Recent News
The Federal Reserve will conduct a national survey of Community Development Financial Institutions (CDFIs) from March 22-April 23. CDFIs are specialized financial institutions operating in markets that are underserved by traditional financial institutions, and they have been at the forefront of the economic response to the COVID-19 pandemic. Participating CDFIs will be asked questions about their capitalization, capacity and the impact of COVID-19 on their organizations, clients and communities. The Federal Reserve Board of Governors, Federal Reserve Banks and the CDFI Fund intend to use... Read more
The data analysis firm 60 Decibels released last month the results of a survey conducted with the Paycheck Protection Program (PPP) borrowers of six Community Development Financial Institutions (CDFIs), including CDBA members Southern Bancorp and Optus Bank. 60 Decibels interviewed 1,073 PPP borrowers for this survey, one third of whom originally sought assistance from a non-CDFI lender. Of the borrowers who initially sought assistance from another lender, 84% indicated that their experience with a CDFI bank was better than their experience with the other lender.
Can community development financial institutions be anti-racist? As financial institutions, CDFIs inherit the very tools of capitalism that have wreaked havoc on communities of color for decades in repeated cycles of cynical wealth extraction. Can any organization overcome that history? CDFIs believe that they can use the tools of capitalism for good. But without deep analysis and interrogation, each tool should remain suspect.
Banks have been permanently shuttering branches for years, but the number of closures hit a record in 2020 as the pandemic accelerated the move by many customers to online banking. Banks closed 3,324 branches last year, according to a tally by S&P Global Market Intelligence. "In the last 60 days, I've had two mayors reach out to me saying, 'Would you bring a bank branch here?' " says Darrin Williams, CEO of Southern Bancorp, which specializes in underserved communities. "In a lot of the rural communities we serve, the bank branch is part of the social fabric," Williams said. "If you go... Read more
A hundred years ago, Brooklyn was teeming with mutual savings banks. There was the Brooklyn Savings Bank, the Dime Savings Bank of Brooklyn, the South Brooklyn Savings Bank, the Williamsburg Savings Bank, ... but they are all gone. A mutual savings bank does not have shareholders and is operated on behalf of its depositors. Most, including three of the four remaining mutual savings banks in the city with branches in Brooklyn, Ridgewood Savings Bank and Cross County Savings Bank (founded in 1888 as Bushwick Savings & Loan Association of New York) out of Queens, and Ponce Bank out of the... Read more
Emma C. Chappell, 80, of Philadelphia, who galvanized Black Americans around the country in 1992 when she opened United Bank of Philadelphia, died Tuesday, March 16, of complications due to sepsis at Riddle Memorial Hospital in Media. Mrs. Chappell lived in Wynnefield Heights. She was the first Black woman to found a bank since Maggie Lena Walker established the St. Luke Penny Savings Bank in Richmond, Va., in 1903. However, Mrs. Chappell was the first Black woman to charter a commercial bank in the country, said Joann Bell, cofounder of the Black Women's Leadership Council.
Later this spring, the CDFI Fund will be accepting applications for a new grant program, the Small Dollar Loan Program. The Small Dollar Loan Program was created to encourage Certified CDFIs to establish and maintain small dollar loan programs and provide alternatives to high cost small dollar loans. For this program, small dollar loans are unsecured loans of up to $2,500. The grants may be used for two eligible activities, loan loss reserves and technical assistance activities. More information about the Small Dollar Loan Program, including details about the application and the... Read more
The Community Development Financial Institutions (CDFI) Fund is issuing a call for well-qualified personnel to serve as application reviewers for the FY 2021 application round of the CDFI Program and Native American CDFI Assistance (NACA) Program. The CDFI Fund has contracted with Areeva/F2 Solutions (AF2) to recruit and process applications on a rolling basis for potential candidates. For more information on the CDFI and NACA programs, visit the CDFI Fund website at https://www.cdfifund.gov/Pages/default.aspx.
Several banks have announced initiatives totaling billions of dollars that are aimed at addressing racial inequalities, but observers say the programs need to be carefully tailored. City First Bank, a lender in Washington, closely cultivates relationships with its borrowers, finding ways to direct capital to promising but fledgling businesses. The bank is seeing an uptick in interest from larger financial institutions, said its chief lending officer, Sonja Wells, “but it’s all still at a smaller scale than it could be.”
United Bancorporation of Alabama, Inc. ("UBAB") today announced that it has signed a definitive agreement to acquire Town-Country National Bank ("TCNB"), a Camden, AL based community bank with approximately $126.2 million in total assets as of December 31, 2020. TCNB shareholders will receive aggregate cash consideration of $28.5 million, with a portion of the consideration paid as a special dividend prior to the close of the transaction. TCNB will rebrand as Town-Country United Bank and operate as a separate banking subsidiary under UBAB. "The Town-Country franchise is complementary to... Read more
In February, the Clean Energy and Sustainability Accelerator Act was reintroduced to Congress. The legislation would allow for the creation of a national green bank, which would use $100 billion in private and public funds to invest in clean energy projects. This move, together with the fact that 39% of voters said they would take environmental factors into consideration when choosing a bank, seems to point to the financial industry getting greener. "We're living in a time of great societal change, and consumers have made it clear that they want brands to take a stance on things like... Read more
Comerica and the Comerica Charitable Foundation announced today a commitment to invest approximately $16 million in 2021 to support small businesses and communities impacted by COVID. This support is in addition to the $11 million in 2020 that was directed toward small business relief and nonprofits providing essential needs, such as food and supplies – as a result of the pandemic – in Comerica's footprint of Texas, Michigan, California, Arizona and Florida. In late 2020, Comerica moved $10 million in deposits to Minority Depository Institutions (MDIs), as well as established mutual... Read more
Like the previous two rounds of checks, the $1,400 direct payments will come with eligibility rules based on income and other requirements. However, because these new checks are set to be authorized through a process known as budget reconciliation, they will not be exempt from garnishment. Consumer and banking trade groups, including CDBA, sent a letter to Congressional and Senate leaders on Monday calling for the stimulus payments to be exempt from garnishment. “Otherwise, the families that most need this money — those struggling with debt and whose entire bank accounts may be frozen by... Read more
"Buy Black! Bank Black!" The chant was heard frequently over the course of 2020 during protests and conversations surrounding racial justice in America. It turns out it was more than just a chant. Over the past year, Black banks have a notable uptick in interest on the heels of this social movement. "We've seen more than 30 million dollars of new deposit relationships come to us through large corporate partners, non-profit organizations and customers over the past few months," said Michael Pugh, CEO and President of Carver Bank. "I can tell you that it's at least a forty percent increase... Read more
The latest revision of the Paycheck Protection Program appeared to be a victory for the most vulnerable small businesses, offering more generous relief to companies like solo ventures that were eligible for only tiny loans — or none at all. If only they could take advantage of the changes. President Biden announced an abrupt overhaul two weeks ago to funnel more money to very small companies, some of which qualified for loans as small as $1 under the old guidelines. But the Small Business Administration updated its systems only on Friday, and with just three weeks before the program is set... Read more
New Biden administration rules overhauling the way small business loans are doled out will potentially leave thousands of sole proprietorships and the self-employed on the sidelines, despite the president's pledge to give them better access to pandemic aid. The Small Business Administration quietly decided that the benefits that President Joe Biden promised to "one-person businesses" won't be available to many of those who have already received aid from the program. The agency concedes those businesses were shortchanged under earlier rules — some received as little as $1 because of the way... Read more
Kathryn Smart was struggling to make ends meet at the start of England's latest lockdown. The 45-year-old usually earns £1,100 a month working at a debt collection agency in Sunderland, but reduced her hours to help home-school her six-year-old son. Smart needed money to tide her family over, but knew she would not qualify for a mainstream loan. A bad experience with payday lenders several years ago left her with £3,000 worth of debt and a poor credit score. With a contentious county court judgment (CCJ) also on her file, she Googled “loans offered to borrowers with CCJs” and found Fair... Read more
In its largest award round to date, the U.S. Treasury Department's Community Development Financial Institutions (CDFI) Fund announced Feb. 22 that more than $175.4 million in Capital Magnet Fund awards (CMF) have been distributed during its sixth funding round. The fiscal year (FY) 2020 award round also saw the largest number of award recipients with 48 organizations receiving funds. The 48 awardees were selected from 137 applications, which requested more than $642.2 million in awards this CMF round. Congratulations to CDBA members Beneficial State Bancorp, Inc., Central Bank of Kansas... Read more
Two CDBA member bankers were featured on NPR's Marketplace program in late February. Robert James II, Director of Strategic Initiatives at Carver State Bank, was on the February 22 program to discuss hiring at black-owned banks and the Paycheck Protection Program rollout. Dominik Mjartan, President and CEO at Optus Bank, was on the February 24 program to discuss small business recovery during the pandemic.
Carver Bancorp, Inc., the holding company for Carver Federal Savings Bank, a certified Minority Depository Institution (MDI) and Community Development Financial Institution (CDFI), announced that JPMorgan Chase has made a long-term equity investment of approximately $6 million in common and preferred shares of the Company. JPMorgan Chase's equity investment represents approximately 3.4 percent of the Company's issued and outstanding common stock at purchase. In addition, the investment includes 5,000 shares of the Company's Series F preferred stock. Carver expects to utilize the... Read more