News
Rep. Mike Johnson, R-La., secured the votes to be elected speaker Wednesday as the roll call was still underway.
It will bring to an end more than three weeks of disruption after the unprecedented removal of the former speaker, Rep. Kevin McCarthy, R-Calif., on Oct. 3.
Johnson was the fourth nominee for speaker this month, but the only one who could secure a House majority.
This Tuesday, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively, the agencies) released a final rule to "strengthen and modernize their regulations implementing the Community Reinvestment Act (CRA)."
While the revisions remain complex, and are certain to be controversial, several changes are positive for CDFI-certified banks and their communities. These include the following:
- Specific nationwide "community development" consideration for activities conducted with CDFIs, including CDFI banks. This includes activities conducted by CDFI banks with other CDFI depositories, minority depositories (MDIs), low income credit unions (LICUs) and woman-owned depositories (WDIs). Previously, the rule only specified MDIs, WDIs, and LICUs.
- Specific consideration for activities conducted with CDFIs, including CDFI banks, as "responsive" under the Retail Services and Products Test.
- Special Purpose Credit Programs (SPCPs) are also specifically "responsive" under the Retail Services and Products Test.
- Increased thresholds for bank size standards: Large: $2 billion or more. Intermediate: $600 million to $2 billion. Small: under $600 million.
- Small banks will have the option to remain under the existing lending test.
- Deposit data reporting requirements for "large banks" will only apply to a subset with assets greater than $10 billion.
CDBA will work over the coming days to provide a comprehensive summary of changes with particular relevance to CDFI banks and their communities.
"Today, the Consumer Financial Protection Bureau (CFPB) proposed a rule that would accelerate a shift toward open banking, where consumers would have control over data about their financial lives and would gain new protections against companies misusing their data. The proposed Personal Financial Data Rights rule activates a dormant provision of law enacted by Congress more than a decade ago.
It would jumpstart competition by forbidding financial institutions from hoarding a person's data and by requiring companies to share data at the person's direction with other companies offering better products. The proposed rule would allow people to break up with banks that provide bad service and would forbid companies that receive data from misusing or wrongfully monetizing the sensitive personal financial data."
"The New Haven Bank is opening its second branch this fall. The new branch will open at 636 Campbell Ave. in West Haven. Maureen A. Frank, President and Chief Executive Officer, told the Hartford Business Journal that the new branch will be open either later this month or in early November."
"Lawmakers and representatives of the community development financial institutions, or CDFIs, bemoaned potential obstacles and cuts to government funding of those institutions during a Senate Banking Committee hearing.
A Biden administration proposal to overhaul the certification process for CDFIs — as well as potential cuts to the CDFI fund proposed by some Republican lawmakers — came under fire at a Senate Banking subcommittee hearing on Tuesday. Lawmakers on both sides of the aisle were broadly supportive of the public mission of CDFIs, and pushed back on any incursion into their funding or certification."
On October 17, the Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on Housing, Transportation, and Community Development met to conduct a hearing entitled, 'How Community Development Financial Institutions Promote Housing and Economic Opportunity.'
The witnesses included representatives of CDFIs focused on serving rural and native communities. CDBA member United Bank (AL) was called out by Senator Britt (AL) as an example of CDFI excellence. Senator Britt begins speaking at 01:21:03 in the linked video above.
"Though banks have recently been churning out their highest profits in more than a decade, there's trouble brewing beneath the rosy performance metrics, according to the consulting firm McKinsey.
The threat is largely tied to the ongoing shift of balance-sheet activities and transactions away from traditional banks to nonbank institutions, McKinsey warns in its 2023 annual review of global banking. That migration has gained such scale that banking is now at 'a tipping point' that could 'fundamentally alter the nature' of the industry, the McKinsey report states."
"Community development financial institutions (CDFIs) are vital investors in cities across America, but could they have a greater impact if they better pulled in dollars from public finance sources?
As long-standing lenders with a mission, CDFIs specialize in providing loans to individuals, organizations, and businesses in under-resourced or disadvantaged rural and urban communities often underserved by mainstream banks. They also provide other forms of fair, responsible financing that further economic potential. CDFIs can also function as trusted intermediaries that invest in a wide range of important sectors like housing, infrastructure, small businesses, and others."
"CFPB recently analyzed the non-sufficient fund (NSF) fee practices of a number of banks and credit unions. NSF fees are charges that some financial institutions impose when they decline to make a payment from a consumer's account, like a check or electronic authorization, after determining the account lacks sufficient funds. NSF fees are distinct from overdraft fees, which financial institutions charge when they pay, rather than decline, a payment when the account lacks sufficient funds."
"The changing economic environment is opening a window of opportunity for banks and credit unions to put their artificial intelligence models for loan underwriting through a credit cycle.
The digital banking evolution in the past decade has significantly enriched data around consumer profiles and behaviors. It has incubated a group of financial technology vendors to develop AI underwriting models for banks and credit unions. Since most of them were established in a benign environment, early adopters are now looking to validate their AI models in the current dynamics with the downside risks leading to credit deterioration being high."