents Competitiveness Award This past May, Site Selection magazine chose the state of Indiana as the winner of its 2003 Competitiveness Award. The magazine—a publication for CEOs, corporate real estate executives and others working in development—presents the award on the basis of 10 criteria that measure business expansion activity in the previous year. Indiana restructured its business tax system in recent years. That effort has been credited with making the state a more attractive place in which to make S t. L o u i s e n c o m pa s s e s a l l o f A r k a n s a s a n d pa rt s o f I l l i n o i s , investments I n d i a n a , K e n t u c k y, M i s s i s s i p p i , M i s s o u r i a n d T e n n e s s e e . and create jobs. In 2002, the gross web site at www.state.il.us/dfi/ receipts and inventory numbers. The amendments default2.htm. taxes were eliminated, and make it illegal to publicly disthe research and development play an individual’s Social tax credit was increased from Security number; to print the Resource Helps Indiana’s 5 percent to 10 percent. number on cards needed to Agriculture Entrepreneurs In 2003, the state made strides access services and on materials Working under contract to the in job creation by investing $75 that are mailed to the individIndiana Office of the Commismillion in Indiana’s 21st Century ual, with various exceptions; sioner of Agriculture, the SouthResearch and Technology Fund, and to require an individual ern Indiana Rural Development creating a venture capital tax to transmit a Social Security Project (SIRDP) has begun work credit and funding for certified number over the Internet. on the Indiana Alternative Agritechnology parks. House Bill 5197 is new legisculture Directory. The directory Four of the top 10 states listed lation to help protect senior citiwill be a resource for agriculture in Site Selection as being competzens from lenders who offer entrepreneurs and communities reverse mortgages in bad faith. itive—Indiana (1), Kentucky (2), searching for new income-proThe law takes the principles Illinois (4) and Tennessee (10)— ducing activities. developed in the Illinois High are in the Eighth District of the The directory will include listRisk Home Loan Act and applies ings of successful alternative venFederal Reserve Bank of St. Louis. them to reverse mortgage lenders. The criteria used to judge tures as well as case studies of An amendment to the Debt states come from Conway Data 50 enterprises that hold promise Management Services Act proInc.’s proprietary New Plant for Indiana farmers in transition. tects consumers from deceptive SIRDP, a nonprofit organization, database, which tracks new and credit counseling services. The is working in partnership with expanding corporate facilities. law targets debt management many organizations to develop companies that abuse conthese materials, including Purdue New Illinois Laws Target sumers by not performing debt University’s New Ventures Team, Fraudulent Practices management services and by county extension offices and The state of Illinois recently charging excessive fees. other agricultural organizations. struck a blow on fraud with four Senate Bill 2901 requires retailSIRDP anticipates completion pieces of legislation to combat ers to provide written notices of the Alternative Agriculture identify theft, deceptive practices regarding fees, charges and expiDirectory by late 2004. by lenders making reverse mortration dates attached to gift cards. For more information or to gages, deceptive credit counselFor more information, visit the find out how to nominate a sucing by debt management services Illinois attorney general’ s web and gift certificate fraud. cessful agricultural entrepreneur site at www.ag.state.il.us, the Amendments to the Consumer for inclusion, contact Ellen Illinois Public Safety web site Fraud and Deceptive Business Cowell at SIRDP by e-mail at at www.illinois.gov/safety or the Practices Act curtail unnecessary ecowell@sdg.us or by phone Division of Financial Institutions at 1-800-816-0019. dissemination of Social Security ON THE INTERNET AT 9 WWW.STLOUISFED.ORG Get Checking Get Checking, a program for former or current bank customers who have had problems managing their checking accounts, will be the topic of a Nov. 4 meeting for bankers who work in St. Louis city and county and Jefferson and St. Charles counties. The University of Missouri Outreach & Extension and the Federal Reserve Bank of St. Louis are sponsoring the meeting. This innovative program teaches consumers how to manage checking accounts and how to reestablish their relationship with a bank by cleaning up their ChexSystems report. Financial institutions can help bring Get Checking to the St. Louis area by providing Have you HEARD Credit Bureau Takes New Approach to Building Credit Histories A new national credit bureau is helping consumers who do not have mortgages or credit cards build credit histories based on other types of payments. The credit bureau—called Pay Rent, Build Credit (PRBC)—has developed a data network where consumers can list other bills they have paid, such as rent, utilities and insurance. The information is verified by a PRBC partner. Consumers can present the data they funding. They can also work with local educators and Get Checking national partners to promote the program. Graduates of the program receive a certificate they can use at participating financial institutions to open a new account, reestablish a relationship with the financial institution and restore their credit. The benefits of the program are two-fold. Graduates understand solid banking basics and have skills to manage their accounts. Financial institutions benefit by enhancing their relationships in the community, creating new partnerships, increasing marketing and community reinvestment initiatives— including receiving service test credit for CRA—and giving their new customers a chance to Get Checking. For more information about the Nov. 4 meeting at the Federal Reserve Bank of St. Louis or to register, call Jean Morisseau-Kuni at (314) 444-8646. have entered in the network to landlords or lenders when applying for apartments or mortgages. PRBC is also working with bill payment service providers who, with the consumer’s consent, would automatically report payments to the PRBC Data Network. For more information, visit www.payrentbuildcredit.com. Main Street Sets Deadline for 2005 Awards Program The Main Street National Trust for Historic Preservation is accepting nominations for its 2005 awards program until Nov. 4. The national trust is also accepting applications for its certification program for professionals. The Great American Main Street Awards recognize communities that LINKING LENDERS 10 have made significant achievements in revitalizing their commercial districts while keeping focused on historic preservation. Winners will receive $2,500, a trophy and national recognition. Applicants do not have to be affiliated with a Main Street community or program. Community leaders and advocates who have helped revitalize commercial districts are eligible for a Main Street Leadership Award. Nominees may include schools, businesses, individuals, elected officials, government agencies and other organizations. Winners will receive a trophy and national recognition. Neither the nominators nor the nominees have to be affiliated with a Main Street community or program. AND COMMUNITIES To learn more about the nomination process for either award, visit www.mainstreet.org/awards or call (202) 588-6140. The national trust is also accepting applications from professionals for its Certification in Professional Main Street Management training and credentials program. Applicants do not have to be affiliated with a Main Street community or program. Past applicants have included architects, planners and other professionals working in community development and commercial district revitalization. For information, visit www.mainstreet.org/certification or call (202) 588-6140. RESOURCES Metropolitan Statistical Areas: New spreadsheets, e-mail, address books, Tennessee Economic Development Standards and Their Impact on Selected notebooks, calendars and a file explorer. Guide—The guide provides an overview of Federal Programs—The General Accounting What sets SimIndiana apart is that the Tennessee’s economic accomplishments Office recently released a report on new software is provided by the state of Indiana each year. This year, the guide includes an standards for federal statistical recognition at no charge. The only requirement is update on the state’s growing technology of metropolitan areas. The standards, that users sign up with a valid Indiana fields and automotive industry. It also announced in 2000, include a new desig- address. For more information, visit looks at the state’s support for entrepre- nation: micropolitan statistical areas, which www.simindiana.com. neurs. To find out more, visit applies to less populated areas. To read www.tnedg.com or call Dawn Rutledge the report, go to www.gao.gov/cgi-bin/ 2004 State of the Nation’s Housing— getrpt?GAO-04-758. Harvard University’s Joint Center for BRIDGES Bridges is a publication of the Community Affairs department of the Federal Reserve Bank of St. Louis. It is intended to inform bankers, community development organizations, representatives of state and local government agencies and others in the Eighth District about current issues and initiatives in community and economic development. The Eighth District includes the state of Arkansas and parts of Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee. Jones at (615) 253-1760. CALENDAR Contributors: Glenda Wilson Community Affairs Officer Managing Editor (314) 444-8317 Housing Studies released its report this Dinero Hispano—A new web site presents SimIndiana—This is a suite of desktop summer. The center predicts that the hous- personal financial education in Spanish. productivity applications that recently has ing industry will experience another strong The site was developed by the InCharge been made available to Indiana residents decade, with women, minorities and immi- Institute of America, a national nonprofit for personal, academic, business or com- grants playing a larger role in housing organization. The web address is Linda Fischer Editor (314) 444-8979 munity use. The product list includes famil- markets. The report is available at www.dinerohispano.com. Community Affairs staff iar applications such as word processing, www.jchs.harvard.edu. NOVEMBER 3-6 DECEMBER 8-9 JANUARY 13-14 Growth Through Change: Meeting the Challenge Together—Chicago Sponsor: National Community Capital Association www.communitycapital.org (215) 923-4754 Consequences of the Consumer Lending Revolution—St. Louis Sponsors: Saint Louis University, Washington University, Consumer Federation of America and the National Consumer Law Center http://law.slu.edu/conf/lending/index.html Cooperating to Develop Communities: Urban Rural Connections—St. Louis Sponsor: Missouri Community Development Society www.mocds.org 5 13-17 Roundtable on CRA—Erie, Pa. Sponsor: Federal Reserve Bank of Cleveland (412) 261-7947 or 1-800-433-1035 NeighborWorks Training Institute—New Orleans Sponsor: Neighborhood Reinvestment Corp. www.nw.org/training 1-800-438-5547 15-18 Housing Finance Institute—Boston Sponsor: Fannie Mae www.efanniemae.com/learning_center 1-800-243-5478 27-29 4th Annual New Partners for Smart Growth: Building Safe, Healthy and Livable Communities—Miami Beach, Fla. Sponsors: Local Government Commission and Penn State www.NewPartners.org (814) 863-5100 St. Louis: Matthew Ashby (314) 444-8891 Jean Morisseau-Kuni (314) 444-8646 Memphis: Ellen Eubank (901) 579-2421 Dena Owens (901) 579-4103 Little Rock: Lyn Haralson (501) 324-8240 Amy Simpkins (501) 324-8268 Louisville: Faith Weekly Lisa Locke (502) 568-9216 The views expressed in Bridges are not necessarily those of the Federal Reserve Bank of St. Louis or the Federal Reserve System. Material herein may be reprinted or abstracted as long as Bridges is credited. Please provide the editor with a copy of any reprinted articles. If you have an interesting community development program or idea for an article, we would like to hear from you. Please contact the editor. 16 Entrepreneurs and Money...Getting Together—St. Louis Sponsor: Missouri Venture Forum (314) 241-2683 Free subscriptions and additional copies are available by calling (314) 444-8761 or by e-mail to communityaffairs@stls.frb.org. ON THE INTERNET AT 11 WWW.STLOUISFED.ORG Post Office Box 442 St. Louis, MO 63166-0442E FIRST-CLASS MAIL U.S. POSTAGE PAID ST. LOUIS, MO PERMIT NO. 444
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