Concerns include the bank’s backing out of a public commitment to Minnesota’s Somali community and ongoing racial redlining practices
ST. PAUL (April 15, 2014) — A delegation of Minnesotans traveled to Kansas City this morning to attend U.S. Bank’s annual shareholder’s meeting. The group includes representatives from Minnesota’s Somali community and clergy concerned about discriminatory lending practices uncovered by a recent report released last week by the University of Minnesota Law School.
Last week, U.S. Bank officials informed representatives of Minneapolis-based Dahabshiil, a Money Service Business (MSB) that serves the Somali community, that it would not conduct remittances to Somalia. The bank’s decision reverses a public commitment made one year ago at its shareholder’s meeting in Boise, Idaho.
Community leaders and members of Minnesota’s congressional delegation applauded the bank’s decision as an important step in an ongoing, 28-month-long humanitarian crisis. At the time, U.S. Bank officials also publicly shared in the excitement. “Over the past year, we’ve worked very closely with remitters seeking to send money to Somalia,” Nicole Garrison-Sprenger, a U.S. Bancorp spokeswoman, said in an email to reporters in April of 2013. “We are pleased that we may have recently found a solution with one remitter in Minneapolis,” she continued.
In the year since, representatives from Dahabshiil have invested significant resources in meeting and exceeding compliance demands placed by the bank, acting in good faith. The move by U.S. Bank to back out of the agreement follows more than two years of efforts by Somali Minnesotans to restore the critical lifeline to their families, many of whom depend on the funds to meet the basic necessities of everyday life. Community leaders have met with U.S. Bank officials many times since the last Minnesota bank ceased conducting the transactions. Such a meeting took place just two weeks ago.
“On behalf of our community, I am very disappointed by this decision to back out of our agreement,” said Mohamed Nor of Dahabshiil. “An urgent need remains and it is clear that U.S. Bank has no desire to be a partner in alleviating the suffering of our people.”
Minnesotans traveling to Kansas City will also bring concerns revealed in a report released last week by the University of Minnesota Law School showing that communities of color continue to be denied access to credit. U.S. Bank, along with Twin Cities mortgage industry leader Wells Fargo, have a long history of offering toxic subprime loans, which contributed to the foreclosure crisis and the staggering drops in housing values that disproportionately affected people of color, stripping many moderate- and low-income communities of enormous amounts of housing wealth.
According to the report, “Twin Cities in Crisis: Unequal Treatment of Communities of Color in Mortgage Lending,” U.S. Bank is responsible for the second largest shortfall of lending in predominantly minority neighborhoods, such as North Minneapolis and the East side of St. Paul.
“We are here to call on U.S. Bank to take proactive steps to make our communities—targeted for toxic loans, then stripped of their wealth, and now denied credit—whole again,” said Pastor Trudy Cretsinger, who is attending the shareholder’s meeting, representing ISAIAH. “We need structural solutions to break this cycle of financial predation and starvation, and we expect more of U.S. Bank.”