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By Jean Morisseau-KuniCommunity Affairs Analyst
S
mall business has seen biggrowth in the past 10 years,and small businesses owned
by women have flourished, with agrowth rate of 37 percentfourtimes the growth rate of all firms.The Small Business Association(SBA) estimates that minoritywomen own 1.2 million busi-nesses, which makes them thefastest growing segment ofwomen-owned businesses.
Making the decision to startand grow a business is not aneasy one. Fledgling businessowners learn quickly that gettingthe right financing, developmen-tal help and support can makethe difference between a success-ful venture and failure. In theFederal Reserves Eighth District,three women who made the leapand became business ownersshare their stories of becomingwomen entrepreneurs.
Fulfilling a Sweet Destiny
Susan JonesLittle Shop of PastriesSusan Jones had sentimental
reasons for starting her business.When I was 17, my grand-mother retired from her wed-
ding cake business and gave meher cake pans, she said. Iknew at that moment I wantedto do something special withthose pans. The concept ofJones business, Little Shop ofPastries in Vienna, Ill., grewfrom that desire.
Jones started her business in asmall shop near the Viennatown square.
I knew I could do somethingwith the shop, she said. Icould see myself running a
small bakery and selling wed-ding cakes. Jones wrote herbusiness plan with help fromfamily and friends and withinformation she received fromthe Small Business DevelopmentCenter (SBDC) at Murray StateUniversity in Kentucky. When
she approached a local bank tosecure a loan, she received apleasant surprise. The loan offi-cer was impressed with herbusiness plan and asked herwho wrote it. I didnt know if I
should feel proud or be insult-ed, she said. I really didntcare. I got the loan and LittleShop of Pastries was born.
Her business was a successfrom the start, and she soonstarted selling sandwiches andbeverages along with her pas-tries. She added tables to
accommodate customers whowanted a place to sit. It was sotight in there you could hardlymove, Jones said. I was sur-prised that people waited in linefor a table.
The Vienna Chamber of Com-merce contacted Jones aboutexpanding her business to abigger location and suggested shevisit the SBDC at Shawnee Com-munity College. At the SBDC,
Women Entrepreneurs Growing in Numbers
continued on Page 2
AUTUMN 2004L I N K I N G L E N D E R S A N D C O M M U N I T I E S
PUBLISHED QUARTERLY
BY THE COMMUNITY
AFFAIRS DEPARTMENT OF
THE FEDERAL RESERVE
BANK OF ST. LOUIS
PUBLISHED QUARTERLY
BY THE COMMUNITY
AFFAIRS DEPARTMENT OF
THE FEDERAL RESERVE
BANK OF ST. LOUIS
BRIDGES W W W . S T L O U I S F E D . O R G
4
IN
DEX
Susan Jones, owner of Little Shop of Pastries in Vienna, Ill., still uses her grandmotherscake pans to bake wedding cakes.
Speakers in Limelight5 9Dont Borrow Trouble
6
Spanning the RegionBranching Out
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Jones took advantage of entrepre-neurship classes. Everyone atthe center was so helpful and theentrepreneur classes have beenvery useful. The information I got
from them has helped me morethan once, Jones said. The cen-ter also helped Jones obtain amicroenterprise grant from theSouthernmost Illinois DeltaEmpowerment Zone. She used itto expand to her current location.
Its hard to say what I wouldchange, if I could. Ive had hard
knocks, but they only make youbetter at what youre doing,Jones said. Little Shop ofPastries has grown into a bakery,restaurant and now a cateringbusiness. Her success comesfrom selling quality products forfair prices and giving customerswhat they want, she said. Itsnot unusual for her to make
wedding cakes from her cus-tomers favorite recipes. Jonessaid she also owes her successto her loyal staff and supportivefamily. Running the shop is afamily affair. Jones mother-in-law, Betty Jones, has workedbeside her since the shopopened. Her husband and chil-
dren help out by washing dish-es, decorating cookies andworking at events.
When we serve meals and Ihear people talking about howgood the food tastes or a cus-tomer comes in to buy rollsbecause Sunday dinner isntcomplete without my rolls or abride is glowing because her
wedding cake is perfect, I feelfantastic, Jones said.
Building Minds for the Future,
Character for a Lifetime
Michelle HaydenOne StepAhead Daycare Center
Michelle Hayden worked withGrace Hill Womens Business
Center and Area Resources forCommunity and Human Services(ARCHS) to start her business,One Step Ahead Daycare Center.Grace Hill helped Hayden developa business plan and providedentrepreneurship training.ARCHS gave her a grant to helprenovate the exterior of the
space she leases from The Youth
and Family Center. The moneyallowed her to add a fire exitand playground.
It was hard work gettingeverything on the same page,Hayden said. I would try tocomply with a state regulation,and the city would have a sepa-rate regulation that was differ-ent, she said. Grace Hill really
helped me think about allaspects of my business plan.
Using a home equity loanas capital, Hayden started herday-care business in Old NorthSt. Louis. Being a working moth-er helped her find her niche ofproviding a safe environment for
the children of working parents,she said. Haydens own childrencome to the center, and her old-est daughter works as a juniorcounselor. Hayden said she isnurturing future communityleaders. The day cares motto isBuilding Minds for the Future,Character for a Lifetime.
We bring our morals and
principles to work with us everyday, she said.
Working with children andfamilies is something that comesnaturally to Hayden and her staff.They often help the families theyserve in other ways. Job, housing,food and human service referralinformation is kept close at hand.Ive had parents who lose their
job and need to find another onefast. Sometimes a child support
check is late and food is runningout at home or they need helpwith aging family members as wellas babies, Hayden said. She alsohas a close relationship with TheYouth and Family Center, where
her day care is located. The ser-vices offered at the center and atthe day care complement eachother and the organizations oftenrefer families to each other.
After being in business one year,Hayden is right on target with herbusiness plan. She gives creditto her husband, children and sis-
ter, Gwen Brown. Brown worksdaily alongside Hayden, teaching2-year-olds. Gwen is the personI can always go to when I needan honest answer, Hayden said.She always gives me good advice.She cares about me, my familyand the kids.
Mechanic Makes House Calls
Shelley WilsonWilsons MobileOil Change
At the age of 13, Shelley Wilsonhelped her dad when he workedon cars. It was a family tradition.
It started with my grandfather,who passed his love of cars to mydad, who passed it on to me andmy brother. I just liked cars and
wanted to know what makesthem run, Wilson said. Aftergraduating from high school,Wilson worked at a number ofjobs and worked on cars parttime. At the age of 30, shebecame a certified auto mechanic.
As a female mechanic, Wilsonworked mostly with men andoften had to deal with teasing.
Its a double whammy being awoman and a mechanic, Wilson
2L I N K I N G L E N D E R S A N D C O M M U N I T I E S
continued from Page 1
I would try to comply with a
state regulation, and the city
would have a separate regula-
tion that was different. Grace
Hill really helped me thinkabout all aspects of my
business plan.
Michelle Hayden
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related good-naturedly. Wilsonwas working for a bus companywhen she decided to investigatestarting her own business. Sheknew she wanted freedom and
flexibility in her life. The yearsof listening to customers talkabout their busy lives gave herthe idea for her business: amobile oil change service thatcomes to a customers homeor workplace.
Wilson began to research waysto make her idea a reality. TheSouthern Illinois University-Edwardsville SBDC office in EastSt. Louis was the perfect place to gofor help and information. Thereshe was able to write an effectivebusiness plan, learn how to bud-get and plan for her business.
One of the things she learnedwas patience. I wanted every-thing to happen at once, Wilsonsaid. Working with the SBDCtaught me how to take steps, allow-ing me to slowly grow my business,making it financially stronger.
Wilson used her own money tostart Wilsons Mobile Oil Changein Collinsville, Ill., and the busi-
ness has been debt-free since itsbirth four years ago. Wilson and
her business partner, Laura Rose,scour pawn shops and garagesales for deals on used tools ingood condition. They also pro-mote their business by distribut-ing fliers to organizations and
businesses in their community.Wilson acknowledged that
being debt-free has allowed hertime to establish her business andnot worry about repaying a loan.She is working on a plan to offera service package to businessesthat have a fleet of vehicles andis investigating ways to offer her
services to low-income individu-als and the elderly. There are alot of people out there who needa car to get back and forth fromwork but cant afford to pay thehigh price at a lube shop or amechanic. I want to help thosepeople, Wilson said.
SBDCs Offer Technical Help
SBDCs in the St. Louis Feds dis-trict report that they are workingwith a growing number of womenwho want to start businesses.
For example, Grace HillWomens Business Center, anSBDC in St. Louis, providedtraining classes and one-on-onecounseling to 440 women last
year. Lynette Watson, the cen-ters director, said many of thosewomen want to become busi-ness owners to have more con-trol of their lives.
An SBDC at SoutheastMissouri State University alsohas seen growth in women-owned businesses. The centersdirector, Buzz Sutherland, said
hes noticed more women thanmen start businesses as a
lifestyle choice. Many womenlook for a business venture, like
child care, that is fairly inexpen-sive to start and will providethem a living income, he said.
Jim Mager, director of theSouthern Illinois University-Edwardsville SBDC, and TheresaEbeler, development specialist atits East St. Louis Center, also seemore women taking charge oftheir future by starting their own
businesses. However, they saidwomen are choosing ventures thatare not the traditional businesseswomen gravitated to in the past.
There is one important pointthat all agree on: Those tryingto start new businesses need tobe prepared when they go to thebank for a loan.
Mager said entrepreneurssometimes dont understandthat starting a business has anamount of risk involved. Banksare apprehensive about takingrisks, and there is nothing riskierthan a small business, he said.
When seeking a loan, entre-preneurs must be prepared tosell themselves, Ebeler said.
A good business plan is notalways enough.
Resources for Entrepreneurs
Grace Hill Womens Business Center
2324 N. Florissant Ave.St. Louis, MO 63106(314) 539-9840www.gracehill.org/wbc/index.htm
Southeast Missouri State UniversitySmall Business Development CenterRobert A. Dempster HallCape Girardeau,MO 63701(573) 986-6084www2.semo.edu/sesbdc
Southern Illinois UniversityEdwardsvillewww.siue.edu/SBA/services.htm
Edwardsville Campus SBDC200 University Park DriveCampus Box 1107Edwardsville, IL 62026(618) 650-2929East St. Louis Campus SBDC411 E. Broadway, Suite 1010East St. Louis, IL 62201(618) 482-8300
Shawnee Community CollegeOffice of Economic andSmall Business Development8364 Shawnee College Road
Ullin, IL 62992(618) 634-3231www.shawneecc.edu/communit/sbdc.asp
St. Louis bizwomen.comhttp://stlouis.bizjournals.com/bizwomen
Small Business Administrationwww.sba.gov
Online Womens Business Centerwww.onlinewbc.gov/index.html
Center for Womens Business Researchwww.womensbusinessresearch.org/index.asp
National Womens Business Councilwww.nwbc.gov/index.html
3O N T H E I N T E R N E T A T W W W . S T L O U I S F E D . O R G
Shelley Wilson, left, and her partner LauraRose, run Wilsons Mobile Oil Change.
The Community Affairs staff at the Federal Reserve Bank of St. Louis is focusing its effortson small business and entrepreneurship during 2004 and 2005. This is the third of severalarticles scheduled in Bridges on those topics.
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By Glenda WilsonCommunity Affairs Officer
In all three zones its branchesserve, the St. Louis Fed is work-ing to build a broad intellectual
presence. An expanded Commu-nity Affairs staff is doing its partby reaching out to an increasingnumber of community leaders.Even as this outreach is takingplace, the physical presence ofthe Fed will be less obvious as itcloses its buildings in Little Rockand Louisville and moves a stream-lined staff into smaller quarters.
To understand what this allmeans, lets back up a little and
talk about what precipitatedthese changes.
One of the Feds main func-tions is processing commercialchecksapproximately 15 billionto 20 billion a year. As electron-ic payments become increasing-ly popular with consumers, thedemand for check processing is
steadily falling, and studies pre-dict the trend will continue forsome time.
As a result, Reserve Banksthroughout the country arereducing their check operations.By the end of 2006, the numberof check processing sites will dropfrom 45 to 23. The St. Louis Fed
was among the first to feel thecrunch. Check operations inLittle Rock and Louisville wereshut down this summer andmoved to the Memphis branchand the Cleveland Fed, respec-tively. Cash processing depart-ments housed in Little Rockand Louisville also were closed.The buildings in both cities are
being sold and the remainingstaff moved.
With the main function of theLittle Rock and Louisville branches
now dispersed to other locations,the question for Eighth Districtofficials was how to maintain astrong presence in those regionsas well as the Memphis region.
One of the answers was anenhanced focus on communityoutreach.
To accomplish this goal, the
branches are expanding outreachefforts and planning new programs.The Bank was a cosponsor of anInternational Urban Planning andEnvironment Association sympo-sium in September in Louisville.A major conference on entrepre-neurship and small business isscheduled next spring in Memphis.And a community development
speaker series is under way inLittle Rock. (See related story.)
New staff have come on boardin all three cities.
In Memphis, Dena Owens isworking with Community AffairsManager Ellen Eubank. Owensformerly was with MemphisCenter City Commission. Theirzone includes part of westernTennessee, part of easternArkansas and the northern halfof Mississippi. Eubank can be
reached at (901) 579-2421 andOwens at (901) 579-4103.
In Little Rock, Amy Simpkinsand Community Affairs Special-ist Lyn Haralson are workingtogether to cover the majority ofArkansas. Simpkins, who comesto the Fed from CommunityHealth Centers of Arkansas, hasexperience in nonprofit program
management and communityoutreach. Haralson can be
4L I N K I N G L E N D E R S A N D C O M M U N I T I E S
Banks Branches Rev Up Community Affairs Work
Faith Weekly, left, and Lisa Locke will pro-vide assistance in the Louisville zone.
Lyn Haralson, left, and Amy Simpkins areworking in the Little Rock zone.
Community Affairs Manager Ellen Eubank,left, and Dena Owens have teamed up tocover the Banks Memphis zone.
In case youhavent heard,
the times theyare a-changin in theFeds Eighth District.
New people, newprograms and a newemphasis on commu-
nity outreach signala shift in the focus ofthe Federal ReserveBank of St. Louisat its branches inLittle Rock, Ark.;
Louisville, Ky.; andMemphis, Tenn.
The Community Affairs Office has
worked for about a quarter of a cen-
tury to foster community development
throughout the District.
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One of the ways the FederalReserve Bank of St. Louis isdemonstrating its commitment
to an intellectual presence atits branches (see related story)is by sponsoring a communitydevelopment speaker series inLittle Rock, Ark.
Titled Seizing Opportunitiesfor Improving Local Commu-nities, the series featuresthree exciting speakers,
all well-known authori-ties on commu-nity develop-ment. Theyare RichardBaron, MarkPinsky and theRev. Dr. CalvinO. Butts III.
As Bridges goes to
press, preparationsare under way forthe first lectureon Sept. 30 byBaron. His firm,McCormackBaron Salazarin St. Louis, isrecognized in the community
development industry for itsrole in rebuilding abandonedurban neighborhoods withmixed-income housing andcommercial development.Barons holistic approach to revi-talizing communities is evidentin his personal involvement inthe community, such as workingwith a St. Louis group to trans-
form seven low-performingcity schools.
On Dec. 7, Pinsky will cometo the podium to present hisGrow, Change or Die philoso-
phy for community developmentcorporations. Pinsky practiceswhat he preaches. Since he wasnamed president and CEO ofNational Community Capital
Association in 1995, the net-work of community develop-ment financial institutions hasgrown six-fold. An author ofbooks and articles on publicpolicy, Pinsky was instrumentalin creating the federal CDFIFund and is on the CDFI Fund
Advisory Board. He also wasrecently named vice chair of the
Federal Reserve BoardsConsumer Advisory Council.
Butts will wrap up the series
on Feb. 17, 2005. He is pastorof the nationally renownedAbyssinian Baptist Church inHarlem and one of the foundersof the Abyssinian DevelopmentCorp. The community-basedorganization has been responsible
for more than $300 millionin housing and commer-
cial development inHarlem. Buttscontinues to
help guidethe dailyoperation of
this nonprofitorganization.
In addition to his workin the community
and as a pastor,Butts is presi-dent of SUNY(the StateUniversity of
New York)College of
Old Westbury.A native of New York City, he
has received more than 1,000honors and commendations.Among them is recognitionas a Living Treasure by theNew York City Chamber ofCommerce and Industry.
The public is invited to attendthe two remaining lectures, whichinclude a reception. For infor-mation, visit www.stlouisfed.org
or call Lyn Haralson at (501)324-8240.
reached at (501) 324-8240 andSimpkins at (501) 324-8268.
In Louisville, Federal Reserve
Bank employee Lisa Locke willreturn to the Community Affairsdepartment after spending sev-eral years elsewhere in the Bank.She will join Community AffairsSpecialist Faith Weekly. Theirzone includes the western halfof Kentucky and a portion ofsouthern Indiana. They can be
reached at (502) 568-9216.The six Community Affairsspecialists will not be alone intheir work. Senior branch exec-utives will play a stronger role inCommunity Affairs and will par-ticipate in an increasing numberof outreach activities. Economiceducation coordinators also havebeen assigned to the three branches.
The Community Affairs Officehas worked for about a quarterof a century to foster communi-ty development throughout theDistrict. The office offers infor-mation on topics such as afford-able housing, fair access to credit,small business and the Commu-nity Reinvestment Act. Commu-
nity Affairs specialists conductseminars, write articles and col-laborate with other organizationson community development andfinancial education projects.
Most importantly, staff mem-bers are a link between lendersand community groups, provid-ing advisory services and techni-cal assistance on issues affecting
low- and moderate-income indi-viduals and communities.
5O N T H E I N T E R N E T A T W W W . S T L O U I S F E D . O R G
pP
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Speaker Series Part of Initiative at Branches
Community DeveLopment=*%%$0#
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IZIN
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OVINGLOCAL COMMUN
ITIE
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Richard Baron
Mark Pinsky
pPRev. Dr. Calvin O. Butts III
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By Matthew AshbyCommunity Affairs Specialist
The St. Louis Coalition toPromote Reputable Lending hasbeen working since 2001 topromote sound lending prac-tices in the metropolitan area.(See Bridges, Autumn 2003.)The coalition has grown to apartnership of nearly 60 pri-vate, public and nonprofit
organizations. In 2001, thecoalition began mapping out
a comprehensive, community-wide approach to combat preda-tory lending.
After research into Dont Bor-row Trouble campaigns across
the nation, the group wrote abusiness plan. Information
was gathered from the othersites regarding operations, bud-get, remedies, effectiveness andoutcomes. The coalition wasnot looking to copy other cam-
paigns. Rather, it wanted toadapt the elements that would
work best for local conditions.Freddie Mac and the nationalDont Borrow Trouble program
gave the coalition $30,000 toseed the project.
The first phase of the three-year campaign includes establish-ing an educational component, agrassroots marketing and mediacampaign, a toll-free hotline forcounseling and legal services,and referrals to partner agencies
from hotline calls. The hotlinewas established hand-in-handwith the grassroots marketingcampaign. One of the groupsgoals was to save each partnerunnecessary work and to achievesynergies by clustering activitiesand roles.
A public relations firm pro-vided advice on reaching con-
sumers. Catholic Charities inSt. Louis agreed to take hotlinecalls through its existing callcenter. An extensive referralnetwork of coalition memberswas organized to handle callsgenerated by the marketing andcommunity outreach efforts.
The coalition signed an agree-
ment with the Minnesota DontBorrow Trouble Campaign touse its print materials and televi-sion public service commercials.This provided the St. Louis cam-paign with a windfall in budgetsavings. The coalition had thematerials edited for items liketelephone numbers and names.
The University of Missouri
Outreach and Extension devel-oped a curriculum for a train-
6L I N K I N G L E N D E R S A N D C O M M U N I T I E S
Call 1-866-299-2899before you sign anything.
Refinancing your homecan be risky.
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.
Campaign Warns: Dont Borrow Trouble
Athree-yearDont Borrow
Trouble cam-paign was launchedearlier this year by theSt. Louis Coalition toPromote ReputableLending. The goal ofDont Borrow Trouble
Metro St. Louis is toeducate borrowers onhow to avoid predato-ry lending practices.
With the support ofFreddie Mac and theU.S. Conference ofMayors, local cam-paigns are active indozens of cities acrossthe nation.
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the-trainer program for thepublic speakers bureau. Twenty-two people have completed thetraining, and public speakershave explained the programduring several major events.
Funding has come from unex-pected places, including a nation-wide class action settlement fundmanaged by a group of state
attorney generals. The coalitionapplied through the Missouriand Illinois attorney generalsand received a grant of $54,080.
As time goes on, the coalitionis evolving. It remains open to
new members, watches and lis-tens closely to the local mort-gage market, and adapts itsapproach to change. It is
moving from a grassroots stageto a growth state and maysoon enter an expansion phasewhen television and print adsbecome widespread. The coali-tion also will address how to
reach non-English speaking con-sumers who may be vulnerableto predators.
Any organization interested in
becoming a partner in the coali-tion should contact MikeEggleston at (314) 533-0600.
The local web address iswww.beyondhousing.org/partners/dontborr.
The local toll-free hotlinenumber is 1-866-299-2899.
The national web site iswww.dontborrowtrouble.com.
7O N T H E I N T E R N E T A T W W W . S T L O U I S F E D . O R G
DBT Campaigns Come to Louisville, Memphis
St. Louis is not the only city in the Federal Reserves Eighth District tohave a Dont 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 addi-tion to the lead agencies and other Kentucky partners, the city of NewAlbany, Ind., joined the campaign. Foreclosure rates in Kentucky haverecently increased, and Indiana has one of the highest foreclosure ratesin the nation.
Memphis Area Legal Services is the lead agency coordinating Dont
Borrow Trouble Memphis.
Hotline calls to 1-866-299-2899
(Catholic Charities)
ConsumerLoan
Workouts
Referrals toreputable lenders for1st & 2nd mortgages
Housing coun-selinglossmitigation
Legal servicesloss mitigationand litigation
Personalfinancial
education
Loan rescue fund Enforcement
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.
Flowchart for St. Louis Hotline Calls
Funding for Dont 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
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8/128L I N K I N G L E N D E R S A N D C O M M U N I T I E S
Bankers in Illinois are invitedto attend one of two fall lun-
cheon meetings to learn abouta CRA investment opportunityfrom the Illinois FacilitiesFund (IFF).
Sponsored by the Commu-nity Affairs Office of the FederalReserve Bank of St. Louis, theOct. 20 and 21 meetings willfocus on the IFF. A nonprofitfinancial institution that helps
Illinois nonprofit organizationsthrough real estate and facilities-
related loans, the IFF is seekinginvestors for its Investor Consor-
tium Fund. The fund is designedto raise $100 million by issuingcollateral trust notes.
The IFF has a diversified loanportfolio, lowering risk to finan-cial institutions. In addition,the IFF provides investors withreports to assist them in receiv-ing CRA credit.
The Oct. 20 luncheon meet-
ing will be at the Seasons Lodgeand Restaurant at Rend Lake
Recreation Complex, locatedbetween Mt. Vernon and
Marion, Ill. The Oct. 21 lun-cheon will be at LonzerottisItalia Restaurant, 600 E. StateSt., in Jacksonville, Ill.
For more information and toregister for these meetings, callthe Community Affairs Office at(314) 444-8646. To contact theIFF, call the Springfield office at(217) 525-7701 or the Chicago
office at (312) 629-0060.
For all home loans, lendersmay not: roll the cost of credit insur-
ance into the loan amountand charge interest on it;
demand that the borrowerpay the total amount due ona loan unless the borrowerhas already stopped makingloan payments;
refinance a zero-interest loan,such as a Habitat for Humanityloan, or a subsidized loanwithin 10 years of the loanorigination unless the originallender agrees to the refinanc-ing in writing; and
refuse to tell the borrowerwhat is still owed.
For high-cost loans, lendersmay 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 firsttwo years of a loan;
require a balloon payment after
regular payments on a loanif the balloon comes within10 years of start of the loan;
set up a loan so that, evenwhen the borrower makesregular payments, the amountthat the borrower owes grows.
make a loan that a borrowercannot pay back, given his orher monthly income.
Indiana home buyers have newlegislation to protect them fromabusive lenders who prey on
unsuspecting borrowers. TheIndiana Homeowner ProtectionAct (IHOPA) is intended to cur-tail high-cost loans that are not inthe best interest of the borrower.
The law covers loans made by
mortgage brokers and consumerfinance companies. Lendinginstitutions that are already reg-
ulatedbanks, trusts, savingsand loans, credit unions, andindustrial loan and investmentcompaniesare exempt.
Unlike similar legislation inother states, IHOPA does not
hold wholesale buyers of loansliable for purchasing predatoryloans. Federal Home Loan
Banks are also exempt frompenalties if predatory loans areused as collateral for advances.
In addition, the law establish-es a homeowner protection unitin the Indiana attorney generals
office. The unit will investigatedeceptive practices, instituteappropriate administrative and
civil actions, and pursue prose-cution where appropriate. Anew $3 mortgage-recording feeon all mortgages made in thestate, including those made bybanks, will pay for the unit.
Indiana Homeowner Protection Act Exempts Bankers
Protection Act Highlights
Illinois Lenders Invited to Investment Meetings
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Missouri Tax Credits Designed
to Help Business IncubatorsTaxpayers who contribute
$3,000 or more to businessincubators in Missouri can applyfor state tax credits equal to 50percent of the contribution.The Small Business IncubatorTax Credit Program is adminis-tered by the Department ofEconomic Development (DED).
The maximum tax credit is$50,000 per contribution to asingle incubator and $100,000per contribution to multipleincubators. The overall maxi-mum amount of tax credits thatcan be issued under the pro-gram each year is $500,000.
For information, contact the
DED at (573) 751-0295 or visitwww.missouridevelopment.org.
Site Selection Presents
Competitiveness Award
This past May, Site Selectionmagazine chose the state ofIndiana as the winner of its2003 Competitiveness Award.
The magazinea publicationfor CEOs, corporate real estateexecutives and others workingin developmentpresents theaward on the basis of 10 criteriathat measure business expansionactivity in the previous year.
Indiana restructured its busi-ness tax system in recent years.That effort has been credited
with making the state a moreattractive place in which to make
investments
and create jobs.In 2002, the gross
receipts and inventorytaxes were eliminated, andthe research and developmenttax credit was increased from5 percent to 10 percent.
In 2003, the state made stridesin job creation by investing $75
million in Indianas 21st CenturyResearch and Technology Fund,creating a venture capital taxcredit and funding for certifiedtechnology parks.
Four of the top 10 states listedin Site Selection as being compet-itiveIndiana (1), Kentucky (2),Illinois (4) and Tennessee (10)are in the Eighth District of the
Federal Reserve Bank of St. Louis.The criteria used to judge
states come from Conway DataInc.s proprietary New Plantdatabase, which tracks new andexpanding corporate facilities.
New Illinois Laws Target
Fraudulent Practices
The state of Illinois recentlystruck a blow on fraud with fourpieces of legislation to combatidentify theft, deceptive practicesby lenders making reverse mort-gages, deceptive credit counsel-ing by debt management servicesand gift certificate fraud.
Amendments to the ConsumerFraud and Deceptive Business
Practices Act curtail unnecessarydissemination of Social Security
numbers. The amendmentsmake it illegal to publicly dis-play an individuals SocialSecurity number; to print thenumber on cards needed toaccess services and on materialsthat are mailed to the individ-
ual, with various exceptions;and to require an individualto transmit a Social Securitynumber over the Internet.
House Bill 5197 is new legis-lation to help protect senior citi-zens from lenders who offerreverse mortgages in bad faith.The law takes the principlesdeveloped in the Illinois High
Risk Home Loan Act and appliesthem to reverse mortgage lenders.
An amendment to the DebtManagement Services Act pro-tects consumers from deceptivecredit counseling services. Thelaw targets debt managementcompanies that abuse con-sumers by not performing debt
management services and bycharging excessive fees.Senate Bill 2901 requires retail-
ers to provide written noticesregarding fees, charges and expi-ration dates attached to gift cards.
For more information, visit theIllinois attorney generals website at www.ag.state.il.us, theIllinois Public Safety web site
at www.illinois.gov/safety or theDivision of Financial Institutions
web site at www.state.il.us/dfi/default2.htm.
Resource Helps Indianas
Agriculture Entrepreneurs
Working under contract to theIndiana Office of the Commis-
sioner of Agriculture, the South-ern Indiana Rural DevelopmentProject (SIRDP) has begun workon the Indiana Alternative Agri-culture Directory. The directorywill be a resource for agricultureentrepreneurs and communitiessearching for new income-pro-ducing activities.
The directory will include list-
ings of successful alternative ven-tures as well as case studies of50 enterprises that hold promisefor Indiana farmers in transition.
SIRDP, a nonprofit organization,is working in partnership withmany organizations to developthese materials, including PurdueUniversitys New Ventures Team,
county extension offices andother agricultural organizations.SIRDP anticipates completion
of the Alternative AgricultureDirectory by late 2004.
For more information or tofind out how to nominate a suc-cessful agricultural entrepreneurfor inclusion, contact EllenCowell at SIRDP by e-mail at
[email protected] or by phoneat 1-800-816-0019.
The region served by the Federal Reserve Bank of
St. Louis encompasses all of Arkansas and parts of Illinois,
Indiana, Kentucky, Mississippi , Missouri and Tennessee.
SPANNING THE REGION
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Credit Bureau Takes New Approach
to Building Credit HistoriesA new national credit bureau is
helping consumers who do not have
mortgages or credit cards build credit
histories based on other types of pay-
ments. The credit bureaucalled Pay
Rent, Build Credit (PRBC)has devel-
oped 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
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 consumers consent, would
automatically report payments to the
PRBC Data Network. For more informa-
tion, visit www.payrentbuildcredit.com.
Main Street Sets Deadline
for 2005 Awards ProgramThe Main Street National Trust for
Historic Preservation is accepting nomi-
nations for its 2005 awards program
until Nov. 4. The national trust is also
accepting applications for its certifica-
tion program for professionals.
The Great American Main Street
Awards recognize communities that
have made significant achievements in
revitalizing their commercial districts
while keeping focused on historic
preservation. Winners will receive
$2,500, a trophy and national recog-
nition. 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, individu-
als, elected officials, government agen-
cies 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.
To learn more about the nomina-
tion 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 credentialsprogram. 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.
HEARDHave you
Get Checking, a program forformer or current bank customerswho have had problems manag-ing their checking accounts, will
be the topic of a Nov. 4 meetingfor bankers who work in St. Louiscity and county and Jeffersonand St. Charles counties. TheUniversity of Missouri Outreach& Extension and the FederalReserve Bank of St. Louis aresponsoring the meeting.
This innovative program
teaches consumers how to man-age checking accounts and howto reestablish their relationshipwith a bank by cleaning up theirChexSystems report.
Financial institutions canhelp bring Get Checking tothe St. Louis area by providing
funding. They can also workwith local educators and GetChecking national partners topromote the program.
Graduates of the programreceive a certificate they can use
at participating financial institu-tions to open a new account,reestablish a relationship withthe financial institution and
restore their credit.The benefits of the program
are two-fold. Graduates under-stand solid banking basics andhave skills to manage theiraccounts. Financial institutions
benefit by enhancing their rela-tionships in the community,creating new partnerships,increasing marketing and com-munity reinvestment initiativesincluding receiving service testcredit for CRAand givingtheir new customers a chanceto Get Checking.
For more information aboutthe Nov. 4 meeting at the FederalReserve Bank of St. Louis or to reg-ister, call Jean Morisseau-Kuni at(314) 444-8646.
Get Checking
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Metropolitan Statistical Areas: New
Standards and Their Impact on Selected
Federal ProgramsThe General Accounting
Office recently released a report on new
standards for federal statistical recognition
of metropolitan areas. The standards,
announced in 2000, include a new desig-
nation: micropolitan statistical areas, which
applies to less populated areas. To read
the report, go to www.gao.gov/cgi-bin/
getrpt?GAO-04-758.
SimIndianaThis is a suite of desktop
productivity applications that recently has
been made available to Indiana residents
for personal, academic, business or com-
munity use. The product list includes famil-
iar applications such as word processing,
spreadsheets, e-mail, address books,
notebooks, calendars and a file explorer.
What sets SimIndiana apart is that the
software is provided by the state of Indiana
at no charge. The only requirement is
that users sign up with a valid Indiana
address. For more information, visit
www.simindiana.com.
2004 State of the Nations Housing
Harvard Universitys Joint Center for
Housing Studies released its report this
summer. The center predicts that the hous-
ing industry will experience another strong
decade, with women, minorities and immi-
grants playing a larger role in housing
markets. The report is available at
www.jchs.harvard.edu.
Tennessee Economic Development
GuideThe guide provides an overview of
Tennessees economic accomplishments
each year. This year, the guide includes an
update on the states growing technology
fields and automotive industry. It also
looks at the states support for entrepre-
neurs. To find out more, visit
www.tnedg.com or call Dawn Rutledge
Jones at (615) 253-1760.
Dinero HispanoA new web site presents
personal financial education in Spanish.
The site was developed by the InCharge
Institute of America, a national nonprofit
organization. The web address is
www.dinerohispano.com.
RESOURCES
Bridges is a publication of the CommunityAffairs department of the Federal ReserveBank of St. Louis. It is intended to informbankers, community development organi-zations, representatives of state and localgovernment agencies and others in the
Eighth District about current issues andinitiatives in community and economicdevelopment. The Eighth District includesthe state of Arkansas and parts of Illinois,Indiana, Kentucky, Mississippi, Missouriand Tennessee.
Contributors:
Glenda Wilson
Community Affairs OfficerManaging Editor(314) 444-8317
Linda FischerEditor(314) 444-8979
Community Affairs staff
St. Louis: Matthew Ashby(314) 444-8891Jean Morisseau-Kuni(314) 444-8646
Memphis: Ellen Eubank(901) 579-2421
Dena Owens(901) 579-4103
Little Rock: Lyn Haralson(501) 324-8240Amy Simpkins(501) 324-8268
Louisville: Faith WeeklyLisa Locke(502) 568-9216
The views expressed in Bridges are notnecessarily those of the Federal ReserveBank of St. Louis or the Federal ReserveSystem. Material herein may be reprintedor abstracted as long as Bridges is credited.Please provide the editor with a copy ofany reprinted articles.
If you have an interesting communitydevelopment program or idea for an article,we would like to hear from you. Pleasecontact the editor.
Free subscriptions and additional copiesare available by calling (314) 444-8761 or
by e-mail to [email protected].
BRIDGES
11O N T H E I N T E R N E T A T W W W . S T L O U I S F E D . O R G
DECEMBER JANUARY
Growth Through Change: Meeting the
Challenge TogetherChicago
Sponsor: National Community
Capital Association
www.communitycapital.org
(215) 923-4754
Roundtable on CRAErie, Pa.
Sponsor: Federal Reserve Bank of Cleveland
(412) 261-7947 or 1-800-433-1035
Housing Finance InstituteBoston
Sponsor: Fannie Mae
www.efanniemae.com/learning_center
1-800-243-5478
Entrepreneurs and Money...Getting
TogetherSt. Louis
Sponsor: Missouri Venture Forum(314) 241-2683
Consequences of the Consumer
Lending RevolutionSt. 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
NeighborWorks Training
InstituteNew Orleans
Sponsor: Neighborhood Reinvestment Corp.
www.nw.org/training
1-800-438-5547
Cooperating to Develop Communities:
Urban Rural ConnectionsSt. Louis
Sponsor: Missouri Community
Development Society
www.mocds.org
4th Annual New Partners for Smart Growth:
Building Safe, Healthy and Livable
CommunitiesMiami Beach, Fla.
Sponsors: Local Government Commission
and Penn State
www.NewPartners.org
(814) 863-5100
3-6
NOVEMBER
CALENDAR
5
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13-17
15-18
16
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