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CUOMO BEGINS MEETINGS IN SOUTH AFRICA TO DISCUSS WAYS U.S. AND SOUTH AFRICA CAN WORK TOGETHER TO MEET COMMON CHALLENGES
JOHANNESBURG, South Africa - U.S. Housing and Urban Development Secretary Andrew Cuomo began a series of meetings and discussions today with government and business officials in South Africa to discuss ways the two nations can work together to meet common housing and community development challenges.
Cuomo's three-day visit to Johannesburg, Pretoria, Soweto, and Cape Town includes visits to distressed urban and rural communities.
"Working together, our nations and our people can learn from each other and help each other create increased opportunities for all citizens by building more affordable housing, increasing homeownership, creating more jobs, and strengthening our economies," Cuomo said. "The global marketplace and the borderless information superhighway will continue to draw us closer together as trading partners, as fellow democracies and as friends."
Cuomo said he particularly wants to share American expertise in the areas of home financing and construction of affordable housing to help increase the supply of mortgage funds and homeownership in South Africa.
The Secretary's visit is a follow-up to last February's meeting between Vice President Al Gore and South African Deputy President Thabo Mbeki. Gore and Mbeki met at the Fifth Plenary Session of the U.S.-South Africa Bi-National Commission in Cape Town, which they co-chaired. Cuomo is Co-Chair of the Commission's Housing Committee, along with South African Housing Minister Sankie Mthembi-Mahanyele.
Created by President Clinton and South African President Nelson Mandela during Mandela's October 1994 state visit to Washington, DC, the Commission was established to revitalize the bilateral relationship between the United States and South Africa by facilitating cooperation in areas that are key to South Africa's development.
Today Cuomo outlined particular U.S. efforts to increase homeownership and spur economic development activities in low-income communities, during a luncheon hosted by South Africa's Banking Council. He also toured housing in several communities, and spoke to students and faculty at the University of the Witswatersrand.
Those attending the Banking Council luncheon included representatives of the largest South African and U.S. banks in South Africa, as well as Mthembi-Mahanyele, South African Housing Director General Mpumi Nxumalo, Project Gateway Director David Porteus and several business leaders. Project Gateway is working to increase the availability of funds for home mortgage loans in South Africa by creating a secondary market to purchase the mortgages.
In remarks to the Banking Council, Cuomo discussed how extending mortgage credit to low-income families has many short-term and long-term benefits, including helping financial institutions to broaden their base and increase their business, and furthering the concepts of "One America" and "One South Africa" by promoting social and economic justice.
In the United States, businesses locating within Empowerment Zones have accomplished this by taking advantage of tax incentives and government guarantees, utilizing innovative lending techniques, complying with fair housing laws, and adhering to the requirements of the Community Reinvestment Act.
CRA was enacted in 1977 in the United States to address problems of disinvestment and redlining in low- and moderate-income communities. Redlining can be used to deny mortgages and homeowners' insurance to families based on the neighborhoods in which they live. CRA places a continuing, affirmative obligation on banks and thrifts to meet the credit needs of their communities by providing appropriate credit and services.
In 1997, banks and thrifts subject to CRA made 2.6 million loans to small businesses, totaling $159 billion -- two-thirds of all small business loans made that year. More than one-fifth of those loans were made to small businesses in low- and moderate-income communities.
The open forum that Cuomo participated in today at the University of the Witswatersrand included about 200 students and faculty members. Topics included: the important role that local leadership will play in helping South Africa create effective economic development initiatives; the U.S. experience with programs that promote individual and community empowerment and revitalization such as those administered by HUD; and greater collaboration between the United States and South Africa.
Content Archived: January 20, 2009