Editor’s Note: Alessandro DiNello is the president and CEO of Flagstar Bank. He was one of three speakers at The PuLSE Institute’s inaugural CEO Forum on Poverty Series held March 11 at the Westin Book Cadillac Hotel in downtown Detroit. For submission inquiries contact the Institute’s editor-in-chief Bankole Thompson at email@example.com
By Alessandro DiNello
I’m not an academic who studies poverty nor am I a social worker who is in the trenches with it in my daily work, but like former Supreme Court Justice Potter Stewart and his famous quote on pornography, I know it when I see it.
Great minds have been trying to “solve” poverty for a very long time. It’s tough because the definition itself is squishy. A quick Google of “poverty” turns up headlines like “The official poverty rate is based on what people ate in 1955.”
Is poverty homelessness? Is it being cold and hungry? What about being depressed, or sick and unable to afford healthcare? Many would argue it’s all these things and more. But I do know it when I see it, and you probably do too.
As the head of an $18.5 billion-dollar bank headquartered in Michigan, I take Flagstar’s responsibility to the community very seriously. Like many other banks, Flagstar takes deposits from the people who live in our communities, and meeting their credit needs, especially those of low to moderate income borrowers, is not just a regulatory obligation, it’s the right thing to do.
So things like affordable housing, affordable and accessible banking, and responsible, yet flexible lending are stock-in-trade for banks. And that puts banks in a position not just to mitigate these offshoots of poverty, but also to be impacted by them.
You often hear the words “poverty and homelessness” in the same sentence. As a leading home lender with a national reach, Flagstar is all-in when it comes to affordable housing. We work hard to create homeowners, but so do other banks, corporations, and nonprofits in metro Detroit. Our community is blessed in this regard.
So why is the poverty rate in Detroit so inexorably high? At the recent launch of the CEO Forum on Poverty Series organized by The PuLSE Institute, Jerry Norcia, president and COO of DTE Energy, Cindy Pasky, president and CEO of Strategic Staffing Solutions, and I looked for some answers. Here are some of our conclusions:
- There is no absence of resources—nor a lack of will—to fight poverty, but there does seem to be an absence of coordination. Everyone’s heart is in the right place, but we shouldn’t duplicate efforts, create the right program for the wrong neighborhood, or do something that someone else could do better.
- We can’t assume that our company or organization knows what’s best for the community. Ask the community what’s best for them. This is what we are doing in Pontiac where Flagstar is investing $10 million over five years to help revitalize the city, and it’s a cornerstone of the recently announced $35 million investment by Flagstar and six corporate partners in clusters of neighborhoods in Detroit.
- We won’t know if we’re successful if we don’t benchmark. It’s what business does—rigorously and relentlessly. We need to bring more of that discipline to our community investments. And that includes more accountability—not just for how we as a company spend resources, but also how the beneficiaries of our spending use those resources. We both need to be good caretakers.
The forum raised the question about whether CEOs are in a position to know anything about poverty. I can speak from my own experience that business is not immune to poverty and its many manifestations. We know that at times customers may not completely understand financial concepts- and at Flagstar we work hard to educate consumers on financial literacy. But the effects of financial illiteracy can take a toll on our customers and the community as a whole- no one is immune. So yes, business has skin in the game. So do we all.
For more information on The PuLSE Institute CEO Forum on Poverty Series visithttps://thepulseinstitute.org/2019/03/31/pulse-institute-next-ceo-forum-on-poverty-set-for-june-10/