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Beneficial State Bank has been giving back to the community with an outreach program called Money on a Mission, which connects local small businesses and entrepreneurs to local capital providers. Demand for the events has been high, with over 200 attending the October gathering. Beneficial Co-CEO Kat Taylor said there is a need for loans many banks simply have to pass on. “Banks need three sources of repayment, which is hard for a start-up to demonstrate... These obstacles are the reasons we started this series—to connect small business owners to alternative, mission-aligned capital, like crowd funding platforms and peer-to-peer lending platforms—to bridge the gap and help them grow their businesses.”
Chicago-based Urban Partnership Bank has continued lending in underserved communities despite losses incurred from its ShoreBank loan portfolio. The bank committed more than $90 million in new loans in 2014, up 17 percent from $78 million in 2013. Urban Partnership was launched to continue Shorebank’s mission of lending in disadvantaged neighborhoods. But after 2014 ended with a $39 million net loss relating to the Shorebank portfolio, the bank's capital was reduced to just $67 million. “I do not expect to see a loss of that magnitude” in 2015, said Urban Partnership COO Robert Marjan. “At this point, we have not slowed down loan originations.”
The 2015 CDFI Coalition Institute will be held February 24th and 25th at Washington D.C.'s Washington Plaza Hotel. The Institute will feature panels on a number of topics focused on strengthening the CDFI industry, including conversations with senior CDFI Fund officials, discussion of trends in capitalization and briefings on political developments in the new Congress. The CDFI Coalition will also hold a Capitol Hill Reception on February 24th in conjunction with the Lobby Day portion of the Institute. As part of its policy outreach, the Coalition is encouraging attendees to schedule a visit with their Members of Congress and invite them to the reception. Register for the event here.
Loans to subprime borrowers have reached the highest level since the start of the financial crisis, driven by a boom in auto lending and a new crop of companies extending credit. Almost four of every 10 loans for autos, credit cards and personal borrowing in the U.S. went to subprime customers during the first 11 months of 2014. That amounted to more than 50 million consumer loans and cards totaling more than $189 billion, the highest levels since 2007. Car loans account for most of the increase, totaling $129.5 billion during the first 11 months of 2014, 68% of consumer subprime-loan volume. Americans are also willing to take on more debt; a Federal Reserve Bank of New York report showed total household debt increased $306 billion, or 2.7%, in the fourth quarter of 2014 from the year-ago period, to the highest level since the third quarter of 2010.
OneUnited Bank will close one of its five branches in Los Angeles and consolidate it into a nearby branch, citing a decision by the building’s landlord not to renew the lease. OneUnited initially acquired the branch through its merger with Founders National Bank in 2001. “Clearly the lease and the rent is one factor, and we clearly will save money,” said Teri Williams, OneUnited’s president. But with another branch less than a mile away on the same street, “consolidation is the best thing.” The bank is trying to find positions for most of the workers at the merged location, Williams said. She added that OneUnited has expanded services at the branch, adding a drive-through ATM and a community room that will be available to local nonprofits.
A hacker group has stolen as much as $1 billion from banks and other financial companies worldwide since 2013 in an unprecedented cyber-robbery, according to a report by computer security firm Kaspersky Lab. The gang, Carbanak, has targeted as many as 100 banks, e-payment systems and other financial institutions in 30 countries and is still active. The criminals infected bank employees’ computers with malware, which then spread to internal networks and enabled video surveillance of staff. That let fraudsters mimic employee activity to transfer and steal money. The gang also used access to banks’ networks to seize control of ATMs and order them to dispense cash to henchmen. Detailed information about the investigation can be found in this blog post and Kaspersky's full report.
Washington, D.C.-based Industrial Bank, fresh off a $2.2 million property sale in late December, is now mulling which of several other properties it owns to put on the market as part of a capital raise over the next two years. The bank hopes to generate about $10 million from the sale of several properties. The bank's President and CEO B. Doyle Mitchell, Jr. expects the money to help pay for ongoing branch renovations and potential expansion. "It's not going to bring all the capital into the bank right away," Mitchell said. "We are going to take it slowly and hope the market doesn't take a downturn against us.” Mitchell says the bank will do what it can to make sure the projects developed on lots are compatible with their communities.
At a Senate Banking Committee hearing on February 12, community bankers pushed for a bill to shield them from new rules on mortgage loans, trading operations and other mandates. Democrats on the committee were divided on the issue, with moderates like Sens. Heidi Heitkamp (D-N.D.) and Jon Tester (D-Mont.) agreeing that community bankers are struggling and need eased regulations. Elizabeth Warren (D-Mass.) broke with the moderates, citing statistics that show small lenders’ profits have risen over the last year. “[T]he financial performance of the community banks shows that Congress and the regulators, I think, have done a pretty good job in tailoring the rules to community banks,” she said.
Many black-owned banks are struggling to hold on in the face of the economic devastation that has ravaged many of their customers and increased competition from mainstream banks. The FDIC counted 25 black-owned banks remaining in the country last year, down from 48 in 2001. Sixty percent of black-run banks lost money in 2013, threatening institutions that often are the only financial institutions doing business in underserved areas. "This is such an extremely important sector of the banking community," said Michael A. Grant, president of the National Bankers Association, the lobbying group for black banks. "We were hit so hard during this sub-prime crisis, and they are having a hard time working their way back from that."
Minneapolis-based Sunrise Banks has posted its 2014 Corporate Social Responsibility report via Pinterest. The bank made 184 community development loans in 2014 totaling $106.4 million. Nearly $71 million were made in Sunrise Banks' CDFI Program investment area, which includes the cities of Minneapolis and St. Paul, Minn. The bank has deployed $13 million in New Markets Tax Credit allocation in 2014. The report also highlights Sunrise Banks’ Socially Responsible Deposit Fund, which allows customers to designate any deposit account to be used for community development projects, including affordable housing, nonprofit organizations and small business lending.