Cross-posted from TheGrio
The NAACP agreed to end our lawsuit against Wells Fargo because we successfully negotiated an agreement that improves their practices and increases their transparency in ways that go far beyond what we could win in court. (Click here to read the NAACP's Countering Lending Discrimination Report.)
Wells Fargo's signature on our banking principles - with measures to hold the bank accountable -implement practices that guarantee: (a.) full disclosure of rates, (b.) borrowers will only be offered products they can understand and afford, (c.) no consumer will be targeted based on zip codes and race, and (d.) diversity amongst their suppliers and employees.
Most importantly, the extra transparency allows us to ensure accountability and that the principles are being followed.
Our lawsuit was not brought for monetary damages but to transform the way the industry profits going forward. Our goal is to compel banks to put in place practices that are in the best financial interests of regular folks.
It does not interfere with but complements lawsuits brought by cities which are largely for remunerative damages.
Next, we plan to return to systematically pursuing payday lenders like those we and our allies at the Center for Responsible Lending outlawed in Ohio and Arizona in 2008 where lenders were charging people interest rates of 400 percent. We are committed to reforming exploitative institutions that unjustly increase the price of being poor.
Wells Fargo also agreed to partner with the NAACP to help bring other banks to the negotiating table. The goal is to get them to sign on to our fair mortgage lending principles and create an aggressive financial empowerment initiative that will help us ensure homeowners get the help they need, small business owners get increased access to credit, and the rising generation of consumers learns how to save and build real wealth the way many of our elders who survived the depression have done.
We are optimistic about the pace of negotiations with many of the other banks and expect to be able to make the announcement about this multi-year campaign at our national convention this July.
Last year, we were in a very different place. I had just started and we were struggling to figure out what to do with a lawsuit that was brought well before the recession to change the banks' behaviors in ways that could have empowered the country to help prevent it. Because the recession had since started too, we needed a victory as quickly as possible in order to help keep the crisis from getting worse.
We decided to expand the lawsuit and I authorized the NAACP Legal Department to add Wells Fargo to our lawsuit against more than a dozen banks. We did so because it was the right thing to do.
It was not without a price. Just before I did so, I informed our board that we would need to revise down our corporate revenue projections because we would be bringing lawsuits against corporate supporters, had already joined another legal action against a third, and would be actively supporting the Employee Free Choice Act. The latter would make it easier to major U.S. retailers.
Upon hearing the news of our support for EFCA, one of the nation's largest retailers said they would have to stop supporting us. "We're nice, but we're Minnesota nice," their rep informed me. "We just don't know how to fight with our friends."
Wells Fargo stopped supporting our national events shortly after we announced the suit.
At most nonprofits, for a CEO to stand in front of the board who just hired him in the midst of an accelerating global recession , delivering such news would be risky.
The NAACP is different. Our board was more than ready to be supportive. At the NAACP, taking such risks is exactly what's expected.
You see, we're nice too. But we're Southern nice. We fight for our principles, even with our friends, then find a better way, and keep on moving.
I learned this way of advancing justice from Charles Wesley Tisdale, the late publisher of the Jackson Advocate Newspaper in Jackson, MS. He was also a long-time NAACP member whose writing hand was permanently bent from injuries suffered as a teenager when vandals attacked him for founding a NAACP youth chapter in Northern Alabama. (As I write this blog, I am on my way back to Jackson to dedicate a library in his honor.)
Trained by Richard Wright among others, Mr. Tisdale was among the feistiest journalists in America. His paper was firebombed three times as a result. (The last bombing was just twelve years ago.). The reporters were often threatened and even physically attacked by thugs.
Working in that newsroom forced you to choose. Either you committed to fight the good fight come what may, or you left quickly. You also learned that you had to prepare for battle.
Checking facts comes first. Informing the board of the likely cost was the second part of the process. Diversifying our revenue streams by pursuing new members, individual donors and progressive foundation partners was already under way and would need to be accelerated too.
It is this part of the strategy that has allowed the NAACP to grow in membership and revenues throughout this recession and these ongoing legal and legislative battles. At the Jackson Advocate we tried to do similarly. We always redoubled efforts to sell classified and church ads when we took on the interests of our advertisers. In this way, fighting the good fight should always make you stronger.
Mr. Tisdale was also very clear that once started, the goal of the fight was to end it on our terms as quickly as possible and in order to do so we had to look for allies on the other side.
This starts by picking up the phone. In addition to expanding the lawsuit, we also accelerated the pace of negotiations. In Wells, our newest litigant, we found a willing partner who had already made some changes and was willing to make more.
By practicing this formula, we at the Advocate won battles with some of our biggest advertisers, and always advanced the cause of our readers.
This agreement is an important step in a much larger struggle to reform our financial system. Our lawsuits are both a complement to other legal strategies, and a robust legislative agenda.
With the Wells agreement, as with the 2008 victories in Ohio and Arizona against payday lenders, we have won big victories. There are more to be won and we will not give up until we win them just as we have won these.
We understand, Mr. Boyce. We know you're an ally and a friend of the NAACP and our cause of justice. We know some people just don't believe anyone will hold their supporters accountable, even though we have done so for a century.
Next time, please pick up the phone before you blog and I'll do my best to make sure I or someone just as knowlegeable answers your questions promptly.