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As President Biden continues to select hundreds of key personnel to serve as the new administration, one crucial seat remains open: the next comptroller of the currency. The person who fills this role will have a profound impact on the entire banking industry over the course of their term. But there are two groups of financial institutions that have a particularly large stake in the game — community development financial institutions (CDFIs) and minority depository institutions (MDIs). But to keep this mission ongoing, it will require stronger partnerships between financial institutions and fintechs. The future leader of the Office of the Comptroller of the Currency will also play a critical role in this area since the OCC was the first bank regulator to push forward in recognizing fintechs as a part of the banking world — an effort that was supported by OCC leaders of the previous two administrations.
Fernando Tatís Jr. was 18 years old, just a low-level prospect from the Dominican Republictrying to work his way up in the San Diego Padres farm system, when he made a financialdeal that would impact his entire baseball career. And it wasn't with the Padres. Tatís signed a contract with Big League Advance, an unusual investment fund that paysminor-league players money up front in exchange for a share of their future MLBearnings. Tatís, now 22 and widely viewed as one of the sport's best young stars, today knows whatthose earnings will be. He agreed to a record-setting 14-year contract with the Padres onWednesday night worth an eye-popping $340 million, the third-highest total in MLBhistory. His new contract also creates a significant obligation for Tatís: to pay a sizable chunk ofhis new bounty—perhaps close to $30 million—to Big League Advance.
The Federal Deposit Insurance Corporation (FDIC) today named Sultan Meghji as the agency's first Chief Innovation Officer, charged with leading the FDIC's efforts to promote the adoption of innovative technologies across the financial services sector. Mr. Meghji co-founded Neocova, a financial technology firm providing secure, cloud-native, artificial intelligence-based software for community banks and credit unions. In addition, he worked on an aid mission to help implement digital banking in Kenya, Tanzania, and Uganda, and worked with fintechs and central banks to create peer-to-peer banking solutions for hundreds of thousands of people in underserved areas of Africa and Central Asia.
City First Bank is pleased to announce that Sonja Sanders Wells has been promoted from Senior Vice President, Interim Chief Lending Officer to Executive Vice President & Chief Lending Officer (CLO), leading the commercial banking group. Sonja Wells is the only African American woman to hold a CLO position at a bank in Washington, DC. In fine tradition, Ms. Wells follows in the trailblazing footsteps of City First’s selection of its first CLO, Ms. Kim Saunders in 1998, alongside the founding President & CEO, Ms. Debbi Baptist Hurd -- rare Black women executives positioned in the C-suite echelon of the banking industry.
An NBC News analysis last year of PPP data, census records and a leading economic distress indicator show that struggling American communities received less from the PPP program proportionally than the country's wealthier and more vibrant neighborhoods. Economically distressed communities — in which minorities make up a greater share of the population than more prosperous communities — fared worse than the country's wealthiest communities when it came to getting Paycheck Protection Program loans. Shortly after the PPP got more funding from Congress in late April, the SBA began to position CDFIs as the ticket to reaching minority small-business owners. The second infusion of capital, which came in April, allocated $10 billion in PPP loans for CDFIs alone. When the second round reopened last month, CDFIs were given the first draw of funds from the SBA.
For the second time in his career, entrepreneur Ken LaRoe decided to start a bank after being inspired by a book he read. This time it was "Drawdown" by Paul Hawken, and the new bank LaRoe seeks to open, to be called Climate First Bank, would enact some of the environmental principles it lays out. LaRoe chose Finastra as his primary tech partner based on its commitment to climate change as well as its ease of use and overall customer experience. The bank is expected to open in St. Petersburg, Fla., in May, provided it receives the necessary federal and state approvals, LaRoe said. In an interview, LaRoe shared how he plans to incorporate environmental principles at his new bank and how and why he chose the new company's core system.
Black-owned businesses were among the last to receive paycheck protection loans last year. Now, some businesses are turning to banks that specialize in working with Black and brown customers. Carver State Bank, was founded 94 years ago with a goal of building financial freedom for its African American customers. Eighty percent of its loans go to Black-owned businesses. Robert James, who sits on the bank's board, says he received PPP applications from around the country, most looking for less than $50,000.
Visa Inc is teaming with Boston-headquartered OneUnited Bank, the nation's largest Black-owned bank, on a campaign designed to mitigate the racial wealth gap. What Happened: The new OneTransaction Campaign will encourage Black families to select one financial goal to accomplish in 2021 while providing strategies for achieving that goal. That transaction could range from improving a credit score, setting up an investment portfolio or an automatic savings account, taking out a life insurance policy or writing a will. The campaign will culminate with a virtual financial conference held on June 19, the Juneteenth holiday, featuring experts in business and personal finance, including Washington Post personal finance columnist Michelle Singletary, "Shark Tank" star Daymond John and Pulitzer Prize-winning journalist and radio talk show host Karen Hunter.
NCIF invited 10 partner CDFI and Minority Banks to identify small business customers that are integral to their local communities and needed support to sustain their respective businesses through the pandemic. NCIF used over $100,000 of its own funds to pilot an unrestricted microgrant program as gap funding to these customers. Our first batch of microgrants was given to social entrepreneurs, retail businesses, community facilities, affordable housing organizations, arts nonprofits, and other small businesses across the country. These CDBA members are First Southwest Bank, Carver Federal Savings Bank, City First Bank of DC, Community Bank of the Bay, First Eagle Bank, Industrial Bank, Native American Bank, Providence Bank & Trust, Southern Bancorp, and United Bank.
Of the roughly 30 million small businesses in the United States, 22 million are individually operated, meaning the owner is the sole employee, according to the U.S. Chamber of Commerce. There are few concrete numbers for how many of those businesses have permanently closed in the past year, but some early estimates have put the figure anywhere from 80,000 to 160,000. It will likely take years for the full extent of damage from the pandemic to be felt in the broader economy. The pandemic has shaken even the most prepared business owners, and nonwhite business owners have been hit especially hard. If the incoming Biden administration and the banking sector want the country to bounce back from this crisis, there will have to be a renewed focus on how we approach small-business credit in general, and how we foster nonwhite business creation in particular.