AB- Treasury, Summers, July 9,

July 9, 1999, pgs. 1, 3

Treasury Urges that Big Banks Be Inner-City Business
Tutors

By JOSHUA BROCKMAN

The Clinton administration's push to promote
inner-city businesses took a new turn Thursday as the
secretary of the Treasury called on large financial
institutions to serve as mentors to their smaller
counterparts and customers.

Lawrence H. Summers, in one of his first public
appearances since assuming his post July 2, applauded
the willingness of lenders to finance community
development, but said more steps are needed.

"This is about much, much more than money," he
said. He maintained that banks can and should play a
leadership role by providing advice to smaller
businesses and creating networking forums for them.

Mr. Summers made his remarks at a roundtable
discussion in New York involving more than 20 business
and financial leaders and entrepreneurs. The event was
hosted by Chase Manhattan Corp., whose community
development initiatives-which Mr. Summers viewed
earlier in the day during a tour of Harlem-were touted
as models of a private-sector business mentoring
program.

By calling on banks to provide technical support
for community development, Mr. Summers appeared
to be raising the ante for some lenders.

The mentoring approach Mr. Summers described
is "a reflection of what some of the cutting edge
financial institutions are already doing," said
Judith A. Kennedy, president of the National
Association of Affordable Housing Lenders.

While bankers said they are already providing
much technical assistance to communities, there were
calls for more to be done.

Deborah Wright, president and chief executive
officer of Carver Federal Savings Bank, said that
while New York communities are on the rebound,
"the sad fact is that we are not prepared to take
advantage of that opportunity." The bank isn't
financially constrained, she said; rather, it needs
more expert advice and guidance.

Mr. Summers' trip to New York was part of
President Clinton's "New Markets Initiative" campaign
to create private sector investment for businesses in
low- and moderate-income rural and urban areas.

Ms. Wright was one of several members of
BusinessLINC-a mentoring program formed last year
under the auspices of the Treasury Department and
the Small Business Administration-who participated in
the roundtable.

Others on the high-powered roster included Henry
R. Kravis, founding partner of Kohlberg Kravis Roberts
& Co.; Lawrence Toal, chairman and chief executive
officer of Dime Savings Bank; William Rhodes, vice
chairman of Citigroup; and Mark Willis, senior vice
president of Chase Bank.

William Harrison, president and CEO of Chase
Manhattan Corp., said Chase is engaged in "reaching
out for the untapped market potential that lies in
our urban areas." Chase provided the financing for the
project Mr. Summers toured in the morning-Harlem USA,
the New York City neighborhood's first large-scale
retail development in two decades.

Mr. Summers said the new facilities in Harlem
will change the landscape and will bring New York City
$200 million in retail income and $517 million in city
sales taxes.

William McDonough, president of the Federal
Reserve Bank of New York, encouraged Congress to
enhance the Community Reinvestment Act to help
with community development. Access to capital for
important community projects and for the economy as a
whole, coupled with mentoring for entrepreneurs will
help bolster the New York economy, he said.