Newsflash Feb. 28, 2013

CDBANewsflash - Low Rez For Email 2

February 28, 2013
 

Member News

 
 
A lawyer for OneUnited Bank on Monday contested a revised bankruptcy reorganization plan filed by the Charles Street AME Church, arguing that new revelations about the congregation’s finances make it less likely the church can afford to pay its debts. “You think this case should be dismissed,’’ Judge Frank Bailey said after a pointed back-and-forth with the bank’s lawyer, who finally agreed. Edelman, the lawyer, said the creditors need to vote again on the church’s plan, with updated financial information that takes into account the new revelations as well. The judge said he would consider the arguments and make a ruling.
 
 
NPR 
(2-25-13)
 
The city of Oakland, California is taking a major step toward helping to bring many of its residents, especially illegal immigrants, out of the shadows. It will issue a municipal identification card to anyone who can prove residency. Oakland isn't the only city to issue such ID cards to illegal immigrants. New Haven and San Francisco already do that. The Oakland card, however, has a unique feature — it doubles as a debit card. The ID card is marketed by a Venice, California-based company, SF Global, in association with MasterCard and the Minnesota-based University National Bank.
 
 
San Francisco Chronicle 
(2-23-13) 
 
Tom Steyer uses a blue ballpoint pen to draw the sign of the cross on his left hand every day. His wife, Kathryn "Kat" Taylor, loves spending long days running a small bank in a gritty part of Oakland. Steyer stepped away Jan. 1 from Farallon Capital, the investment firm he founded in 1986, to devote all of his time, energy, and resources to working on reversing global warming. Taylor is on a mission to use One PacificCoast Bank, which she and Steyer opened in 2007, to help those typically shunned by mainstream financial institutions. Steyer, 55, earnest and emphatic, said, "I believe global warming is the big moral issue of our time. I want to change the dialogue and practices around energy." And Taylor, 54, said, "I am holding the torch for this mission every minute of every day. I think we have an opportunity to create a society, an economy, a world, where things happen right and you don't have to come in and correct the injustices."
 
 
Broadway Financial in Los Angeles Sells $16 of Loans  
American Banker
(2-21-13) 

Broadway Financial in Los Angeles has unloaded a package of loans in an effort to boost its asset quality. Broadway said that its Broadway Federal Bank sold $16 million in loans to a pair of unnamed buyers at an undisclosed price. The sales included $13.1 million of nonperforming loans. The first sale consisted of $14.1 million of single-family residential mortgages, including $11.8 million in nonperforming loans, removing all nonperforming single-family residential loans from the company's balance sheet.  The other sale involved five church loans for $1.8 million. The $384 million-asset company reduced its nonperforming assets by roughly a third, to $23 million, with the sales. "The sales will allow us to refocus our efforts on improving operations, pursuing growth as permitted under our cease-and-desist orders, and completing our previously announced recapitalization," Wayne-Kent Bradshaw, the company's Chief Executive, said in a press release.


 

Of Interest

 
Debating the Future of Fannie Mae and Freddie Mac
The Wall Street Journal 
(2-25-13) 
 
The Bipartisan Policy Center released a report on Monday entitled "Housing America's Future: New Directions for National Policy." The editors of the Wall Street Journal argue that "the BPC paper calls for replacing Fannie Mae and Freddie Mac with a 'public guarantor' that would oversee a new mortgage market through which banks and other private companies would originate mortgages and issue mortgage-backed securities. Private insurance companies would guarantee the mortgages and cover losses when loans default. The public guarantor would only step in if private-insurance providers were wiped out. To protect taxpayers, a fee paid on each issue of mortgage-backed securities would fund a separate federal insurance pool. At the heart of the commission's report is the conclusion that the U.S. mortgage market should continue to offer access to low-cost, 30-year fixed-rate mortgages and that the government will need to play some market backstop."
 
 
Major Banks Aid in Payday Loans Banned by States 
The New York Times 
(2-23-13) 
 
Major banks have quickly become behind-the-scenes allies of Internet-based payday lenders that offer short-term loans with interest rates sometimes exceeding 500 percent. With 15 states banning payday loans, a growing number of the lenders have set up online operations in more hospitable states or far-flung locales like Belize, Malta, and the West Indies to more easily evade statewide caps on interest rates. While the banks, which include giants like JPMorgan Chase, Bank of America, and Wells Fargo, do not make the loans, they are a critical link for the lenders, enabling the lenders to withdraw payments automatically from borrowers’ bank accounts, even in states where the loans are banned entirely. In some cases, the banks allow lenders to tap checking accounts even after the customers have begged them to stop the withdrawals. “Without the assistance of the banks in processing and sending electronic funds, these lenders simply couldn’t operate,” said Josh Zinner, Co-Director of the Neighborhood Economic Development Advocacy Project, which works with community groups in New York.
 
 
 
The trend could accelerate as interest rates remain low and as investors get comfortable with buying noncumulative perpetual preferred stock, industry experts say. Funds could help banks boost Tier 1 capital and pay for acquisitions. Changing capital rules are forcing "a lot of adjustments" at banks, says Brady Gailey, an analyst at Keefe, Bruyette, & Woods. As banks purge trust preferred stock "capital ratios need to be a little higher." Retail investors searching for higher yields largely make up the buyer pool, says Tommy Adams, Treasurer at First Horizon National (FHN) in Memphis, Tennessee. Many banks opt to sell depositary shares, which represent a share of a preferred security, providing a lower-cost option for retail investors. This makes for a more-attractive investment, says Chip MacDonald, a partner at Jones Day. "It's hard to find yield …so it's a good time to issue instruments that have a yield on them," he says.

Margin Calls - Life on the Edges of America's Financial Mainstream 
The Economist 
(2-16-13) 

 
Not all the unbanked are poor, nor do all poor people lack bank accounts. But the rate of the unbanked among low-income households (defined in a recent FDIC survey as those with an annual income below $15,000) is more than three times the overall rate. However, for those concerned that their low net worth bars them from the banking system, there are two reasons for hope. The first is that lenders and credit bureaus are starting to use a broader range of data to determine the creditworthiness of prospective borrowers. (Many of the unbanked have no credit histories). But data from rent, mobile-phone, and utility bills give lenders a way to find lower-risk borrowers. The second reason for optimism is an increasingly competitive market in pre-paid cards. Once simply reloadable proxies for cash, many of these cards now offer much the same features as bank accounts. The banks may yet follow suit. Michael Barr of the University of Michigan suggests that big banks should start offering basic accounts—offering electronic payments rather than cheque-writing, for instance—that operate with either pre-paid cards or debit cards. Overdraft-proofing the debit cards and eliminating paper cheques would reduce cost and risk. Such accounts may offer banks only modest revenue, but that is still better than none.
  

Jobs

 
New Jersey Community Capital - New Markets Tax Credit Portfolio Analyst (New Brunswick, NJ)
The primary responsibility of the Portfolio Analyst is to oversee and coordinate the ongoing reporting and compliance activities of NJCC’s NMTC investments and its Participant Loan Portfolio. We are seeking an enthusiastic, detail-oriented professional willing to take responsibility of making sure these areas of NJCC’s operations run smoothly and effectively. The Portfolio Analyst will participate in preclosing negotiations of NMTC transactions to ensure the transactions are structured in accordance with current rules and regulations as well as NJCC policies and procedures. The Portfolio Analyst will monitor NJCC’s post-closing servicing, accounting, and compliance for its NMTC investments and Participant Loan Portfolio.

Philadelphia LISC - Deputy Director (Philadelphia, PA)
The Deputy Director will manage the day-to-day operations of the Philadelphia office, including implementation of a recently completed strategic plan, the Sustainable Communities Initiatives and other programs, and community development lending. The position will serve as team leader for program staff, providing strategic planning, direction, and coaching, and will work closely with community development partners and consultants in planning, implementing, and publicizing projects and programs. The Deputy Director will oversee the identification and analysis of new opportunities; lead the development of workplans for new ventures and programs, and help manage evaluation of current and recent endeavors. The Deputy Director will also work closely with the Executive Director to help manage multiple LISC and external relationships, including committees of Philadelphia LISC’s Local Advisory Board, and to achieve programmatic and development goals.

NCALL - Loan Officer (Dover, Delware)
The NCALL Loan Fund seeks a mission-motivated and experienced person to underwrite and assist nonprofit Loan Fund borrowers. The Loan Officer will engage in marketing and pipeline creation for new loans to these borrowers and will then manage the underwriting process from due diligence through credit memo preparation and Loan Committee approval. This position will plan and implement technical assistance with applicants to ensure they remain well informed and capable of entering into a loan agreement. The Loan Officer will work with the Loan Fund Director and the Loan Fund Manager.

Enterprise Community Investment - Senior Construction Manager (New York, New York)
Enterprise seeks a highly-qualified and experienced architect, engineer, or construction professional to lead the construction activities in the New York office for Enterprise’s Low-income Tax Credit-financed affordable housing projects and to provide support to other Enterprise entities in their strategic initiatives.


 

                             
The CDBA Newsflash is a service of the Community Development Bankers Association (CDBA). For more information on other members and the work of CDBA please visit www.cdbanks.org. Or write to us at: 1444 I. Street NW, Suite 201, Washington D.C., 20005 or info@cdbanks.org.

Contact Name: Dana Weinstein; weinsteind@pcgloanfund.org; 202-689-8935 x32

Date: 
Thursday, February 28, 2013