If it seems like you're hearing a lot more about environmental, social and governance (ESG) issues in banking these days, it's not your imagination—the topic has rapidly gained prominence across the industry in 2021 and will likely become even more important in years to come. The growing focus on climate risk has spurred banks (and their regulators) to more closely examine their environmental exposures—how rising sea levels and changing weather patterns might affect their existing loan portfolios. They're also reconsidering their support of companies and projects that generate substantial carbon emissions. Amalgamated Bank, based in New York, is part of a consortium of banks that disclose the greenhouse gas emissions of their loans and investments. A bank executive told Lawler that close to 25% of its loan portfolio is directed toward climate solutions, and the percentage may go up. “We have a bounty of clients looking to solve the world’s problems and looking to partner with us,” the executive says.
The number of Black banks in the United States has been steadily slipping for 20 years. But the organizers of a proposed new bank in Columbus, Ohio, which features a predominantly African American board of directors, just might change the narrative. If the charter application is approved by state and federal regulators — and the organizers are able to raise at least $20 million in capital — Adelphi Bank would be the only Black bank in Ohio and one of just 21 Black-owned or Black-led banks across the country. Adelphi is also in line to be the first bank owned or led by African Americans to open since George Floyd’s May 2020 murder, which renewed calls to address and eliminate the racial wealth gap in the United States. The initiative to open Adelphi Bank — which takes its name from a Black-owned savings and loan company that once occupied the same area where the bank’s headquarters branch would be located — is part of a growing effort to increase Black Americans’ access to capital.
The consumer lender Oportun has agreed to buy the challenger bank Digit in a deal that the buyer says will accelerateits plan to offer a fuller suite of banking services. Oportun, a Silicon Valley lender that offers personal loans and credit cards to consumers, announced the nearly $213million cash-and-stock deal on Tuesday. Less than six weeks earlier, Oportun said that it was withdrawing itsapplication for a bank charter from the Offi ce of the Comptroller of the Currency. The proposed acquisition would allow Oportun to offer Digit's services, including mobile banking, automated savingstools and robo-investing, to its customers, and give Digit's 600,000 customers the option to borrow from Oportun. The goal is to give customers a “one-stop shop” for all of their fi nancial needs that improves their fi nancial well-being,Oportun CEO Raul Vazquez said in an interview. “We’re going to create a leading neobank focused on fi nancial health,” he said. Oportun says that its products provide affordable alternatives to payday loans and that its artifi cial intelligenceunderwriting models help it offer credit to consumers who have struggled to qualify at traditional providers. Thecompany has drawn criticism from consumer advocates, particularly in connection with its past debt collectionpractices.
In the wake of George Floyd's murder, JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co. and other large U.S. lenders began investing hundreds of millions of dollars in Black-owned banks -- an attempt to help meet the needs of underserved borrowers as systemic racism became part of the national conversation. More than a year later, executives at the Black-owned banks say the cash infusions have allowed them to increase lending and expand their staffs, giving support to the African-American community amid pandemic-era uncertainty. Still, while the funding has been useful, the lenders say they need additional investment to shrink racial inequality in financial services and ensure their longterm survival. The number of Black-owned banks has been cut in half over the past 20 years. CDBA members Industrial Bank and Optus Bank are mentioned.
The Biden administration has already picked financial regulatory nominees who are polar opposites from their Trump-appointed predecessors. But the White House's choice to run the Office of the Comptroller of the Currency could be its most left-leaning selection so far. Cornell University law professor Saule Omarova, who was named as the OCC nominee Thursday, is a noted cryptocurrency skeptic, proposed moving customer deposits to the balance sheet of the Federal Reserve, and even questioned a recent acquisition spree by JPMorgan Chase. "Omarova is likely to be Biden's most polarizing pick for a top financial regulatory job," Ian Katz, an analyst with Capital Alpha Partners, said in a research note. "That's saying something in a group that includes SEC Chairman Gary Gensler and still-waiting-for-confirmation [Consumer Financial Protection Bureau] nominee Rohit Chopra." As an academic, Omarova has argued for substantial restructurings of the financial system.
As part of its ongoing efforts to help customers better navigate their financial lives, Citizens announced several initiatives designed to make banking more worry-free, transparent and accessible, including a new way to avoid overdraft fees and a commitment to helping ensure that underserved communities have access to banking services. The bank introduced Citizens Peace Of Mind™, a new deposit feature providing customers with the ability to avoid the expense of unexpected overdraft fees. This feature -- which was added to all Citizens Checking accounts on Oct. 1 – allows customers who unexpectedly overdraw their accounts the ability to deposit or transfer enough funds to bring their account to a positive available balance prior to the close of business the following business day, which will automatically reverse all overdraft fees. "Citizens Peace of Mind™ empowers customers by helping them to avoid unnecessary fees," said Brendan Coughlin, head of Consumer Banking at Citizens. "Life can be hectic, and we believe a bank should operate as a transparent and trusted financial partner, helping customers keep more of their hard-earned money in their pockets." This new feature will complement the $5 Overdraft Pass, a customer protection that the bank has offered for several years on all checking and money market accounts. If a customer overdraws their account with a transaction of $5 or less, Citizens does not charge an overdraft fee.
Renegade Capital is the activist's podcast for finance and investments. The hosts, Leah Fremouw of Virginia Community Capital, Andrea Longton of OFN, and Ebony Perkins of Self-Help Credit Union, interview thought leaders who go into the ring every day to fight against the racist, sexist, and exclusive norms established by traditional financial and capital systems. Listeners walk away inspired by the guests and armed with actionable tips and tools to use money to create the world in which they want to live. The first episode was released on Tuesday, featuring special guest Cat Berman of CNote
It's a far cry from the postal banking system that progressives favor and bankers dislike, but the U.S. Postal Service's entry into the check-cashing space is still making a big splash. Loud responses Monday from both boosters and critics reflected a widespread perception that the pilot program could be a first step toward a wider implementation of postal banking. The modest scope of the program contrasted with the size of the reaction it generated. The recently launched program is only operating in four offices — in Washington, D.C., Baltimore, Falls Church, Virginia and the Bronx, New York — out of the Postal Service's more than 30,000 locations nationwide. The USPS is only accepting business and payroll checks of $500 or less, shutting out larger checks and any personal checks. The post office will not provide cash in exchange for the checks, and will instead let customers purchase a single-use gift card of up to $500.
Financial giant JPMorgan Chase has increased its direct equity investments in Minority Depository Institutions and Community Development Financial Institutions to $100 million and has added 10 new institutions as recipients. JPMorgan Chase has announced investments in the following Black- and Latino- led MDIs and CDFIs: Arkadelphia, Arkansas-based Southern Bancorp; Savannah, Georgia-based Carver State Bank; Atlanta-based Citizens Trust Bank; Baltimore-based The Harbor Bank of Maryland; Detroit-based First Independence Bank; Columbia, South Carolina-based Optus Bank; McAllen, Texas-based Rio Bank; Houston-based Unity National Bank; Washington, D.C.-based Industrial Bank; and Miami-based Sunstate Bank. JPMorgan Chase’s latest round of direct equity investments more than doubles the $50 million it originally pledged to invest in MDIs and CDFIs. The bank's initial round of investments, which was dispersed earlier this year, included the holding companies for New Orleans-based Liberty Bank and Trust; Durham, North Carolina-based M&F Bank; New York City-based Carver Federal Savings Bank; and Los Angeles-based Broadway Federal Bank.
Five witnesses testified to the U.S. House Committee on Financial Services' Subcommittee on on Consumer Protection and Financial Institutions in a hearing entitled "The Future of Banking: How Consolidation, Nonbank Competition, and Technology are Reshaping the Banking System." Among the witnesses was Desiree Jackson, Assistant Vice President for Treasury Management at Beneficial State Bank. Click "read more" to read the committee memorandum and watch a recording of the hearing.