The Fed s Bad Credit Report By Carl Vogel Activists are disappointed with the new CRA small business loan database. Still, they re finding ways to bring more credit to poor neighborhoods. Hiciano had to go to loan sharks for capital to start his video production company in Washington Heights several years ago because he couldn t get a conventional loan. Loan sharking in Washington Heights is a booming business, and they charge up to 5 percent interest per week, says Mark Levine, president of the Neighborhood Trust Federal Credit Union, which serves this uptown Manhattan neighborhood. Now, Hiciano is building his credit rating as he makes payments to Neighborhood Trust and he hasn t missed one yet.
Small businesses are the unsung driving force of New York City s economy.
According to City Comptroller Alan Hevesi s office, small firms those with fewer than 500 employees have added more than four times as many jobs citywide as larger companies since 1993. In Brooklyn, which suffered from an 11.1 percent unemployment rate in 1997, small firms have added nearly 12,000 jobs over the last four years, while large firms lost 4,500 positions. Getting a start-up or expansion loan can be critical for a company s survival, and community financiers such as Levine work hard to provide capital in otherwise disinvested neighborhoods. Without adequate data, it hasn t been easy for them to gauge if New York s traditional banks redline businesses in poor neighborhoods, however. But neighborhood activists aren t jumping out of their chairs to get hold of the new database.