Recent News
Beneficial State Bancorp's new office building, Framework, has received a $1.5 million award from the U.S. Tall Wood Building Prize Competition, sponsored by the USDA Softwood Lumber Board and the Binational Softwood Lumber Council. The building, anticipated to be one of the first tall timber structures in the United States, is designed to promote sustainable urban ecology by promoting social justice, sustainable building and economic opportunity. The designers hope the building will pave the way for more wooden high-rises, creating demand for Oregon’s local lumber harvest... Read more
Bank consolidation may have the strongest yearly showing in 2015 since the financial crisis. The banking industry agreed to 34 deals in October collectively valued at $8.2 billion, marking the best single month for M&A this year. Those deals boasted an average premium of 152% of tangible book value. While M&A has largely been dominated by small banks in recent years, some large institutions may begin looking into M&A. Since January 2014, banks have agreed to 11 deals valued at more than $500 million. The heightened activity comes as many bankers revisit the notion of building... Read more
By inserting individual arbitration clauses into a soaring number of consumer and employment contracts, corporations are increasingly circumventing the courts and barring people from joining together in class-action lawsuits. Over the last few years, it has become increasingly difficult to apply for a credit card, use a cellphone, get cable or Internet service, or access an array of services without agreeing to private arbitration. More than a decade in the making, the move to block class actions was engineered by a coalition of credit card companies and retailers who said that class... Read more
Ridgeland, Miss.-based BankPlus is the winner of the American Bankers Association Community Commitment Award in the Nontraditional Borrower and Underbanked category. BankPlus was honored for turning people who thought a bank loan or checking account was beyond their reach into customers. Their CreditPlus product provides borrowers a small-dollar, short-term loan designed as an alternative to payday loans. Since launching CreditPlus in 2008, BankPlus has signed up 22,223 unbanked or underbanked Mississippians who attended one of 642 money-management sessions. "What’s great... Read more
Construction financing from Virginia Community Capital will facilitate the renovation of a historic department store building in Petersburg, Va. into a mixed use building featuring artist studios, gallery space, mixed-income housing and commercial storefronts. The Butterworth Flats will include 45 mixed-income apartments, a majority serving incomes of less than 80 percent of area median income and a commercial storefront. “VCC was delighted to help this important downtown Petersburg project come to life,” said VCC Senior Loan Officer, Dawn DeHart. “The downtown area should... Read more
CDBA member Beneficial State Bank, based in Oakland, Calif., was named the winner of this year’s Promontory Empowerment Awards in the CDFI Banking category. The Empowerment Awards recognize innovative programs that provide or encourage safe, fair financial services in underserved communities. All of the finalists in the CDFI banking category were CDBA members, including BankPlus, Carver Federal Savings Bank and Southern Bancorp. The Empowerment Awards are sponsored by Washington, D.C.-based consulting firm Promontory... Read more
The CDFI Fund has opened the 2015 round of the New Markets Tax Credit (NMTC) Program, making available up to $5 billion in tax credit allocation authority. The NMTC Program spurs investment of private sector capital into distressed communities by providing a tax credit to corporate or individual taxpayers who make qualified equity investments in designated Community Development Entities (CDEs). The CDEs, in turn, invest the capital raised into projects and businesses in low-income communities. The deadline for submission will be Wednesday, December 16, 2015. The CDFI Fund will also be... Read more
A technical problem blocked account access for holders of one of the most popular prepaid cards, RushCard. RushCard’s problems started over the Columbus Day weekend, when it switched from one processing technology provider to another. Customers reported problems gaining access to their funds, swamping the company’s telephone service center and website. RushCard, founded in 2003 by the hip-hop impresario Russell Simmons, said on Tuesday that the problem had been mostly fixed. But thousands continued to experience difficulties. RushCard has been criticized previously for charging its largely... Read more
A new report by the GIIN and the Carsey School of Public Policy provides an overview of the U.S. Community Investing field: the types of intermediary organizations raising investments, the range of available investment products and the types of investors active in the space. The principal challenge facing CDFI banks, the authors write, is the lack of liquidity of equity investments. CDFI bank stocks are generally not publicly traded and few mission-driven banks who have publicly offered stock have been able to continue as independent entities. As a result, investors must generally hold on... Read more
In the Deep South, shriveling job prospects for the high-school-educated and scant state support for the poor have combined with more timeworn social problems to diminish the chances of a middle-class life for somebody born into poverty. In Mississippi, the 86 members of Ruleville Central’s senior class attended a school given an F grade by the state. Some new graduates went off to local colleges. Others lacked money or test scores. One turned down an offer from his dream school because of the cost. The school’s guidance counselor said she can count on her hand the ones who will finish... Read more
The CFPB has finalized a rule that will require new fields to be submitted for the Home Mortgage Disclosure Act (HMDA). The rule is intended to shed more light on consumers’ access to mortgage credit with new data including the property value, term of the loan, and the duration of any teaser or introductory interest rates. Financial institutions will be required to provide more information about mortgage loan underwriting and pricing, such as an applicant’s debt-to-income ratio, the interest rate of the loan and the discount points charged for the loan. Some small financial institutions... Read more
The CFPB backed off some of its initial plans in its final rule requiring lenders to collect more data from mortgage borrowers, but industry representatives warned the agency had not gone far enough. Though the agency dropped some datasets it initially proposed to collect last year, some lenders said the final rule was still going to be overly burdensome, particularly for smaller institutions. There also remain privacy concerns from both industry and consumer groups. Lenders must now report the address of the home, which could pose additional risks. "The CFPB's final rule [adds] to the... Read more
United Bank of Atmore, Ala. is helping local students receive free books by working with literacy nonprofit First Book. First Book provides access to free new books for children in need. United Bank will pay shipping and handling to send the books to Pre-K and kindergarten students at Perdido Elementary School. In addition to delivering the books, United Bank Executive Assistant Tonya Lambert took time to read a story in each of the classrooms. "The best part about the initiative is that students can bring the books home and don’t have to return them," said Lambert. “They... Read more
CDBA is following up on the energetic discussion we had in last week's webinar on the FHA Small Building Risk Sharing (SBRS) program with a second webinar (October 20, 2015) that will delve into the fine detail of the application process. The SBRS program promotes multifamily housing project financing by providing lenders a 50% risk sharing arrangement with HUD. The presentation will be led by SBRS Initiative expert Diana Talios of the FHA. The webinar is free to employees of CDBA member banks and $75.00 for... Read more
Financial education website NerdWallet is now featuring CDFI banks and credit unions as a socially responsible alternative to big banks. NerdWallet is a resource that enables users to search a database of hundreds of financial products to find the best products. To have your institution's products listed on NerdWallet -- a great way to make them visible to a young, tech-savvy audience -- sign up for free here. In its writeup of CDFI depository institutions, NerdWallet highlighted New York based Spring Bank... Read more
Virginia Community Capital has opened a new office in downtown Norfolk, Va. to enhance its lending capability throughout Virginia. The first loan made through the office will be to Conte Acquisitions, LLC, which will receive the innovative capital they need for a multi-tenant retail building. Thresa Joyce, senior vice president and senior loan officer, will lead the opening of the office. Ms. Joyce has over 20 years of experience in the financial and commercial real estate industries. Jane Henderson, VCC’s President and CEO stated, “VCC is very pleased to announce the... Read more
Community bankers provide relationships to small business clients that the big banks can't match, writes Mission Valley Bank President and CEO Tamara Gurney. "Any street corner bank – big or small – can handle the transactional side of banking, but it takes a team of trusted advisors who understand a client’s business to develop programs to meet their exact needs," Gurney writes. "It is that aspect that gives community banks a distinct advantage over the larger institutional banks that often gain new customers with teaser rates and short-lived promotions but don’t deliver... Read more
Merchant cash advance wholesaler Pearl has been sold to private equity firm Capital Z Partners after a courting period by buyers including blue chip firms such as Goldman Sachs. Merchant cash advance is a legal, unregulated way to lend money to small businesses at interest rates as high as 250 percent. To get around state interest limits, the companies argue they aren’t charging interest—they’re buying the money businesses will make in the future at a discount. Pearl’s innovation is to preempt clients’ existing debt by offering a second advance to borrowers who had already received an... Read more
A new CFPB plan unveiled last week would eliminate arbitration clauses in financial product agreements that prevent consumers from filing class action lawsuits. The proposal would require arbitration clauses to explicitly say that they do not apply in class action cases. Meanwhile, firms still using such clauses for individuals would have to provide the CFPB with information about those claims and the amount of resulting awards given to consumers. CFPB Director Richard Cordray said the arbitration clauses — which, consumers are rarely aware of beforehand — amount to a "free pass" to avoid... Read more
Grant Bancshares Inc., the bank holding company for Louisiana-based Bank of Montgomery, will acquire the $64 million Bank of Ringgold. Bank of Montgomery, which currently operates from six locations, will expand its footprint to include the Bank of Ringgold's three locations. Following the merger, Bank of Montgomery will have approximately $280 million in total assets and $250 million in deposits. “We have a strong commitment to our local communities, and we take pride in knowing all of our customers by name. That will never change,” says Bank of Montgomery President and... Read more