Recent News
The CDFI Fund is holding an application webinar on the 2014 CDFI Bond Guarantee Program application today at 2:30 PM. The webinar will touch on a variety of topics, including the application review process, application evaluation criteria, bond proceed use restrictions, program costs and reporting requirements. In addition, CDFI Fund staff will discuss the upcoming outreach sessions being held across the country for the CDFI Bond Guarantee Program, as well as the... Read more
Debra McGee, a senior vice president and director of minority business development for BankPlus, discusses her career and the bank's work in Mississippi: "When we decided to build a BankPlus branch near Jackson State [University], some individuals thought we were crazy. Of course, BankPlus had a special vision to serve this community... We invested more than $3 million in this venture. We are proud of what we created in Jackson and making a difference in the community and our state... One of the services or products I helped create is CreditPlus, a program to help... Read more
At a summit on small business credit innovations held at the Federal Reserve Bank of New York earlier this month, executives from high-cost alternative lenders responded to criticism of their business loan pricing. Asked whether their average loan's 54% APR was fair, Andrea Gellert of alternative lender OnDeck responded that, “APRs somewhat distort the true economic costs and the cost-return relationship on the loan. If I buy that inventory for a dollar and sell that inventory for $2 in a six-month period, that’s a 200 percent return. So my 54 percent cost makes absolute sense.” Industry... Read more
OneUnited Bank is piloting revamped branches featuring roaming staffers armed with iPads loaded with real-time information about their walk-in customers. Staffers can see the customers' recent calls, open loan referrals and recent transactions. That information allows the bank's sales representatives to quickly identify each person's financial needs and to make relevant suggestions. The new branch model employs the recently introduced Salesforce 1 for Financial Services customer relationship management software. OneUnited Bank introduced the software late last year to... Read more
The Senate Banking Committee has approved a White House-supported bipartisan measure to overhaul Fannie Mae and Freddie Mac on a 13-9 vote. But analysts say that is short of the majority needed to compel Senate Majority Leader Harry Reid (D-Nev.) to bring the bill up for a floor vote. It is an open question whether the Johnson-Crapo bill will become the base from which legislative efforts resume in the next Congress, or if Sens. Brown, Schumer or Shelby will seek to start anew. Liberal lawmakers have felt less urgency to advance an overhaul given the new direction towards maintaining the... Read more
Southern Bancorp is rolling out a new quarterly publication, Mission News, which reports on the bank's community impact. In this issue: How Southern Bancorp helped the Clarksdale, Miss. Municipal School District become one of five districts nationwide selected for a $10 million U.S. Department of Education Race to the Top grant; the revitalization and entrepreneurship initiatives enacted by Southern Bancorp and the U.S. Department of Housing and Urban Development in Helena, Ark.; and a financing effort that helped a local coffee shop expand while giving new life to a... Read more
The CDFI Fund has released a new list of certified CDFIs showing a substantial increase in the size of the CDFI banking sector. The new list counts a total of 96 CDFI banks, up from 77 at the end of 2013 -- an increase of almost 25%. In a single month, between March and April 2014, the number of CDFI banks increased by 13 institutions. The total number of certified bank holding companies is now 57, an increase of 6 since March. To see the new list of certified CDFIs in excel format, click here.
Melvin L. Watt, the new director of the Federal Housing Finance Agency, has announced a significant shift in strategy for Fannie Mae and Freddie Mac which will preserve their role in mortgage financing rather than roll it back. Under Watt's policy, Fannie and Freddie will keep the current limits on the size of loans they guarantee rather than reducing them as previously proposed. The director also loosened rules obligating banks to “buy back” distressed loans. The mortgage financiers will now allow two delinquent payments in the first 36 months after their acquisition of a loan and... Read more
An analysis of federal filings has found that the five banks with the most branches in Wal-Mart stores ranked among the top 10 U.S. banks in fee income as a percentage of deposits. Among the 6,766 banks included in the study, just 15 had fee income higher than loan income—including the five top banks operating at Wal-Mart. The high fee income results from the increasingly common practice of customers intentionally overdrawing their accounts, choosing to incur the fees for quick cash. "It's cheaper than a payday loan," said Anna Proctor, a Walmart customer who often overdrafts. If her... Read more
Six Democrats whose support is crucial to passing the Johnson-Crapo Freddie and Fannie reform bill agreed not to vote for the proposal in a private meeting. The senators were concerned that the structure of the re-insurer intended to replace Fannie and Freddie would be unworkable and that the bill lacked sufficient support for affordable housing goals. Senate Banking Committee Chairman Tim Johnson (D-S.D) and Senator Mike Crapo (R- Idaho) still have the backing of six Democrats and six Republicans on the 22-member committee. However, Senate Majority Leader Harry Reid (D-Nev.) has said the... Read more
The CDFI Fund has opened the application period for the CDFI Bond Guarantee Program. The program is intended to support CDFI lending and investment by providing a source of long-term, patient capital to CDFIs. Up to $750 million in total bond guarantee authority is available in this round. The minimum guarantee size is $100 million. Application materials are available on the CDFI Fund’s website. Qualified Issuer applications must be submitted by June 23, 2014. Guarantee applications must be submitted by June 30,... Read more
U.S. Federal Reserve Governor Daniel Tarullo has called on regulators to revamp a variety of new bank rules, including carving out exemptions for mid-sized banks. Tarullo said regulators should amend their rules to explicitly exempt community banks from the Volcker rule. He also criticized the regulatory approach of Basel III, which allows banks to judge the riskiness of their assets. Tarullo advocated instead for the stress-testing approach administered by the Fed, although he expressed concerns that Dodd-Frank's mandates are needlessly subjecting midsize, low-risk banks to those exams.... Read more
The FDIC has published a guide encouraging traditional community banks to partner with CDFIs. The guide identified loan participations as a strength of CDFI banks, enabling traditional banks to manage risk in low- and moderate-income areas while allowing the CDFI bank to make larger loans. Citing several existing partnerships, the report said Chicago-based Community Savings Bank received CRA credit for investing $1 million in certificates of deposit in six CDFI banks, including Urban Partnership Bank, Pan American Bank, Illinois Service Federal Savings and Loan and International... Read more
A recent analysis by the Federal Reserve Bank of Minneapolis has found that the rate of community bank consolidation has not increased despite the rising cost of regulation. Instead, researchers found the current consolidation rates to be in line with historical trends. In June 2013, the Minneapolis Fed forecasted a decline of 325 community banks by June 2014; the actual decline was 114. That translates to an annual rate of decline of 3.5%, only slightly above the 3% annual decline which characterized the last... Read more
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| David Reiling of Sunrise Banks and Faruk Daudbasic of First Eagle Bank lead a discussion of balancing mission with margin. |
The Community Development Bankers Association (CDBA) held its annual Peer Forum, a two day roundtable discussion featuring conversations between community development bank executives and leading... Read more
The National Community Investment Fund's Banking Industry Annual Report finds the CDFI banking sector leads the rest of the banking industry in both amount of lending in low income areas and number of branches in low income communities. The analysis found that CDFI Banks provide 58.7% of their home mortgage lending to distressed communities, while non-CDFIs provide 23.8%. CDFI banks locate 75% of their branches in distressed communities, compared to 50% for non-CDFIs. The report also noted the increasing health of the sector, finding that 52 of the 75 CDFI Banks included in their analysis... Read more
A $495,000 grant from the Federal Home Loan Bank of Dallas made through BankPlus to the Housing Authority of the City of Canton, Mississippi will assist 45 low-income homeowners make critical home repairs. This is the latest Affordable Housing Program Grant made through BankPlus. In 2013, the bank facilitated $745,000 in the grants, supporting the creation or rehabilitation of 70 housing units. "The Housing Authority staff has been working diligently to not just obtain repairs for Canton residents' homes, but to identify contractors who will provide quality work and... Read more
New York City Mayor Bill de Blasio has announced $8.2 billion in public funds for a 10-year housing plan aimed at providing affordable homes to thousands of low- to middle-income residents. The mayor intends to require developers to include affordable units in residential projects being developed in newly rezoned areas around the city. Mr. de Blasio said that with $2.9 billion in state and federal money and more than $30 billion the city expects to attract in private funds, the projected investment to... Read more
Promontory Financial Group is sponsoring the Empowerment Awards to highlight the good work of CDFIs and others that support access to safe, fair financial services in underserved communities. The awards will recognize projects in two categories: The Community Development Banking category for CDFI banks and the Access category for financial and technology firms with less than $10 billion in assets. Prizes will include five pro bono consultations with senior Promontory officials on strategic and regulatory issues, as well as a financial prize of $100,000. CDFIs chosen in either category will... Read more
A U.S. grand jury has subpoenaed a company that the Federal Trade Commission has said is at the center of a deceptive payday lending scheme. The grand jury is looking at possible violations of statutes covering wire fraud, money laundering and racketeering. The FTC lawsuit accuses the companies and Tucker of deceptive practices, including failing to disclose to borrowers the true costs of loans and falsely threatening consumers with arrest or prosecutions if they failed to pay. In a complaint filed in April 2012, the FTC said AMG and its allegedly related companies operate online payday... Read more