A plan to modernize the Community Reinvestment Act should theoretically be welcomed by community development financial institutions, but many such organizations are raising alarm about a key component of the proposal written by two federal regulators. The framework drafted by the Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. would place a new emphasis on the dollar amount of CRA projects for banks to be in compliance. This worries CDFI loan funds, which specialize in making relatively small credits and worry the new plan will lead to less capital from bank partners.
Urban and rural America lost branch banks at a similar rate from 2012 to 2017, according to the Federal Reserve. But the loss could have graver consequences for a larger proportion of rural areas.About 40 percent of rural counties experienced a net loss of branch banks from 2012 to 2017, according to a new report from the Federal Reserve System. The study found that 39 of these rural counties were "deeply affected" by the loss of banking services, meaning they had 10 or fewer bank branches in 2012 and lost at least half that number over the five-year period.
Americans desperately need help saving money, and fintechs are stepping up with intuitive apps that make saving simple and automatic. As consumers now funnel billions of dollars into these apps, banks and credit unions that don't join the crowd could be missing out on a big opportunity.
United Bank is proud to announce the addition of Elmo “Douglas” Ziebach, Jr. to their Board of Directors. The Monroeville, Alabama business owner and community leader begins his term body following service as a member of United Bank’s Monroe County Advisory Board. “We are very pleased to have Douglas join our board.” said Bob Jones, United Bank President and CEO. “His commitment to community service as well as his success in business make him eminently qualified as a bank director. Douglas’ business interest fit nicely with our service area and growth plans. United Bank’s dedication to forestry and rural land financing coupled with Douglas’ timber expertise, strategically align with our footprint and mission. We welcome his guidance in this emerging market.”
Arkadelphia's Southern Bancorp Inc. has joined the ranks of Certified B Corporations, an Arkansas first. The $1.4 billion-asset lender is among 10 banks and thrifts in the nation to gain the designation, which denotes the highest standards of social performance, transparency and legal accountability, balancing profit and purpose. Southern Bancorp changed its legal structure to become a benefit corporation in 2017. The move solidified its legal empowerment to pursue societal impact alongside profit. Arkansas was among seven states to enact B Corporation legislation in 2013.
Few of us think about how our banking affects the environment but, in reality, putting your money with a green-minded financial institution may be one of the best things you can do to help conserve land, protect air and water, save endangered wildlife and mitigate climate change. Banks (owned by shareholders) and credit unions (owned by the customers) lend and invest some of the deposited funds they are holding, which is how they're able to pay interest back to you. A bank or credit union that limits its investments to sustainability-oriented companies and institutions is well on its way to being considered green. Responsible options include Amalgamated Bank, Sunrise Banks, City First Bank of DC, Beneficial State Bank, and Southern Bancorp.
A group of 6 CDFIs known as the Partners for Rural Transformation has released a paper detailing the work of CDFIs in persistent poverty areas. The report finds that those in persistent poverty areas are overwhelmingly in rural areas and people of color. Despite evidence of success by CDFIs in improving employment, housing, banking and infrastructure, philanthropic, bank and federal investment in development in persistent poverty regions continue to lag. The report details why this is as well as receommendations for advancing social and economic opportunity in distressed communities.
After nearly two years of anticipation, financial regulators unveiled a sweeping proposal Thursday to reform how they implement the Community Reinvestment Act. The plan, released at a Federal Deposit Insurance Corp. board meeting, will overhaul CRA assessment boundaries, criteria for activities earning credit in CRA exams and how banks are scored overall for their performance. If finalized, the proposal would be the first significant update to the 1977 law in over two decades. The proposal has been championed by the Office of the Comptroller of the Currency. Despite support from the FDIC, the Federal Reserve has been unwilling to sign on to the draft plan, raising concern about competing CRA regimes.
The Federal Reserve Bank of St. Louis, in partnership with the Federal Reserve Banks of Atlanta, Minneapolis, Richmond, San Francisco, the Board of Governors, and the Community Development Financial Institution (CDFI) Fund will co-sponsor the CDFI Symposium on May 19-20, 2020 at the St. Louis Fed. This convening of researchers, industry leaders, policymakers and funders is designed to introduce and promote the awareness of current CDFI research across various disciplines (i.e. law, public policy, business, economics, etc.). The CDFI Fund invites the submission of papers, which are due Jan. 31, 2020.
It’s no secret that racism has been baked into the American banking system. There are few black executives in the upper echelons of most financial institutions. Leading banks have recently paid restitution to black employees for isolating them from white peers, placing them in the poorest branches and cutting them off from career opportunities. Black customers are sometimes profiled, viewed with suspicion just for entering a bank and questioned over the most basic transactions. This year, researchers for the National Bureau of Economic Research found that black mortgage borrowers were charged higher interest rates than white borrowers and were denied mortgages that would have been approved for white applicants