News

Chicago Tribune | Tuesday, April 15, 2014

Chicago Mayor Rahm Emanuel has announced a new $26 million loan pool led by Community Investment Corp. and backed by lenders including First Eagle Bank. The fund seeks to increase the supply of affordable units in Chicago communities by enticing local investors to buy abandoned rental buildings. Community Investment Corp. will vet developers with proven track records to take on projects in which renovation costs far outweigh property value. When the rehab is complete the investor will receive a 10-year loan. 11 area banks, including First Eagle, back the loans. "It's hard to get conventional money into the neighborhoods... We've done some (loans), we'd like to do more," said Andy Salk, president and CEO of First Eagle Bank.

American Banker | Monday, April 14, 2014

Senate Banking Committee leaders may delay the April 29 vote on their mortgage finance reform bill as they struggle to secure additional votes. Chairman Tim Johnson (D-S.D.) and Ranking Member Mike Crapo (R-Idaho) are said to be trying to attract as many as four more votes. The situation has even sparked rumors about whether the original coalition of committee members from both political parties remains intact. Johnson and Crapo's bill would eliminate Fannie Mae and Freddie Mac and create a new housing finance system. But the bill, which would preserve a government guarantee for the mortgage market in the event of catastrophic losses, needs more support from Democrats to have enough momentum to make it to the Senate floor this year ahead of the November elections.

Financial Times | Sunday, April 13, 2014

Facebook is readying itself to provide financial services in the form of remittances and electronic money in Europe. The social network is only weeks away from obtaining regulatory approval in Ireland for a service that would allow its users to store money on Facebook, using it to pay and exchange money with others. Facebook would issue units of stored monetary value that represent a claim against the company. This e-money would be valid throughout Europe. Facebook has also discussed potential partnerships with at least three London start-ups that offer international money transfer services online and via smartphones.

American Banker | Friday, April 11, 2014

Regulators' recent signals that they are planning changes to Community Reinvestment Act exams have reignited speculation about possible alterations. Comprehensive refor appears unlikely, but observers see potential for limited action. Changes may include crediting community-related activities done outside a bank's market and broadening the section of the exam focused on branch offerings. Regulators may also heighten the focus on products that specifically benefit low income borrowers and expand the list of community service activities eligible for CRA credit. Other reforms may include awarding credit for initiatives that improve healthcare in low income areas and adding more detailed data to exams about how products benefit low income customers.

Finance & Commerce | Friday, April 11, 2014

Finance & Commerce has named Sunrise Banks among the recipients of their Progress Minnesota Award. The award recognizes Minnesota businesses that have shown exemplary creativity, drive and commitment to their causes. Sunrise focuses on economic development in the Twin Cities’ underserved communities with a concentration on Hmong and Somali neighborhoods. “Our brand, from that standpoint, has grown from specifically serving a geographic area to more of a people-based and place-based strategy,” said Sunrise CEO David Reiling.

Washington Post | Friday, April 11, 2014

Payday lenders say big banks are denying them service at the behest of federal regulators. The banks, they contend, are threatening to cut them off unless they stop offering payday loans. In one e-mail publicized by Sen. David Vitter (R-La.), a banker cited regulatory action in a decision to deny credit to a payday lender: “Based on your performance, there’s no way we shouldn’t be a credit provider. Our only issue is, and it has always been, the space in which you operate. It is the scrutiny that you, and now that we, are under.” Federal regulators deny compelling banks to sever ties with the lenders, although regulators have told banks that doing business with companies that inflict such harm could damage a bank’s reputation and leave it vulnerable to litigation. 

Washington Post | Wednesday, April 9, 2014

A newly discovered security bug nicknamed Heartbleed has exposed millions of usernames, passwords and credit card numbers — a major problem that hackers could have exploited during the more than two years it went undetected. Unlike most security breaches, which affect a single website or organization, this flaw affects code used across the web to keep servers secure. The bug could affect thousands of websites including online banking portals, marketplaces and social media sites. A fix has been circulated, but it is unclear how quickly and widely it was being implemented. Use this page to test whether a website is at risk. Technical information can be found here.

CBS News | Wednesday, April 9, 2014

A new report by Pew Charitable Trusts finds that nearly half of banks, including four of the nation’s five largest, still "reorder" checking account transactions -- a practice that can dramatically increase overdraft fees by processing larger withdrawals first, leaving smaller transactions to pile up fees. The practice is particularly onerous for low-income consumers who are unable to maintain high average balances. The study also found that an increasing number of banks are imposing new limits on consumer rights when resolving disputes and that one-third of big banks have yet to adopt summary disclosure graphics to cut through confusing checking account agreements that average 44 pages.

Wall Street Journal | Wednesday, April 9, 2014

The White House is reviewing individuals with community banking experience for an open seat at the Federal Reserve Board. Administration officials have mentioned Ann Marie Mehlum and Rebeca Romero-Rainey as potential candidates. Ms. Mehlum, who currently works for the Small Business Administration, previously served as the chief executive of Summit Bank in Eugene, Ore. Ms. Romero-Rainey is the chief executive of the Centinel Bank of Taos in New Mexico. Senate Banking Committee members from both sides of the aisle, including Sens. Heidi Heitkamp (D-N.D.) and Mark Kirk (R-Ill.), have also urged President Obama to fill at least one of the vacant seats on the Fed with a community banker to increase the diversity of experience on the seven-member board.

Wall Street Journal | Wednesday, April 9, 2014

A new study by the FDIC found steadily improving trends for small community banks. According to the report, the number banks with assets between $100 million and $1 billion in assets has actually increased since 1985, but the number of banks with under $100 million has declined. Much of that decrease was due to consolidations and mergers. The pace of consolidation has steadily increased since 2010, when Congress passed the Dodd-Frank law. Richard Brown, chief economist at the FDIC, said the slowed-down real-estate market and low interest rates have been squeezing community banks that rely on mortgage lending and net interest income for their revenue.

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