Recent News
Southern Bancorp has appointed former CDFI Fund director Donna Gambrell to its board of directors. “I am honored to have been named as a board member to Southern Bancorp, a CDFI that has played a critical role in providing affordable capital, credit and financial services to low wealth communities in the mid-South for almost three decades,” said Ms. Gambrell. “I have been impressed by the bank’s commitment to mission and impact and by the leadership and vision of Board Chair Glen Jones, CEO, Darrin Williams and the entire Southern Bancorp team. I look forward to supporting... Read more
Beneficial State Bank has been giving back to the community with an outreach program called Money on a Mission, which connects local small businesses and entrepreneurs to local capital providers. Demand for the events has been high, with over 200 attending the October gathering. Beneficial Co-CEO Kat Taylor said there is a need for loans many banks simply have to pass on. “Banks need three sources of repayment, which is hard for a start-up to demonstrate... These obstacles are the reasons we started this series—to connect small business owners to alternative, mission-... Read more
Chicago-based Urban Partnership Bank has continued lending in underserved communities despite losses incurred from its ShoreBank loan portfolio. The bank committed more than $90 million in new loans in 2014, up 17 percent from $78 million in 2013. Urban Partnership was launched to continue Shorebank’s mission of lending in disadvantaged neighborhoods. But after 2014 ended with a $39 million net loss relating to the Shorebank portfolio, the bank's capital was reduced to just $67 million. “I do not expect to see a loss of that magnitude” in 2015, said Urban Partnership COO... Read more
The 2015 CDFI Coalition Institute will be held February 24th and 25th at Washington D.C.'s Washington Plaza Hotel. The Institute will feature panels on a number of topics focused on strengthening the CDFI industry, including conversations with senior CDFI Fund officials, discussion of trends in capitalization and briefings on political developments in the new Congress. The CDFI Coalition will also hold a Capitol Hill Reception on February 24th in conjunction with the Lobby Day portion of the Institute. As part of its policy outreach, the Coalition is encouraging attendees to schedule a... Read more
Loans to subprime borrowers have reached the highest level since the start of the financial crisis, driven by a boom in auto lending and a new crop of companies extending credit. Almost four of every 10 loans for autos, credit cards and personal borrowing in the U.S. went to subprime customers during the first 11 months of 2014. That amounted to more than 50 million consumer loans and cards totaling more than $189 billion, the highest levels since 2007. Car loans account for most of the increase, totaling $129.5 billion during the first 11 months of 2014, 68% of consumer subprime-loan... Read more
OneUnited Bank will close one of its five branches in Los Angeles and consolidate it into a nearby branch, citing a decision by the building’s landlord not to renew the lease. OneUnited initially acquired the branch through its merger with Founders National Bank in 2001. “Clearly the lease and the rent is one factor, and we clearly will save money,” said Teri Williams, OneUnited’s president. But with another branch less than a mile away on the same street, “consolidation is the best thing.” The bank is trying to find positions for most of the workers at the merged location... Read more
A hacker group has stolen as much as $1 billion from banks and other financial companies worldwide since 2013 in an unprecedented cyber-robbery, according to a report by computer security firm Kaspersky Lab. The gang, Carbanak, has targeted as many as 100 banks, e-payment systems and other financial institutions in 30 countries and is still active. The criminals infected bank employees’ computers with malware, which then spread to internal networks and enabled video surveillance of staff. That let fraudsters mimic employee activity to transfer and steal money. The gang also used access to... Read more
Washington, D.C.-based Industrial Bank, fresh off a $2.2 million property sale in late December, is now mulling which of several other properties it owns to put on the market as part of a capital raise over the next two years. The bank hopes to generate about $10 million from the sale of several properties. The bank's President and CEO B. Doyle Mitchell, Jr. expects the money to help pay for ongoing branch renovations and potential expansion. "It's not going to bring all the capital into the bank right away," Mitchell said. "We are going to take it slowly and hope the... Read more
At a Senate Banking Committee hearing on February 12, community bankers pushed for a bill to shield them from new rules on mortgage loans, trading operations and other mandates. Democrats on the committee were divided on the issue, with moderates like Sens. Heidi Heitkamp (D-N.D.) and Jon Tester (D-Mont.) agreeing that community bankers are struggling and need eased regulations. Elizabeth Warren (D-Mass.) broke with the moderates, citing statistics that show small lenders’ profits have risen over the last year. “[T]he financial performance of the community banks shows that... Read more
Many black-owned banks are struggling to hold on in the face of the economic devastation that has ravaged many of their customers and increased competition from mainstream banks. The FDIC counted 25 black-owned banks remaining in the country last year, down from 48 in 2001. Sixty percent of black-run banks lost money in 2013, threatening institutions that often are the only financial institutions doing business in underserved areas. "This is such an extremely important sector of the banking community," said Michael A. Grant, president of the National Bankers Association, the lobbying group... Read more
Minneapolis-based Sunrise Banks has posted its 2014 Corporate Social Responsibility report via Pinterest. The bank made 184 community development loans in 2014 totaling $106.4 million. Nearly $71 million were made in Sunrise Banks' CDFI Program investment area, which includes the cities of Minneapolis and St. Paul, Minn. The bank has deployed $13 million in New Markets Tax Credit allocation in 2014. The report also highlights Sunrise Banks’ Socially Responsible Deposit Fund, which allows customers to designate any deposit account to be used for community development... Read more
City lawmakers in Santa Fe, N.M. have revived debate over public banks with a proposal to form a municipal bank that support affordable housing efforts and lending to the underbanked. And, perhaps for the first time, some bankers are interested -- if the initiative will help them make more loans. Previous public banking proposals, many modeled after the Bank of North Dakota, have rarely made it past the drawing board. But public banking advocates hope that smaller municipal banks might be easier to realize. The Santa Fe City Council last month approved a feasibility study to look into a... Read more
A new study from Harvard’s Kennedy School of Business shows that the decline in community banks has accelerated since passage of the Dodd-Frank banking reforms in 2010. The study found that the share of banking assets controlled by community banks has declined by 12 percent since 2010 -- nearly double the rate of decline in the previous four years. But industry analysts have cautioned against attributing the trends exclusively to Dodd-Frank. About half of Dodd-Frank regulations still haven’t been implemented and... Read more
A bill introduced in the House of Representatives would make the New Markets Tax Credit permanent. Introduced by Reps. Pat Tiberi (R-Ohio), Richard Neal (D-Mass.) and Tom Reed (R-N.Y.), the bill would also provide an increase in the annual NMTC allocation and provide Alternative Minimum Tax (AMT) relief for NMTC investments. As a result, NMTC investors would receive the same consideration under the AMT as is currently provided to investors in many other federal tax credits. “I’ve seen first-hand the benefits of the New Markets Tax Credit in the 12th Congressional District,” said Tiberi. "[... Read more
The CDFI Fund has invited comment on the CDFI Program and Native American CDFI Assistance Program (NACA Program) Applications. The fund seeks particular comment on whether the requested information is conducive to the fund’s goals, the degree of burden entailed in the collection of information, ways to enhance the quality of the information and ways to minimize the burden on respondents, including through the use of automated collection techniques or other forms of technology. The deadline for comment submission is April 12, 2015.
Urban Partnership Bank Senior Commercial Banker Jeffrey Wright spoke in an interview about his work on the Chicago’s Business Leadership Council’s emerging leaders group. The council’s mission is to create jobs, opportunities and leaders in the black community. Wright was born on Chicago’s West Side, where he was raised by a single mother on a fixed income. Now he has an undergraduate degree from Georgetown, an MBA from Northwestern’s Kellogg Business School and is a senior banker at Urban Partnership, where he is being groomed to be a future CEO. “I have direct access to... Read more
Ho-Chunk Inc., the Winnebago Tribe of Nebraska's economic development corporation, has become a major shareholder in Native American Bancorporation, the Denver, Colo.-based holding company of Native American Bank. The bank is owned by 28 federally recognized tribes, Alaska Native Corporations and tribal organizations. “We have made a concerted effort to source projects that meet the bank’s mission while providing economic diversity and meaningful jobs," said Thomas Ogaard, president and CEO of Native American Bank and Native American Bancorporation. "The capital support... Read more
Members of BancAlliance, a consortium of about 200 community banks, will start using Lending Club, a website that facilitates loans to individuals, to build new portfolios of consumer loans. The banks will each commit to buy a certain amount of loans from Lending Club, which will vet borrowers for their ability to repay. Until now, small banks generally haven’t been able to justify the cost of underwriting unsecured loans of less than $35,000 without requiring collateral because big banks can do so much more efficiently. By relying on Lending Club’s software to quickly evaluate a borrower’... Read more
Broadway Federal Bank avoided failure during the Great Recession and now appears on track for a full recovery. In 2008, the bank received $9 million from Treasury's Troubled Asset Relief Program to stay afloat. Treasury and the nonprofit NCIF, which had backed Broadway Federal's 2013 recapitalization, subsequently agreed to convert their preferred shares to common stock — giving up half the amount owed them. Now, in Broadway Federal's Q3 2014 financial report, the bank's net income has risen to $765,000, up from $584,000 a year earlier. "In October, we raised $9.7 million... Read more
In a wide-ranging interview, Industrial Bank President B. Doyle Mitchell discussed the bank's history, its positive reputation among D.C.-area businesses, and the burden of regulation for community development banks. "There's way more regulation that we have to adhere to... It's more difficult to help people. And I grew up in a business where I saw how we were helping people as a financial institution, we were able to make money at the same time -- we were able to do well and do good at the same time. Now there's so many "t's" that need to be crossed, so many "i's" that... Read more