On August 14, 2002, Federal Reserve Governor Susan Schmidt Bies
began her first official visit to the Ninth District with a community
development tour of two inner-city neighborhoods in St. Paul. The
tour, which was coordinated by Community Affairs and conducted by
University Bank President David Reiling, demonstrated the positive
impact of community development lending in urban neighborhoods.
The tour started at University Bank in St. Paul's Summit-University
Neighborhood, where Reiling discussed the institution's history,
mission, accomplishments and goals. He emphasized the bank's community
development focus and described some of its products and services.
(For more information on University Bank, see the sidebar below).
Reiling's presentation was followed by a question-and-answer discussion
with Governor Bies and other tour participants, including Federal
Reserve Bank of Minneapolis President Gary Stern, Senior Vice President
Niel Willardson, former Vice President and Community Affairs Officer
Julie Stackhouse and members of Community Affairs.
Following the meeting, participants visited a number of sites in
St. Paul's Summit-University and Thomas-Dale neighborhoods that
underwent successful rehabilitation with the help of University
Bank loans. Tour highlights included:
- A variety of formerly neglected or abandoned commercial buildings
that now house thriving small businesses. One of these rescued
properties, the Hmong ABC building, is home to the first Hmong
bookstore in the United States.
- Several formerly crime-ridden residential properties that were
rehabilitated and sold to low- and moderate-income families; and
- The New Spirit Middle School, a once-abandoned building that
now houses part of a Minnesota charter school.
University Bank works to improve its urban community
University Bank is a $68 million financial institution serving
the diverse, economically distressed communities of St. Paul's
urban core. The bank labels itself "The leader in improving
our urban community" and offers a number of products
and services that are designed to help inner-city neighborhoods.
Nearly 80 percent of its loans go to low- and moderate-income
areas of St. Paul.
In 2001, University Bank strengthened its position as a community
development lender when it became the first full-service financial
institution in Minnesota to be designated as a Community Development
Financial Institution (CDFI) by the U.S. Department of the
Treasury's CDFI Fund. CDFIs are community-based nonprofit
or for-profit financing institutions that have a primary mission
of community development and meet certain other criteria outlined
by the CDFI Fund.
In the same year, University Bank was awarded $750,000 in
low-cost, debt-like equity through the CDFI Fund's Core Award
program, which provides financial assistance to CDFIs to increase
their capacity to lend money in economically distressed neighborhoods.
The award was matched with a debt-like equity loan from M&I
Bank to University Bank, resulting in a total of $1.5 million
in debt-like equity that could support approximately $20 million
in asset growth.
For more information on University Bank, visit www.universitybank.com.
"We were delighted to have Governor Bies and President Stern
tour our community and see what a bank with a community development
mission can accomplish. Describing how the bank and the community
have benefited through their investments in each other reinforces
our belief that you can 'Do well and do good.'"—David Reiling,
president, University Bank
"It was a pleasure to visit St. Paul and learn about the innovative
program that University Bank has undertaken. The tour underscored
the important role that community banks can play in revitalizing
urban neighborhoods."—Federal Reserve Governor Susan Schmidt