WHEREAS, In the fall of 2002, based on Resolution 020522, introduced by Councilman W. Wilson Goode, Jr., the Council of the City of Philadelphia held hearings on the issue of community reinvestment within the City of Philadelphia, spurring the creation of the Small Business Lending Task Force of the Community and Economic Development Committee of GPUAC; and
WHEREAS, A study of Community Reinvestment Disclosure data by the National Community Reinvestment Coalition showed that such areas do not receive the number and dollar volume of loans from traditional financial institutions that are proportionate to the percentage of small businesses located in those areas; and
WHEREAS, A number of factors contribute to this disparity, including lack of bank branches in those areas, lack of advertising by banks, a lack of aggressive outreach for business development in those areas, and lending standards that effectively screen out borrowers; and
WHEREAS, Traditional lenders contend that those areas contain a disproportionate percentage of small businesses with poor credit histories and lack of equity/collateral, thus marking them as high risk markets; and
WHEREAS, The Small Business Lending Task Force of the Community and Economic Development Committee of GPUAC, in its February 6th draft report on the state of small business lending in Philadelphia’s low and moderate income and minority communities, has set forth several potential solutions, including a loan guarantee fund, alternative loan programs, and an information and referral system for small businesses; and
WHEREAS, These potential solutions should be incorporated into the development of the $500 million Economic Development Capital Fund proposed by the Street administration; now therefore, be it
RESOLVED, BY THE COUNCIL OF THE CITY OF PHILADELPHIA, That the Committee on Commerce and Economic Development is hereby authorized to hold hearings examining small business lending in low and moderate income and minority areas within the City of Philadelphia.
End