Recent News
The CDFI Fund has announced a 5 session nationwide listening tour to solicit public opinion as it crafts its new strategic framework. The tour aims to collect feedback on underserved community needs, areas for improvement and innovation and data use. The CDFI Fund encourages the participation of certified CDFIs, community development trade groups, foundations, local and state government entities, and others interested in community economic development. “The CDFI Fund views this listening tour as a unique opportunity for constructive dialogue to support the growth and success of CDFIs and... Read more
BankPlus is providing responsible short-term loans and financial education as part of the New Roots Credit Partnership, an initiative aimed at combating payday lending in Mississippi. The partnership is a collaboration between the Mississippi Center for Justice, banks and local employers. Since 2013, BankPlus has partnered with employers to run more than 50 three-hour classes for employees, teaching participants the basics of credit, how to create a household budget and how to save money. “These are people who aren't familiar with banking, it hasn't been a family tradition... Read more
Regulators are going beyond CRA ratings when assessing M&A deals amidst outspoken criticism from community advocates. Last year, the OCC required Valley National Bancorp to strengthen its overall CRA plan before acquiring 1st United Bank amidst pressure from community groups. The groups charged that, even though Valley National had received a “satisfactory” CRA rating, its CRA record in its New York City market was weak. Many banks looking into M&A deals are now beefing up their CRA plans and making them the centerpiece of their efforts to assuage community groups and regulators.... Read more
The NCUA has proposed changes that would make it easier for credit unions to lend to businesses, making them more formidable competitors with banks and other lenders for commercial trade. The revisions would eliminate requirements that credit union borrowers personally guarantee loans as well as a provision that imposes 80% loan-to-value cap on collateral offered as security. The NCUA also expects to increase the amount of loans a credit union can make to a single borrower while lifting a cap on an institution's aggregate construction and development lending. Credit unions would still have... Read more
Chicago, Illinois-based First Eagle Bank was one of three banks awarded the Illinois Bankers Association Community Service Award. The Illinois Bank Community Service awards honor financial institutions in the state that demonstrate a strong commitment to community service. First Eagle Bank has maintained an “Outstanding” CRA rating since 2009 and has undertaken a number of community development initiatives, including providing an $850,000 subsidy to Mercy Housing Lakefront through the Federal Home Loan Bank of Chicago Affordable Housing Program. First Eagle has also... Read more
The latest issue of the Southern Bancorp Mission News is out with details on a range of Southern's recent initiatives. Southern Bancorp's policy team is encouraging savings among low-income individuals by working with lawmakers on implementation of the American Savings Promotion Act. The federal legislation allows banks and credit unions to encourage savings with Prize Linked Savings programs -- cash-prizes awarded through savings raffles. Prize Linked Savings programs are fun, no-risk methods of encouraging customers to open savings accounts and make regular deposits.... Read more
Two new reports from Clarity Services and Charles River Associates found that the CFPB’s proposed payday lending rules could cause a majority of lenders to close down. The rules would require non-bank payday lenders to refuse credit to those below a certain payment-to-income ratio. The Clarity Services report examined payday lending transactions and concluded that payday storefront businesses would lose more than 70 percent in volume. The Charles River Associates... Read more
City First Bank of DC and Southern Bancorp have become the newest members of the Global Alliance for Banking on Values (GABV). The GABV is a network of banks that share the mission of using finance to deliver sustainable economic, social and environmental development. This marks an increase in membership for the GABV to 28 banks and banking cooperatives around the world -- among them Sunrise Banks and Beneficial State Bank. "I welcome these banking trailblazers to the Alliance,” said Dr. Marcos Eguiguren, Executive... Read more
Small banks could pay less in assessment fee premiums under a new FDIC proposal. The proposal would change the calculus used in determining assessment fees, incorporating metrics based on banks’ loan portfolios. The proposal would result in 60% of small banks paying lower premiums. The plan is intended to be revenue-neutral, reallocating a greater percentage of assessment fees to riskier institutions. It would also add a "loan mix" category in its risk assessment that takes into account the types of loans a bank holds. It would apply only to banks with less than $10 billion of assets that... Read more
A new study from the Center for Responsible Lending on the cumulative costs of predatory practices finds substantial costs to borrowers, communities and the economy on the order of hundreds of billions of dollars. The study found that dealer-brokered auto loans, which often contain abusive provisions, are twice as likely to result in repossession as bank or credit union financed auto loans. Borrowers of color are up to three times more likely to receive an abusive loan compared with a white counterpart and families with annual incomes below $25,000–$35,000 are much more likely to receive... Read more
The CDFI Fund of the U.S. Treasury has announced more than $3.5 billion in New Markets Tax Credit awards aimed at encouraging investment and economic growth in low-income urban and rural communities. A total of 76 organizations, including City First Bank of DC and Central Bank of Kansas City will receive tax credit allocation authority. The New Markets Tax Credit Program allows individual and corporate taxpayers to receive a non-refundable tax credit against federal income taxes for making equity investments in Community Development Entities. The program... Read more
Appalachian Community Capital (ACC), a new central bank for Appalachian CDFIs, has announced a successful first-round investment closing. Appalachian Regional Commission is leading formation of the new CDFI which will now begin lending with support from Christiansburg-based Virginia Community Capital (VCC). ACC will allow its member CDFIs to pool their capital needs and attract bigger investors. ACC is expected to leverage $233 million—$42 million over the next 24 months alone—in private bank capital. VCC will service ACC’s loans and provide back office support through... Read more
CDBA has wrapped up the 2015 CDBA Peer Forum, a two day event featuring conversations between community development bank executives and leading community development finance experts. The 2015 Peer Forum was the largest yet, attended by nearly 70 bankers from 44 community development banks across the United States. Guest speakers included Administrator of the Small Business Administration Maria Contreras-Sweet, CDFI Fund Director Annie Donovan and Assistant Secretary for Financial Stability Tim Bowler. An election was also held at the Peer Forum in which Brian Argrett of City First... Read more
Andy Anderson has been named President and CEO of Bank of Anguilla. He succeeds Fred Miller, Jr., who was elected chairman of the bank’s board of directors. Anderson has been with the Bank of Anguilla since 1983. He previously held the title of chief financial officer and compliance officer and is a director of the bank. Anderson holds BBA and MBA degrees from the University of Mississippi and graduated from LSU Graduate School of Banking of the South in 1988.
New York City-based Spring Bank, in partnership with healthcare nonprofit BOOM!Health, has launched the Employee Opportunity Loan to help workers bridge the gap between their income and cost of living. Spring Bank designed the Employee Opportunity Loan to provide access to affordable small dollar loans through partnerships with local employers. The product allows employees to access small credit securely and conveniently as part of their voluntary benefit package. Loan amounts range from $1,000-$2,500 and have no minimum credit score requirement. "The product demonstrates... Read more
Teri Williams, president of Boston-based OneUnited Bank, is optimistic about the future of black banking despite the struggles black banks have faced since the financial crisis. The recession was particularly difficult for black banks who served a larger percentage of moderate-to-low-income customers. But the economy is on the upswing, and OneUnited is poised to take advantage of the economic situation with a forward-looking tech strategy and new community outreach initiatives, including partnerships with local youth art programs. “It’s important for anyone to bank with... Read more
The FDIC, OCC and Federal Reserve are hosting the Interagency Minority Depository Institution and CDFI Bank Conference to help preserve and promote the missions of minority depository institutions and CDFI banks. The conference focuses on the unique positioning of these institutions to make positive change in their communities. Senior officials including FDIC Chairman Martin Gruenberg, Federal Reserve Board Governor Jerome Powell and Comptroller of the Currency Thomas Curry will be featured speakers. The conference will take place at the OCC Conference Center in Washington, D.C. July 13-15... Read more
M&F Bancorp of North Carolina, one of the nation’s oldest black-owned banks, is launching an effort to revamp its business model to counter the challenges MDIs are facing. With about 60% of its customers over 60 years old, M&F is rebranding and working to reach new customers in order to serve a wider community base. "I just don't think we're going to have more African-American banks open," Sills said. "I think it is incumbent on the ones that are remaining to make sure they're relevant and they're trying to reach out to as many groups or market segments in their... Read more
Amidst growing pressure towards more robust risk-management procedures, many community banks are facing difficult decisions when it comes to choosing when to use outsourced labor and when to increase their own staff to handle risk-management tasks. Outsourcing risk-management tasks such as cybersecurity can be tempting for small banks because of the expenses associated with hiring experts. But outsourcing can also carry risks related to managing the vendor relationship and monitoring the quality of work. Regulators have also been paying close attention to banks' oversight of vendor... Read more
Secretary of Education Arne Duncan announced on Monday that the Education Department would forgive the loans of tens of thousands of students who attended Corinthian Colleges. The for-profit college company closed and filed for bankruptcy last month amid charges of fraud. The company has been accused of falsifying placement rates, publicizing deceptive marketing and engaging in predatory recruiting by targeting the most vulnerable low-income students. For-profit colleges get the majority of their revenue from federal student loans -- and account for nearly half of the defaults on these... Read more