At the SRI in the Rockies Conference several weeks ago, I attended a session about the mortgage crisis - specifically, how it will negatively impact low-income communities. Sadly, several panelists said that the progress of Community Development Financial Institutions (CDFIs) over the last 10 years is in danger of being erased. CDFI’s are financial institutions such as banks or credit unions that provide responsible and helpful financial services to primarily low-income and minority neighborhoods. CDFI’s have remained in strong shape despite the financial crisis, due to their high lending standards and the genuine care given to the customers they serve.

Of particular interest to me was panelist David Buchholz, a senior policy analyst with the Federal Reserve Board of Governors. According to Buchholz, the most proximate cause of the mortgage crisis was the gradual erosion, then complete abandonment of traditional underwriting standards in 2005. Through expansive government deregulation and lax enforcement of remaining rules, banks and other finance companies were able to originate loans that were built to fail, collect fees on them, and bundle them together to sell to anyone in the marketplace.

Buchholz was on a Fed committee that, over the summer, had to re-establish the rule that “the lender must asses the repayment ability of the borrower” - supposedly THE fundamental principle in the lending industry, yet a concept that had been abandoned in the quest for short term profit through something-for-nothing finance schemes.

In 2007, MMA co-filed a resolution on executive compensation at Cisco Systems. This Say-on-Pay resolution, if enacted, would have allowed shareholders an advisory vote each year on the compensation plan for top executives. The resolution received 48% of the vote – an unusually high percentage – but it did not translate into the establishment of an advisory vote for shareholders.

One of the points shareholders made to Cisco in support of the resolution is as follows:

“As faith-based shareholders, we believe that it is our responsibility to bring more visibility and accountability to the issue of executive compensation as practiced by companies in which we hold stock. We are concerned that an unchecked and growing concentration of wealth and privilege in corporate America does not promote the common good, economically, ecologically, socially, or politically.”

As socially-concerned shareholders looked to file the resolution again this year, Cisco offered an alternative five point plan that sought to address the concerns of shareholders while keeping the resolution off the company’s ballot. The main idea of Cisco’s plan was that its board of directors would study the issue over six months, allow proponents of Say-on-Pay to join in a discussion on the subject during the next board meeting, then announce its decision, for or against, along with its rationale.

After deliberation, shareholders decided to accept Cisco’s plan – with a few modifications – and proceeded to withdraw this year’s resolution.