The past 12 months were interesting for publicly traded companies, including those based in Mississippi. Nine of the top public companies on the Mississippi Business Journal's 15 top public companies list are banking institutions. M. Ray (Hoppy) Cole, president/CEO of The First, A National Banking Association headquartered in Hattiesburg, is also positive. “Our company performed extremely well during 2020, which is a testament to the commitment by our team members to focusing on client service and being nimble; that is being able to change quickly to maintain our high level of service,” he said. “We had a good year with solid asset growth, significantly improved earnings and strong credit quality metrics.”
Central Bank of Kansas City (CBKC) has supported small businesses and individuals for over 70 years. Throughout the COVID-19 pandemic, the locally owned bank has supported its community by administering Paycheck Protection Program (PPP) loans, feeding senior citizens, supporting local classrooms and sharing financial education resources. Since 1998, CBKC has been proud to be a Community Development Financial Institution (CDFI). The CDFI Fund is a U.S. Treasury initiative to increase economic opportunity and promote community development investments for underserved populations and in distressed communities.
CDBA and 9 other banking trades last week sent a letter to Acting Comptroller Blake Paulson supporting his efforts to add more objectivity and transparency to the Community Reinvestment Act (CRA) framework while also asking that he formally withdraw the June 2020 OCC Rule or delay its January 2023 compliance date.
Through the CARES Act, Congress ordered the Small Business Administration and the Treasury Department to issue guidance to lenders to ensure that the loan program "prioritizes small business concerns and entities in underserved and rural markets." Yet a Reveal analysis of more than 5 million PPP loans found widespread racial disparities in how those loans were distributed. In the vast majority of metro areas with a population of 1 million or more, the rate of lending to majority-white neighborhoods was higher than the rates for any neighborhoods with Latino, Black or Asian majorities.
Quontic, a bank headquartered in New York City, refers to itself as an "adaptive digital bank." Ever since CEO Steven Schnall purchased the former Golden First Bank in 2009, the entrepreneur and former mortgage banker has been molding the bank to reflect his vision. "Part of the thesis when I bought the bank was that brick-and-mortar retail bank branches were ultimately going to die out, and people, consumers in particular, would want to bank online," he said. The bank, a certified community development financial institution (CDFI), started off with a focus on nonqualified mortgage lending, Schnall said.
The Federal Reserve will conduct a national survey of Community Development Financial Institutions (CDFIs) from March 22-April 23. Participating CDFIs will be asked questions about their capitalization, capacity and the impact of COVID-19 on their organizations, clients and communities. The Federal Reserve Board of Governors, Federal Reserve Banks and the CDFI Fund intend to use the survey data to inform research and policymaking. The survey data will also provide important benchmark information on how CDFIs are faring in the COVID-19 crisis and how they are serving low-income and minority populations. Finally, responses will be used to update a national CDFI directory for business, government, community leaders, investors and policymakers.
The current movement for racial reconciliation has raised awareness of the centuries-long wealth gap in America between whites and people of color—and of the role Black-owned banks can play to bridge it. Even if you don’t have a team of money managers or hundreds of millions to shift to Black-owned institutions, you can still start an account with a bank dedicated to investing in underserved communities. Banks mentioned include Carver Federal Savings Bank, City First Bank, First Independence Bank, and OneUnited Bank.
Citigroup Inc. said it will invest in digital mortgage offerings as part of its pledge to improve homeownership rates among communities of color. The push to digital comes as Citigroup said the rate of applications and originations it processed for Black and Hispanic consumers dropped last year, even as it increased for Asian homeowners. In response, the firm is also still planning to expand its community lending team and its network of correspondent lenders, it said. Citigroup has pledged $100 million to support minority deposit institutions in the U.S., which have seen their numbers dwindling in recent years. The firm’s already allocated almost half of that commitment to banks including Broadway Financial Corp., Mechanics & Farmers Bank and Optus Bank.
Valley Industry Association (VIA) has partnered with Mission Valley Bank and the Santa Clarita Non-Profit Leaders Network to form a proposal that has been sent to Congressman Mike Garcia (R-Santa Clarita) that would provide funds to ease debt for eligible businesses in return for service to better the community. If approved, the proposal would make funding available to eligible Santa Clarita Valley businesses in crisis. These businesses are expected to maintain a clean criminal record, provide service through pre-approved organizations and programs, and maintain their presence in the Santa Clarita Valley for the foreseeable future, according to the document sent to Garcia. In the aftermath of the COVID-19 pandemic, many Santa Clarita small businesses have been left with consequential amounts of debt, with few options on how to survive and bounce back.
Wells Fargo has made a new round of investments in Black-owned banks. The San Francisco company said it has invested in the $52 million-asset Carver State in Savannah, Ga.; the $572 million-asset Citizens Trust in Atlanta; the $287 million-asset First Independence in Detroit; the $765 million-asset Liberty in New Orleans; and the $183 million-asset Unity in Houston.