Augusta City Administrator Odie Donald has released an ambitious plan to aid residents in acquiring bank accounts as well as home and small business loans.
Donald made a presentation to the Administrative Services Committee on Nov. 30 that outlined his proposed small business and affordable home plan that he said was needed due to the pandemic. Donald began his presentation by conceding that “many of the responsibilities are outside of government.”
Cadence Bank was identified as a potential private sector partner.
“We are looking at a proposed program that will help us bring more people into the banking system which, of course, would lead to access to capital for small business as well as home ownership and teaching people about investments and building wealth,” Donald told commissioners.
According to Donald, the plan is to identify residents who don’t have access to banking and provide them with a financial literacy program to “enhance IQ.” The city, likely through Cadence Bank, would then provide applicants with access to a checking account with no monthly fees and no minimum deposit. The applicant would also receive a debit card and be given access to online banking.
The next phase of the plan would be to offer participants quarterly classes if they are potential first-time home buyers. The literacy program would teach them the steps for pre-qualifications, how to build wealth and then pair them with a partnering mortgage specialist to provide competitive mortgage rates.
For continued wealth building strategies, Donald’s program would give participants access to their own personal financial planner so that they can learn more about CDs, money market products as well as high yield products for mid- and long-term investing.
According to Donald, his plan would also aid participants who want to create their own small businesses by establishing goals and strategies so they can become “loan ready.” The program would then provide them with 100 percent financing with a competitive fixed rate and no origination fees.
To qualify, applicants would have to maintain a Fair Isaac Corporation (FICO) score of 640, maintain an escrow account for taxes and insurance, plan to live or place their business in a low or moderate income area, as determined by Cadence Bank, and have an income that is 80 percent less than the median income of that particular area.
According to Donald, his plan is modeled after a similar program conducted in Fulton County where the county made an initial $10 million investment in two minority-owned banks. Donald’s proposal quoted business and civic leaders in Fulton County celebrating the pairing of government and banking.
“I’m thrilled to be here today with these big checks and an even bigger commitment to helping minority banks thrive,” Fulton County Chairman Robb Pitts is quoted as saying in Donald’s presentation.
Fulton County used American Rescue Plan Act funding; however, Donald did not identify a funding source for his plan locally.
Not everyone on the commission was pleased with Donald’s ambitious plan or the timing of the presentation. District 8 Commissioner Brandon Garrett said he felt broadsided by the presentation as he and other commissioners did not know that Donald was approaching local banks to become involved in the proposed program.
“There are federal and state programs that already do a lot of that, the Housing and Development Department already does a lot of that. It just seems like a duplication of services to me,” Garrett said.
Although Donald began his presentation by stating that the commission did not need to act at the time, the Administrative Services Committee did vote to allow program funding to kick start the proposal.
The matter will go before the full commission on Tuesday, Dec. 7; however the item is on the consent agenda, meaning that it could potentially pass with no public discussion.
