Recent News
Preston Pinkett, President and CEO of City National Bank, says the bank is continuing to recover from the financial crisis. Pinkett was brought in about three years ago to plot a new course for the bank, which has been operating under a consent order from the OCC since 2009. Although City National faces challenges in loans and deposits, Pinkett noted the bank's progress in reducing problem assets. "We do see light at the end of the tunnel, and it's not another train," he said. Pinkett is planning a private offering to raise more capital for the bank before the end of the... Read more
Payday lending trade group Community Financial Services Association of America has sued U.S. banking regulators, accusing them of pressuring banks to stop serving payday lenders. The complaint alleges that under the Department of Justice's Operation Choke Point, regulators at the Federal Reserve, FDIC and OCC have engaged in "a concerted campaign" to drive payday lenders out of business by pressuring financial institutions to terminate relationships with the lenders. According to the suit, more than 80 banks have cut off relations with payday lenders due to warnings that continued... Read more
The Batten Institute at the University of Virginia's Darden School of Business profiles Southern Bancorp of Arkadelphia, Arkansas for Forbes. “Rural America is facing increasing challenges in light of the accelerating banking exodus,” says Dominik Mjartan, Senior Vice President at Southern Bancorp and member of the CDBA Board of Directors. “In 30 percent of our markets we are the only bank in town that offers responsible financial services, including transactional accounts, consumer credit and residential mortgages... Without access to a wide range of financial services... Read more
Hundreds of student-run bank branches and credit unions are opening in schools across the U.S. The school systems hope the branches will help student employees build up their resumes and make money while building financial literacy and providing families access to safe credit. Union Bank has three student-run branches in California, all located in low-income neighborhoods. The bank spends up to $200,000 to build each branch, staffs them with managers and pays student employees stipends and scholarships. Union views the branches as part of their community service and doesn't expect them to... Read more
A new video shows David Reiling, Sunrise Banks CEO and CDBA Director, accepting the Good Leader Award at Minnesota Business Magazine's Community Impact Awards. The awards are intended to recognize leaders and businesses that have a real impact on their communities. The magazine recognized Mr. Reiling for his work in community development finance, highlighting his advocacy on behalf of underserved consumers including Hmong and Somali immigrant communities. "[Leadership] is really about being a servant to those that you lead," Reiling said. "We can accomplish bigger things... Read more
Chicago-based Urban Partnership Bank has announced it will add two new employees to its Detroit lending staff and raise its annual lending goal for small business, nonprofits and real-estate investors to $10 million. The bank has already loaned millions of dollars to Detroit-based businesses since opening its Midtown office in 2012. Borrowers in the city so far have included the owners of a 138-unit apartment building who needed a renovation loan and a snack-food manufacturer that revived an abandoned factory and will be creating 50 new jobs. "We're aggressively seeking... Read more
BCB Holding Company, Inc. shareholders have approved the company's merger into The First Bancshares, Inc. BCB is the parent company of Bay Bank, which will be merged with The First, A National Banking Association. The First has now received all regulatory approvals required to complete the merger, which is expected to become effective June 30. Hoppy Cole, President and CEO of The First, commented, “We are excited and look forward to welcoming the staff, shareholders and clients of BCB Holding Company, Inc. and Bay Bank to our team. The combination of these two service... Read more
A growing number of financial start-ups are being introduced, each hoping to usurp the giants of Wall Street by offering better services and lower fees. They see banking as a prime candidate for disruption because it tends to run on bloated, dated technology. Even applying for a loan can take weeks or months, an eternity in the on-demand world of tech innovation. But tech entrepreneurs have found starting a bank to be an arduous ordeal, made more difficult by a maze of regulatory requirements and drawn-out compliance processes. It also requires a tremendous amount of money. These... Read more
The FDIC's latest Quarterly Banking Profile includes a new section focused exclusively on community banks. Previously, detecting quarterly trends in community banking with the reports had been difficult because the actions of the largest banks distorted the results across the board. Although the FDIC counts 6,234 community banks, their trends were muted because they control just 14% of industry assets. Observers say the new section will further the debate over whether smaller banks should get regulatory exemptions. The report found... Read more
As part of Operation Chokepoint, U.S. officials have opened at least 15 civil and criminal investigations against banks and other payment-processing firms, according to newly released Justice Department documents. Operation Chokepoint, a Justice Department investigation into whether payment-processers helped enable fraudulent activity, has been criticized for punishing good actors along with the bad. Republicans say the government has pressured banks to stop handling payments for merchants deemed as high risk, including gun dealers, short-term lenders and credit-repair programs. Emily... Read more
A U.S. Supreme Court decision in a Native American tribe’s casino case could stop online payday lenders that attempt to circumvent state laws by claiming affiliation with Native American tribes. The Court decided the case of Michigan v. Bay Mills Indian Community in favor of the tribe, which argued that the state could not sue the tribe directly for its off-reservation gambling activities. But the Court took the opportunity to sanction other avenues for restricting illegal off-reservation activities, including filing lawsuits against individual tribal officials and employees. Consumer... Read more
Virginia Community Capital has released an annual report covering the impact of their lending over the past year. The bank's lending was up 19% in 2013 and $61 million in new loans were approved. Also included in the report: How VCC helped construction firm J.R. Caskey Grading & Excavation withstand the recession; a renovation project which converted Lynchburg, Virginia's aging Armstrong Elementary School into new affordable housing; the modernization of a struggling medical facility in Patrick County, Virginia; and financing for Classic Creations screen printing... Read more
A new white paper by the National Federation of Community Development Credit Unions compares CDFI certified credit unions to mainstream credit unions. The paper finds that on average, CDFI credit unions outstrip their mainstream peers in financial growth and performance even though more of their loans and services are located in disadvantaged communities. CDFI credit unions are also more likely than mainstream peers to offer tech services. The report notes that the CDFI credit union sector has the potential to expand significantly: nearly half of all credit unions are concentrated in... Read more
Programmer Patrick McConlogue stirred controversy last summer by staging a social experiment in which he offered to teach a homeless man, Leo Grand, to code. McConlogue believed the skill would enable Grand to escape homelessness. Grand eventually released an app called Trees For Cars which generated 15,000 downloads and a $10,000 profit. But Grand is unbanked and that money now sits unused in McConlogue's bank account. McConlogue has encouraged Grand to open an account to make the transfer, but Grand refuses. Mitchell Netburn, president and CEO of Project Renewal, says it's not uncommon... Read more
Preston Pinkett III has been appointed chairman of City National Bancshares Corp. Mr. Pinkett succeeds Eugene Giscombe, who been appointed chairman emeritus. Mr. Giscombe will remain on the board as a director. “We are very pleased with this transition," said City National Director Alfonso Carney. "Mr. Giscombe provided a level of leadership and guidance that helped the bank grow and expand into new markets. We believe now is the perfect time for Mr. Pinkett to add the role of chairman to his responsibilities of CEO. As a proven business leader, Mr. Pinkett set in motion... Read more
New lending from Bank2 has allowed the Housing Authority of the Cherokee Nation to finance an ambitious affordable housing project. The project makes use of HUD's Section 184 Indian Home Loan Guarantee Program, which will provide a 100% guarantee on the loans. The Housing Authority of Cherokee Nation has closed on six loans with Bank2 so far, which will replenish the housing authority's revolving construction fund as more homes are built. “We are very excited to be working with the Cherokee Nation on their initiative to build homes for their citizens throughout the tribe’s... Read more
The Consumer Financial Protection Bureau has issued a report highlighting illegal actions by payday lenders, debt collection companies and consumer reporting agencies. CFPB examiners found instances of payday lenders deceiving consumers and illegally harassing borrowers to collect debts. The report also criticized debt collection agencies often used by those lenders, claiming the agencies misled consumers about litigation, made excessive calls to consumers and failed to investigate credit... Read more
Panelists offer perspectives on the legacy of the bank bailout. Lee Sachs, former counselor to the Secretary of the Treasury, argues that the bailout was a success; higher capital requirements and new regulations have led to a substantially safer financial system. Other panelists critique that view, arguing that Treasury missed an opportunity to force the big banks to downsize to smaller, safer institutions. Several panelists argue that the bailout failed altogether in its primary mission of preventing another financial crisis by focusing too narrowly on banks while failing to reform... Read more
An FDIC report has found that rural community banks located in depopulating areas are coping with a shrinking pool of customers better than expected. Rural counties that experienced outflows lost 14.8 percent of their population on average. But community banks in those areas actually fared better, on average, than banks in metro areas. Unusually strong performance in the agricultural sector beginning in 2006 resulted in community banks in depopulating rural areas posting higher asset growth rates than community banks elsewhere from 2006 through 2012. Asset growth was accompanied by strong... Read more
A recent spate of lawsuits accuse 10 banks and a credit union of helping online payday lenders break usury laws by processing debt collection transactions. Payday lenders depend on those transfers, which are more reliable than debit and check transactions. The financial institutions are accused of violating federal anti-racketeering laws, federal banking regulations and industry standards and rules established by NACHA. The plaintiffs argue that the banks should have known that their customers were acting illegally and thus were helping them break the law. Targeted financial institutions... Read more