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Lower-income neighborhoods are plagued by disproportionately fewer bank branches, prompting some residents to turn to high-cost alternatives to obtain capital. Advocates say there is a viable option to help fill the void. In Buffalo, NY, some legislators are calling for the state to allocate $25 million to support CDFIs. "We want to see a statewide investment, an affirmative policy where the state is committing to support institutions that share this mission to serve low-income communities," said Andy Morrison, campaigns director for the New Economy Project. The small number of bank branches in low-income areas, he argues, underscores the need for state funding.
John Williams will move from the San Francisco Fed to take on the pivotal New York Federal Reserve president's position. Long rumored for the job, Williams will exit the president's post he held in San Francisco since 2011. As head of the New York district, he will oversee the important trading desk that helps set the Fed's key funds rate used as a benchmark for multiple types of consumer and bank debt. The appoitment comes with the Fed in the middle of some key operations in carrying out its mandate of skipping the economy at full employment and stabilizing inflation.
It has been 50 years since Lyndon Johnson signed the Fair Housing Act of 1968, a landmark law passed in the aftermath of Martin Luther King's assassination that banned discriminatory practices in housing. However, homeownership remains elusive for African Americans. Since the financial crisis, the average homeownership rate has fallen below 64%, not much higher than it was in the 1960s. While every racial demographic suffered as a result of the housing collapse, none suffered more than African Americans.
Black Americans experience dramatically lower upward mobility than white Americans do -- a difference that appears to be driven largely by significant economic disadvantages among black men. This conclusion comes from a groundbreaking study that combines Census Bureau data on race with IRS tax returns, which allows economists to track individuals' earnings over many years and tie them to their parents' earnings. The study compares intergenerational mobility, the degree to which children exceed or fall behind their parents economically, across different racial groups. This article from Vox highlights a few major takeaways from the new research.
The plight of the unbanked in the US' poorest regions is a modern-day scandal in the world's richest nation. This article highlights the work of Southern Bancorp as it seeks to address the problem. In a region that has become a financial desert, where banks have left or refuse to lend to the community because of rigid credit policies from headquarters many states away, Southern Bancorp has breathed life into the small-town communities of Arkansas and Mississippi. In 50% of its locations, it is either the only bank or one of two.
First Independence Bank chairman & CEO Kenneth Kelly has been appointed to the Federal Reserve Bank of Chicago's Community Depository Institutions Advisory Council. The council is comprised of 12 members who are industry leaders across the Midwest, currently representing portions of the five states in the Seventh Federal Reserve District – Michigan, Illinois, Indiana, Iowa and Wisconsin. Chairman Kelly will serve a three-year term on the council from 2018-2020. “I am grateful to be appointed to the Advisory Council to provide insight into our economy in Michigan and the current banking landscape,” said Kelly.
On March 22, the House of Representatives passed a $1.3 trillion, 2,232-page spending bill that would keep government agencies operating through September. The bill includes total funding for the CDFI Fund at $250 million, the highest ever received. The Bank Enterprise Award Program also received an increase in funding from $23 million to $25 million, which would greatly benefit CDFI banks. The Senate is expected to vote on the passage of the bill before the end of the week. If signed into law, this bill is widely expected to be the last major legislation that Congress will pass before the November midterm elections.
At a press conference on Wednesday, March 21 MS Governor Phil Bryant has named Cindy Hyde-Smith, the state's commissioner of agriculture and commerce, to the seat being vacated by retiring Sen. Thad Cochran on April 1. Hyde-Smith, a former Democrat who joined the GOP in 2010, is the first female senator in the state's history. She will serve until November, when a special election will determine who will serve the remainder of Cochran's term, which is set to expire in 2020. Read More >
There has been a recent surge in sales of larger community development banks. Last year, 34 banks with $1 - $10 billion in assets agreed to be sold, a 26% increase from 2016 and an over-50% increase from 2011. These deals hint at potential future mergers among bigger institutions, though disagreements over pricing can often delay or derail some deals. According to data from the FDIC the average bank is also getting bigger. Banks may find it challenging to grow organically, said Vincent Hui, who leads the M&A and risk management practices at Cornerstone Advisers.
New York-based Carver Federal Savings Bank, the last remaining black-owned bank in the City, the turns 70 this year. To commemorate the anniversary, President and CEO Michael Pugh was recently interviewed live on Nasdaq Spotlight to highlight the achievements of the institution. "We know it's important to be able to support low-to-moderate income communities. One example of how we do it at Carver is... financial education. We have a laser focus on this particular pillar as a critical part of our business model," said Pugh. "Over the past nine years, we have educated more than 15,000 people through financial education programs." Pugh also talked about the bank's recent sale of its Harlem headquarters and impending relocation to the top floor of a nearby building on East 125th Street.