President Obama participates in one of the breakout sessions at the Forum on Jobs and Economic Growth at the Eisenhower Executive Office Building in Washington, D.C. last week (Dec. 3). (White House Photo, Pete Souza)

Jesse Turner Jr. had not participated in anything quite like this: a White House Forum on Jobs and Economic Growth.

Yet, here was the President of Tri-State Bank in Memphis seated in the second row listening to Vice President Joe Biden and President Barack Obama. Later, he would be flanked by the chairman of American Airlines and exchanging with Secretary of the Treasury Timothy Geithner during a breakout session with other forum participants.

Tri-State Bank President Jesse Turner Jr. tells Tri-State Defender Executive Editor Karanja A. Ajanaku about the suggestions he put on the floor during last week’s White House Forum on Jobs and Economic Growth in Washington, D.C. (Photo by Angelique Gray)

The forum unfolded last Thursday (Dec. 3) in the Eisenhower Executive Office Building as the October unemployment rate came in at 10 percent, down from 10.2 percent. While the drop was the first since July and bolstered economic recovery hopes, it comes as the administration faces mounting pressure – including from some of its allies – about joblessness.

“I think there is some real receptiveness (from the administration) in at least trying to ask people from around the country what they think,” said Turner. “I think they got some good ideas and I’m hoping that they will look at them. The ones we put on the table may not be acted on, but I’m thankful for having the opportunity to be able to share some things with them.”

Turner said he specifically suggested three things:

That the remaining Recovery Act funds be loaned out additionally to community banks and minority banks, particularly those that are community development financing institutions. He recommended that the funds be priced better since they essentially function as loans that the banks have to pay back at a dividend of five percent a year paid quarterly.

Bringing back the low-doc program that enables a business to apply for a loan, have a very quick turnaround and “not have to a degree in finance in order to fill the application out.”

That some consideration be given to relaxing FDIC regulations governing collateral and loans.

Tri-State Bank was one three banks in the mix of approximately 130 attendees that included small business owners, experts from the green jobs sector, business leaders, academics, mayors and representatives from nonprofits. The administration sought recommendations on participants from the American Bankers Association, of which Tri-State Bank has been a member for many years.

 All of the banks were community development financial institutions (CDFI), which have a goal of serving specified communities and are certified by the government. In the case of Tri-State Bank, that’s the African-American community. The certification opens the door to a host of funding for lending, loan loss reserves, technical assistance, financial assistance – things you can use to help the community.

“Although we have done development lending and development work for years, we’ve really only been certified for a little bit less than a year,” said Turner. “That’s even a greater honor for the bank to be invited.”

The setting

The invitees were asked to be there by midday on Thursday. Turner was the first to arrive. First, there was about a 20-minute session during which the participants were addressed by Geithner, Biden and then President Obama before the breakout sessions.

Turner landed in a 30-person, small business lending group, which met for about 90 minutes. Geithner chaired the session, assisted by Karen Mills, administrator of the Small Business Administration.

The common theme among the small businesses was that they were having trouble getting loans.

“This one African-American, who was the head of a film company, indicated that his gross revenues were in the range of $1 million. He said his loans were up to date, he paid them on time, yet the value of his collateral dropped and as result he was told he had to reduce his loan. And actually he was trying to borrow more money and can’t get a loan,” said Turner.

During the session, Geithner pointed out that there is a new government funding program to provide capital that can be obtained, if a bank commits to do small business lending. Turner said Tri-State Bank is researching to see if the program is something  they can use.

As for the recommendations, he made, Turner said at Tri-State Bank there have been internal discussions about how good it would be to have the low-doc program again.

“But you know, you are one little bank in the middle of Memphis and is anyone at the SBA really going to listen to your suggestion. I did not go there tending to recommend it, but it did occur to me and I was quite surprised about how well received it was….That idea alone could help businesses tremendously,” he said.

What next?

Geithner and President Obama agreed that a major challenge is how to get the banks to lend money and yet do so in a way that does not put the country at risk from a regulatory standpoint.

“And I think that is the challenge, but we’ve got some great minds in the country and the administration obviously has people that are committed to trying to figure how to make some of this work,” said Turner.

Before the breakout sessions, Turner said President Obama asked anyone with ideas to “bring them up no matter how poorly or half-baked they might seem. I think his idea was to get a lot of ideas on the table and then the staffs of the various agencies would sit down and go to work on them.”

While it did not come up in the small business session, Turner said mortgage lending also has to be a part of the recovery-from-recession equation.

“If we are going to get out of this, our banks are going to have to do some things that maybe we would not otherwise do and try to work with folks that are having some difficulty. That really is what the community bank ought to be about, even more so than banks in general,” said Turner.

“We all have a part to play in this and at Tri-State we are trying hard with the leadership of our board and staff to do what we can to help all of us get out of this crisis.”

The President, Turner said, indicated that he hoped the participants would continue to serve in working groups.

“In our group session there wasn’t time for interaction with each other. If we have working groups, maybe we can get the lenders talking to the business folks and we may find as we hear their stories specifically – not just summary – some more opportunities.”