NCIF invited 10 partner CDFI and Minority Banks to identify small business customers that are integral to their local communities and needed support to sustain their respective businesses through the pandemic. NCIF used over $100,000 of its own funds to pilot an unrestricted microgrant program as gap funding to these customers. Our first batch of microgrants was given to social entrepreneurs, retail businesses, community facilities, affordable housing organizations, arts nonprofits, and other small businesses across the country. These CDBA members are First Southwest Bank, Carver Federal Savings Bank, City First Bank of DC, Community Bank of the Bay, First Eagle Bank, Industrial Bank, Native American Bank, Providence Bank & Trust, Southern Bancorp, and United Bank.
Of the roughly 30 million small businesses in the United States, 22 million are individually operated, meaning the owner is the sole employee, according to the U.S. Chamber of Commerce. There are few concrete numbers for how many of those businesses have permanently closed in the past year, but some early estimates have put the figure anywhere from 80,000 to 160,000. It will likely take years for the full extent of damage from the pandemic to be felt in the broader economy. The pandemic has shaken even the most prepared business owners, and nonwhite business owners have been hit especially hard. If the incoming Biden administration and the banking sector want the country to bounce back from this crisis, there will have to be a renewed focus on how we approach small-business credit in general, and how we foster nonwhite business creation in particular.
The American Dream has evolved just as America has evolved, but today, homeownership has emerged as the primary public policy tool for helping Americans achieve wealth and self-reliance. Nearly two-thirds of the nation's 140 million housing units are owner-occupied, conferring an average net housing wealth to those owners of over $150,000.
This is a statistical way of saying that buying a home is the main way Americans obtain real, tangible wealth. But white Americans today enjoy the equity-building benefits of homeownership at significantly greater rates than nonwhites. In the third quarter of 2020, 46% of Black households owned their own home, compared with 51% of Hispanic households, 61% for Asians and 76% for whites, according to data from the Census Bureau. And that racial gap in homeownership is actually greater today than it was in 1968, when the Fair Housing Act outlawed discrimination based on race, color, religion and national origin.
When people come to live in the U.S. from other countries, they often don't have an American credit history, identification or other typical requirements of the account-opening or loan process. But community banks are finding ways to serve this growing population while mitigating credit and compliance hurdles. Spring Bank and Sunrise Banks are featured in this article.
Structural racism and the persistent racial wealth gaps are at the forefront of many public policy debates today, and a big part of that debate is how to increase diversity in employment practices. These problems — and debates over remedies — are alive and well in the financial service industry. A recent report of the majority staff at the House Financial Services Committee noted that the financial services industry "remains mostly white and male," concluding that "more work is needed." Numerous research reports show that racial and ethnic diversity leads to greater productivity and profitability, attraction of more talented employees and greater innovation, among other benefits.
After four decades in the banking industry, Jane Henderson plans to retire this year as President and CEO of Virginia Community Capital (VCC). As the organization's founding executive director, Henderson has led VCC since its inception in 2006. Her banking career includes 29 years spent in community development finance. VCC, a community development financial institution (CDFI), was born out of a $15 million investment and a vision for an institution that served Virginia's most under-resourced communities.
Southern Bancorp, Inc., a Community Development Financial Institution (CDFI) and holding company for Southern Bancorp Bank, today announced it has entered into a merger agreement to acquire DeWitt First Bankshares Corporation and its wholly owned subsidiary, Arkansas County Bank, a $185 million asset bank with two branches in Arkansas County (DeWitt and Stuttgart) and one in Sevier County (Lockesburg).
President-elect Joe Biden will nominate Rohit Chopra to be the next director of the Consumer Financial Protection Bureau, according to four sources familiar with the decision, choosing a strong consumer advocate aligned with Sen. Elizabeth Warren (D-Mass.). If confirmed, Chopra, now a member of the Federal Trade Commission, would be returning to helm an agency he helped Warren set up after its establishment by the landmark Dodd-Frank financial reform law of 2010. The selection of Chopra signals that the Biden administration plans to return the CFPB to the more-muscular posture of its early days following three years of Trump administration appointees curbing the agency's reach. Biden also plans to nominate Gary Gensler, a former financial regulator known for aggressive bank oversight, as chairman of the Securities and Exchange Commission, a source familiar with the matter said.
Duke Energy announced today it has deposited $5 million into Optus Bank, a Black-owned bank based in South Carolina, furthering the company's support for diverse and minority-owned businesses, individuals and low income communities. The transaction was completed at the end of 2020. This marks the largest deposit Duke Energy has made with a Black-owned bank in the U.S. and the company expects to evaluate additional similar opportunities in the future. And, this historic relationship expands Optus Bank's depositors to include the utility sector.
The Bureau is actively seeking applications for vacancies on the Consumer Advisory Board (CAB), the Community Bank Advisory Council (CBAC), the Credit Union Advisory Council (CUAC), and the Academic Research Council (ARC). The deadline for application closes on February 24, 2021, at 11:59PM EST. Our intention is to complete this Director-level appointment process by September 2021. There are 18 vacancies across the various committees. Advisory committee members serve two year terms, on a staggered cadence. Please click the link for application instructions.