Recent News
A report by the Cleveland Fed finds that CDFI Fund awards substantially improve institutions' dedication to lending in distressed areas. The study compares the increase in lending at CDFI credit unions that receive grants to the baseline lending level of credit unions that apply but are rejected. The institutions which received CDFI grants increased lending by 3 percent on average. For every dollar awarded, awardees loaned 45 cents to borrowers in the first year and up to $1.60 within three years. The authors note that the CDFI Fund's core program works well because of its institutional... Read more
Urban Partnership Bank has made a $1.6 million commercial real estate loan for casual dining franchise Culver’s to acquire property for their first restaurant in Chicago. Construction of the new restaurant, located near Chicago's Wrigley Field, is expected to be completed prior to opening day of the 2015 baseball season. Justin Obriecht, the Culver’s franchisee who is bringing the burger chain’s first restaurant to the city, wants to add about 2,500 square feet on the property's first floor to make room for the restaurant. He also plans to add two new floors with six... Read more
The CDFI Fund is requesting public comment on a new annual reporting form for all certified CDFIs. The objective of the new Annual Certification and Data Collection Report Form is to reduce the burden of the recertification process. It will also require new annual financial and impact data, a change the CDFI Fund hopes will enable them to track the financial health and accomplishments of CDFIs. In particular, the CDFI Fund seeks input on whether the proposed form is... Read more
The FDIC’s Division of Depositor and Consumer Protection will host a webinar, Model Approaches to Community Bank/CDFI Partnerships on July 31, 2014, from 2:00 p.m. to 3:30 p.m. The webinar accompanies the recent release of the FDIC resource guide, Strategies for Community Banks to Develop Partnerships with CDFIs, which lays out strategies for community banks to identify and evaluate opportunities to collaborate with CDFIs. The program includes presentations on model partnerships between banks and CDFIs as... Read more
Simmons First National Corp. will donate a branch to Arkadelphia, Arkansas-based Southern Bancorp upon finalizing its acquisition of Delta Trust & Bank. The branch transfer allows Simmons First to adhere to federal regulations limiting acquisitions in places where banks already hold significant market share while also supporting Southern's community development work. “Our focus is specifically on rural communities just like Eudora, which means we are aware of both the challenges they face and the opportunities that exist," Southern Bancorp Inc. CEO Darrin Williams said... Read more
The First Bancshares Inc. of Hattiesburg, Mississippi has completed its acquisition of Bay Bank and its holding company, BCB Holding Co. Inc. The acquisition brings The First's total locations in Mobile and Baldwin counties to 10 and gives the company the largest market share among community banks in those counties. "We are excited about the opportunities that this merger will create in the Mobile market," said M. Ray "Hoppy" Cole, president and CEO of The First. "The combination of Bay Bank and The First will create a community bank focused on its local markets with the... Read more
The CDFI Fund has released its FY 2013 Year in Review report detailing impact metrics for award programs. In FY 2013, $172.6 million was awarded to 201 organizations by the CDFI Program (including healthy foods) and the Bank Enterprise Award Program awarded $17 million. BEA Program applicants increased spending on community development projects by $493.5 million over the prior year. That includes a $427.8 million increase in loans and investments in distressed communities as well as a $55.4 million increase in loans, deposits and technical assistance to CDFIs and a $10.3 million increase... Read more
Urban Partnership Bank's newsletter details the bank's Detroit redevelopment projects. Work is underway on Urban Partnership's redevelopment of a 126,000 square-foot building into rental housing and office space for the Archdiocese of Detroit. The bank's increased presence on Detroit holds promise for boosting the city's economy, says Urban Partnership bank senior business banker Beverley Loyd. "This is a great opportunity to help with the ongoing revitalization of Detroit. Creating good jobs, developing quality affordable housing and helping small businesses grow are... Read more
Mortgage lenders and investors have been desperately trying to figure out how to originate non-QM loans that offer lenders the kind of profits last seen during the days of subprime lending. At a time when loan volumes have plummeted, lenders can charge consumers significantly higher mortgage rates for these products. The first step for many lenders has been introducing niche-products safe enough to compensate for legal dangers. These lenders have introduced loans for self-employed borrowers, foreign nationals and borrowers with blemished credit from a past short sale or foreclosure. They... Read more
The latest edition of the Pan American Bank Post is out with the Chicago bank's latest community impact news. Pan American employees volunteered at a number of neighborhood events recently, including Saint Anthony’s Health Fair. The event featured carnival games and food from local restaurants, along with health advice, free immunizations and free health screenings for residents. Pan American Bank employees also participated in Neighborhood Housing Service's Neighborworks day by refurbishing Chicago's Unity Park Garden with some planting and grooming.
First Bancshares received a profile in the Hattiesburg American for its continued service to local customers. “Hattiesburg is a very robust economy — we’ve got two medical centers, two universities, a military presence with Camp Shelby,” said M. Ray “Hoppy” Cole, president and CEO of First Bancshares and The First. “All those things help give it a stable, growing economy, and stability and growth is good for banking.”
Despite the notoriety that subprime loans gained during the financial crisis, they are re-emerging as one answer to the tight lending standards that have shut out millions of would-be homeowners. Subprime loans, which accounted for about 15 percent of all new home loans in 2005 and 2006, are now just 0.5 percent of the mortgage market. Only a handful of lenders are offering them, at interest rates from 8 to 13 percent. But the market is picking up. The number of lenders responding to inquiries from subprime borrowers started to catch up to the number responding to prime borrowers beginning... Read more
Some 200,000 households in Louisiana borrow from payday lenders every year; in Baton Rouge, 20 percent of bankruptcy cases involve the loans. But Together Louisiana, a coalition of religious and civic groups, found out just how hard it can be to fight the predatory lenders. The group ran up against a wall of opposition when they launched a campaign for stricter payday lending rules. The number of industry lobbyists at the statehouse jumped from a handful at the beginning of the legislative session to more than fifty by its end. In late April, the state Senate rejected the bill. Advocates... Read more
Big banks including Citigroup, Suntrust and Bank of America are trying to learn from Amazon's use of predictive analytics to target customers more accurately. Like Amazon, banks collect vast amounts of information about their clients' spending and savings. That kind of information could be used to anticipate whether a customer needs a credit card, car loan or mortgage. This individualized approach runs counter to the traditional big bank model that relies on a high volume of transactions rather than marketing tailored to individual customers. Predictive analytic services could be more akin... Read more
The U.S. housing recovery should regain its footing, but faces a number of challenges according to a new report from Harvard University's Joint Center for Housing Studies. Tight credit, elevated unemployment and mounting student loan debt among young Americans are moderating growth and keeping millennials out of the market. Although the housing industry saw notable increases in construction, home prices and sales in 2013, household growth has yet to fully recover from the effects of the recession. Nevertheless, the report predicts that millennials will be key to reviving housing demand as... Read more
A survey of checking account holders by Pew Charitable Trusts has found widespread confusion and dissatisfaction about financial institution's overdraft policies. Current regulations require financial institutions to obtain affirmative consent (an “opt in”) from consumers before enrolling them in an overdraft penalty plan that makes automatic short-term advances to cover transactions. The survey, however, found that more than half of respondents who had incurred overdraft penalties did not believe they had opted in to the plan. The penalties fell disproportionately on younger, lower-income... Read more
Intense competition for limited lending opportunities in a slow-growth, low-interest-rate environment is fueling looser, riskier underwriting standards among banks, the OCC warned in a new report. The OCC highlighted two areas in particular where banks took on more risk in the pursuit of profit: high-yielding loans issued to more speculative borrowers and indirect auto loans made through car dealers. Banks are also easing... Read more
City First Bank of D.C. has released their 2013 annual report, marking a year of growth that featured a record $66 million in new loans and the completion of four New Markets Tax Credit projects that deployed $61 million in reinvestment. Among the borrowers City First has helped is Washington Latin Public Charter School. Since 2006, Washington Latin had been giving elementary and high school children top-notch educations -- but operated out of three rented sites. Thanks to financing from City First Bank and assistance from the New Markets Tax Credit Program, Washington... Read more
A study by the Philadelphia Federal Reserve found measurable benefits to one-on-one pre-purchase homeownership counseling in comparison to a single brief classroom session. The study compared examined the experiences of 425 first-time homebuyers, all of whom received only a two-hour pre-purchase workshop. Half of the participants received additional ongoing one-on-one counseling. The analysis showed that participants who had received the one-on-one counseling demonstrated greater creditworthiness as they prepared to qualify for a home mortgage. Researchers saw the clearest difference when... Read more
The Senate Appropriations Subcommittee on Financial Services and General Government has approved its fiscal year 2015 appropriations bill. The bill would set aside $230 million for the CDFI Fund, a substantial increase from the President’s proposed funding level of $224.9 million and in-line with the House Financial Service Subcommittee’s proposed funding level. Also included was a $1 billion authorization for the CDFI Bond Program and $18 million for the Bank Enterprise Award Program. The two... Read more