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 that meet the unique needs of poor rural communities, their residents are susceptible to predatory lenders."
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 make money. The Office of the Comptroller of the Currency is now considering a special designation for school branches, which would pave the way for 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 together and we can go places that we never thought we could before."
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 community borrowers to build businesses and revitalize business districts in Detroit’s neighborhoods," said Brian Berg, Director of Communications for Urban Partnership.
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 oriented community banks will allow us to better serve our customers in south Alabama and the Gulf South Region.”
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 realities have forced many entrepreneurs who hoped to replace banks, such as Simple, to scale back their ambitions and partner with existing banks.
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 that the community banking industry's overall profit suffered a 7.6% decline from its year-earlier total, although interest income growth, net interest margin and loan growth all outpaced the industry as a whole.
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 Pierce, a Justice Department spokeswoman, said banks are breaking U.S. law if they knowingly process illegal transactions or are "willfully ignorant" of fraud.
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 advocates are optimistic that the ruling will provide an unambiguous method for states to take legal action against the lenders.
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 company's new factory.