News
A series of internal memos document how the Consumer Financial Protection Bureau struggled internally with how to end discrimination in auto lending. At the core of the debate was the practice of dealer markup, in which the dealership keeps the difference between the rate set by the lender and the one agreed to by the borrower as its compensation. The bureau debated whether it should cite a large lender in the hope of effectively ending the ability of partnering dealers to mark up loans with all lenders. On multiple occasions, CFPB officials suggested to forgo rulemaking and instead use a few high-profile enforcement actions against large auto lenders to do away with dealer discretion, thereby significantly curbing potential discrimination.
All CDFI banks interested in the FHA Small Building Risk Sharing (SBRS) program are invited to join our SBRS program webinars. The SBRS program promotes multifamily housing project financing by providing lenders a 50% risk sharing arrangement with HUD. This webinar series consists of two sessions led by SBRS Initiative expert Diana Talios of the FHA. The first webinar (October 6, 2015) is an overview of the initiative including eligibility requirements, the application process and other timelines. The second webinar (October 20, 2015) will delve into the fine detail of the application process for banks that are considering applying. The webinars are free to employees of CDBA member banks and $75.00 for registrants from non-member banks.
The CDFI Fund has announced five free webinars provided as part of the Capacity Building Initiative's "Expanding CDFI Coverage in Underserved Areas" series. The webinar series is intended to address the gaps in CDFI service coverage in underserved communities and will cover training topics developed for the series' in-person training sessions. The webinars are Expansion Strategies for Growth, Part One: Operational Efficiencies (October 6, 2015), Using Market Analysis for Expansion (October 27, 2015) Expansion Strategies for Growth, Part Two: Technology, People, Culture, and Leading Organizational Change (November 17, 2015), Marketing Strategy, Tactics, and Storytelling (December 8, 2015), Understanding CDFI Impact (January 12, 2016).
Dominik Mjartan, CEO of Southern Bancorp Community Partners hopes to level the economic playing field for the underserved. Mjartan said success should not be determined by ZIP code. Living in Helena-West Helena -- a place where Southern is active in economic development -- shouldn't mean people there can't be upwardly mobile. Southern Bancorp makes about $56 million a year in loans in Helena-West Helena’s Phillips County. In the last three years, Southern invested an additional $3 million focused on job creation and downtown revitalization. “To us, profit is a secondary focus," Mjartan said. "That's not to say it's subordinate. We see profit as a means to accomplish our mission." He said, "Southern makes capitalism work for folks who don't have access to capitalism."
Sunrise Banks of Minneapolis, Minn. won a $2.2 million NEXT Opportunity Award to expand TrueConnect, its small-dollar, affordable employer-based loan. The Wells Fargo NEXT Awards for Opportunity Finance support innovations that transform how the unbanked and underbanked access responsible personal financial products and services. Sunrise Banks' convenient alternative to predatory loans integrates with employers’ payroll systems through the bank's proprietary software. Sunrise has successfully piloted True Connect with three employers and plans to expand the product. “The NEXT award will help bring TrueConnect to scale nationally and offer a safe loan alternative for those 26 million Americans who do not have a credit score,” said David Reiling, Sunrise Banks CEO.
Doyle Mitchell, CEO of Industrial Bank of Washington, D.C., testified before the United States House Committee on Small Business Subcommittee on Economic Growth, Tax and Capital Access. His testimony focused on the impact of community bank regulatory burdens such as Dodd-Frank on small business lending. “The exponential growth of regulation in recent years is suffocating community banks’ ability to serve their small business customers," Mitchell said. "Compliance has become a major distraction for community bank managers. Any community banker will tell you that their job has fundamentally shifted from lending and serving customers to struggling to stay on top of ever-changing rules and guidance.”
In a new report, Opportunity Finance Network writes that the financial and portfolio performance of CDFIs is on par with those of conventional banks. In their analysis, based on a dataset of 209 OFN member CDFIs (predominantly loan funds), CDFIs averaged 15 percent loan growth per year. Their cumulative net loan loss rates were 1.5 percent -- on par with that of FDIC-insured institutions. The members have been responsible for over $35 billion in cumulative financing, development of 1.5 million housing units and the creation of 721,000 jobs. The CDFI lending was also highly targeted at underserved populations: 75 percent of CDFI clients are low-income, 52 percent are minority and 48 percent are female.
CDBA members and CDFI banks as a whole had a record year accessing Bank Enterprise Awards (BEA) and CDFI Program awards. Of the 83 banks receiving BEA funding, 67 were CDFI certified and 42 were CDBA members. This year’s BEA also continued a trend toward more prizes for community banks; 98% of the $18.1 million awarded went to banks with assets of less than $10 billion. CDFI banks also had a record year accessing the CDFI program awards. The 12 banks and bank holding company awardees received awards totaling $14.4 million (9 percent of the total awards), the largest amount ever awarded the CDFI banking industry. Eleven of the 12 banks and bank holding companies that received CDFI Program awards were CDBA members.
Community Bank of the Bay is supporting research into sustainable deep sea habitats by sponsoring the Marine Applied Research & Exploration (MARÉ)'s 3rd Annual MARÉ Soirée. Community Bank of the Bay's partnership with MARÉ is part of the bank's Bay Area Green Fund, which offers bank accounts that support financing of local and environmentally sustainable projects and businesses. "When I launched MARÉ in 2003, an accountant at Save the Bay recommended Community Bank of the Bay as a nonprofit-friendly bank that also gives back to the community," says MARÉ Executive Director Dirk Rosen. "Over the years, they've offered stellar customer service, helped us grow and shared our commitment to a healthy, sustainable environment. We couldn't ask for a better partner and are proud to be a part of their conservation efforts."
OneUnited Bank is among a new wave of banks using innovative technology to redefine the bank branch experience. OneUnited President Teri Williams says the changes made at OneUnited have made the branch both a place of business and a meeting place for the community. “A lot of people are going in when there’s a problem or an opportunity,” Williams said. “Because of the decrease in the middle – the day-to-day transactions – banks are repurposing their branches.” Now, OneUnited’s branch in Liberty City, Florida is used as a community resource center. The branch hosts community events and fundraisers as well as financial literacy classes, Williams said, which in turn attract more customers to the branch.