Three Senate Democrats are calling for an inquiry into reports that officials at the Office of the Comptroller of the Currency halted at least a half-dozen investigations related to racial discrimination and redlining. “Recent reports indicate that senior OCC officials have abdicated their responsibilities — allowing banks to continue business as usual despite alleged violations of [Equal Credit Opportunity Act] and [Fair Housing Act],” the senators wrote to the acting Treasury Department inspector general on Thursday. The senators’ letter followed a July 13 ProPublica report that OCC staff over the last three years discovered at least six banks, including Bank of America and Cadence Bancorp, were allegedly engaged in discriminatory lending, but failed to reprimand or penalize the institutions.
U.S. Bancorp Community Development Corporation (USBCDC) today announced $1.15 million in grants to more than a dozen Black-led Community Development Financial Institution (CDFI) partners and – in partnership with the U.S. Bank Foundation – a grant to the African American Alliance of CDFI CEOs. This is part of U.S. Bank's overall $116 million commitment to addressing social and economic inequities. A total of 15 CDFIs will receive grants ranging from $50,000 to $100,000. Among the banks receiving grants are CDBA members Carver State Bank, City First Bank of DC, The Harbor Bank of Maryland, and Southern Bancorp
When the U.S. Small Business Administration rolled out the Paycheck Protection Program (PPP) in response to the economic toll of the coronavirus pandemic, Bank of St. Francisville helped administer funding to support a total of 197 small businesses, which helped 1,469 employees keep their jobs. The bank asked the owners of those businesses to share feedback on their experience working with Bank of St. Francisville.
Businesses owned by Black people were hit especially hard by the coronavirus pandemic because of a combination of geography, limited reach of a key federal aid program and weaker ties to banks, a new report from the Federal Reserve Bank of New York finds. This report offers “some pretty compelling evidence about the coincidence of the health crisis and business crisis in places that have high concentrations of Black businesses and Black residents,” said Claire Kramer Mills, assistant vice president at the New York Fed. “To have the greatest impact, the next round of Covid-19 relief should be more targeted geographically to focus on the hardest-hit areas and communities that lack critical infrastructure (hospitals, banks) to ameliorate the gaps,” the report said.
Black banks support Black communities, lending mostly to Black homebuyers and maintaining community lending even in tough economic times. Recent interest in supporting these institutions is a welcome and positive step. But their small sizes and declining numbers mean that today, they cannot tackle the problem of capital access in predominantly Black neighborhoods by themselves. To bring greater capital to communities of color, our recent study on the benefits and limits of Black banks suggests a two-pronged approach: increase capital to Black banks, and adopt policies that support community development financial institutions (CDFIs) more broadly.
Morgan Stanley announced $14.6 million to support long-time partner Carver Bancorp, Inc., one of the nation's largest Minority Depository Institutions (MDI). Morgan Stanley's grant enabled Carver to buy back shares and bolster its capital position to help weather the economic impact of COVID-19 in the wake of the pandemic. In addition, the grant will help the bank assist small businesses and customers that were affected by COVID-19, particularly those that did not receive federal relief loans. Previous commitments Morgan Stanley has made include $10 million in grants to support Minority Depository Institutions (MDIs) including Industrial Bank of Washington, D.C.
The Community Development Bankers Association and Inclusiv, the national trade associations for the CDFI bank and credit union sectors, respectively, sent a letter to the U.S. Senate Committee on Banking, Housing, and Urban Affairs last week signalling their strong support for the Jobs and Neighborhood Investment Act (S. 4255). The bill redirects $17.9 billion of $500 billion in funding already appropriated by Congress under the CARES Act for the U.S. Treasury to support emergency economic relief to CDFIs and MDIs.
First Federal Bank of Wisconsin plans to purchase Mitchell Bank. FFBW Inc., is the Brookfield-based parent company of First Federal. In an announcement this week, the bank said it entered an agreement to buy in cash the assets and assume the liabilities of Mitchell Bank. The purchase price is expected to range from $4.7 million to $4.9 million, a regulatory filing shows. According to the announcement, First Federal will take over about $44 million in customer deposits and $17 million in loans from Milwaukee-based Mitchell. As of March 31, First Federal held $278 million in total assets.
"The more you [run a community bank in the Bronx] the more you see the lack of inclusion is baked into stuff," says Demetris Giannoulias, the Chicago-born co-founder and CEO of Spring Bank. Reports submitted to federal regulators show Spring Bank's borrowers, both individuals and businesses, are disproportionately located in low-to-moderate income census tracts. All of its small business lending in 2016 and 2017 went to businesses with less than $1 million in revenue. Yet it is financially sustainable — if it wasn't, like any bank it would get in trouble with regulators.