2021 CSBS Community Bank Case Study Competition Journal

THIRD PLACE: Southeastern Louisiana University customers. They consistently seek to convert high rate payday loans to lower rate bank loans that are more manageable. The African- American community has been plagued historically with predatory loans. Seen in figure 7, the average interest rate Liberty charges may 3.86% 4.05% 4.31% 4.34% 3.59% 4.25% 4.34% 4.57% 4.60% 4.08% 3.81% 3.97% 4.21% 4.43% 3.88% 3.40% 3.90% 4.40% 4.90% 12.92% Minority Banks Liberty Bank Majority Banks 2016 2017 2018 2019 2020 Figure 7: Interest Income as % of Average Total Assets

be higher than peers to offset higher credit risks, but when a customer converts payday loans

In 2019, Liberty and JPMorgan Chase partnered to expand the BuildNOLA Mobilization Fund, a program that provides capital to entrepreneurs of color and women pursuing public infrastructure projects with the goal of creating more jobs to grow the New Orleans economy. The New Corp CDFI and the City of New Orleans, with support from The Kresge Foundation and the Greater New Orleans Foundation, co-created The BuildNOLA Mobilization Fund. Liberty participated in the now paid-off TARP funds during the financial crises, which directed capital towards the New Orleans community that had recently been hit by Katrina. “This additional capital will benefit all communities that Liberty serves and enhance our capacity to support the revitalization of the area we cover that has been struck by four destructive hurricanes in the last three years” McDonald said. But again, Liberty’s mission is a culture— not a program. Liberty also has partnering efforts from NewCorp, a non-profit organization, in the Build New Orleans program whereby loans

into a Liberty loan, they save vast amounts of interest. Mr. McDonald spoke passionately about Liberty’s goal of saving customers from predatory loans saying, “When they (customers) borrow money at a reasonable interest rate, their availability and their discretionary income increases without getting another job. What we see is different ways of taking the banking system and converting it to helping people on a grand scale.”. These savings can be reallocated to better the customer’s standard of living. It’s a daily push to fulfill their mission—Not a program—Not a single product—A mission. In Gentilly, LA, Liberty intervened with the financing of a nine-mile Katrina-flooded community. Liberty led the origination of dozens of mortgages originally projected for 10-years or less. Now, they are being converted into 30-year traditional mortgages, so homeownership can be sustained in what would otherwise be abandoned neighborhoods. This initiative was so successful that it was also expanded to other communities in New Orleans.

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