News

| Monday, December 16, 2013

Three years after taking over the assets, deposits and mission of failed low-income neighborhood lender ShoreBank, Urban Partnership Bank is selling the converted movie theater in Chicago's South Shore neighborhood that served for decades as home to ShoreBank. The sale means Urban Partnership Bank will no longer have a physical presence in South Shore. Urban Partnership Bank CEO William Farrow commented that the bank continues to hold property in South Shore which he expects to eventually develop into a renewed presence in the neighborhood.

| Tuesday, November 19, 2013

The CDFI Fund has announced its FY 2013 Bank Enterprise Awards, including twenty six (26) awards to CDBA member banks which received a total of $6,849,561 – or 40% of all awards.

In all, eighty-five (85) banks received $17 million in awards. The CDFI Fund reported that they received 98 applications requesting $91 million. The number of applicants in this year's BEA Program round represents an increase of 38 percent over the prior year. It is the largest number of BEA Program applicants since FY 2002. The average award was $200,574 and the maximum award was $323,000. Among the 85 awardees, 38 were CDFI banks ($11.1 million – or 65% of awards) and 21 were minority depository institutions ($6.2 million – or 36% of awards).

CDFI banks were awarded $11,352,909. Of the 26 CDBA member awardees, nineteen received the maximum award of $323,000.

 

The CDBA congratulates the following members awardees: 

ABC Bank (Chicago, IL): $323,000 

Albina Community Bank (Portland, OR): $256,950

BankPlus (Belzoni, MS):  $323,000 

Broadway Federal Bank, f.s.b.  (Los Angeles, CA): $199,951 

Carver Federal Savings Bank     (New York, NY): $323,000 

CBMS: Community Bank (Ellisville, MS):  $86,655 

CBMS: Community Bank of Mississippi (Forest, MS): $88,777 

CBMS: Community Bank, North Mississippi (Amory, MS): $50,287 

Central Bank of Kansas City (Kansas City, MO): $254,792 

City First Bank of D.C., N.A. (Washington, DC): $323,000

Community Bank of the Bay (Oakland, CA): $323,000 

First American International Bank (Brooklyn, NY): $323,000 

First Eagle  Bank (Hanover Park, IL): $323,000 

First Security Bank (Batesville, MS): $39,649 

Guaranty Bank and Trust Company (Belzoni, MS): $323,000 

Illinois-Service Federal Savings and L.A. (Chicago, IL): $323,000 

International Bank of Chicago  (Chicago, IL): $323,000 

Metro Bank (Louisville, KY): $323,000 

Mission Valley Bank (Sun Valley, CA): $323,000 

One PacificCoast Bank, FSB (Oakland, CA): $323,000 

Pan American Bank (Melrose Park, IL): $323,000

Start Community Bank (New Haven, CT): $58,500 

Sunrise Banks, N.A. (St. Paul, MN): $323,000 

United Bank (Atmore, AL):  $323,000 

Urban Partnership Bank (Chicago, IL): $323,000

The Bank of Vernon (Vernon, AL): $323,000

 

| Thursday, November 14, 2013

Albina Community Bank's Lime Wind Project, a wind farm in eastern Oregon funded in partnership with Wells Fargo, has been highlighted in an Office of the Comptroller of the Currency (OCC) newsletter. Lime Wind is a local distributed-energy project run by a small operator for the benefit of the local community. It provides reliable, green power at rates at or below that of traditional sources. The Lime Wind transaction utilized $8.4 million in new markets tax credits (NMTC) allocation provided by Albina Equity Fund. 

| Monday, November 11, 2013

Former President Bill Clinton joined leaders of the W.K. Kellogg Foundation and the Winthrop Rockefeller Foundation in welcoming Darrin Williams and Dr. Glendell Jones, Jr. as the new CEO and Governing Board Chair of Southern Bancorp. President Clinton's message, delivered via video from New York, described how Southern is fulfilling the vision he and other founders had when they created the bank in 1986 to help generate long-lasting investments in rural communities. Representatives of the Winthrop Rockefeller Foundation and the W.K. Kellogg Foundation also congratulated the two for continuing to strengthen Southern's mission to invest in rural communities and empowering the individuals and businesses there to transform those communities for the better. 

 

| Wednesday, November 6, 2013

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November 6, 2013

Member News

Broadway Federal Bank Enters into Consent Order
Market Watch
(11-5-13)

Broadway Federal Bank, F.S.B. has entered into a consent order with the Office of the Comptroller of the Currency (OCC). The terms of the Consent Order coincide with an upgrade of the Bank's regulatory rating by the OCC. As part of the order, the bank is required to maintain a tier 1 (core) capital to adjusted total assets ratio of at least 9% and a total risk-based capital to risk-weighted assets ratio of at least 13%. Both ratios are greater than the respective 4% and 8% levels generally required under OCC regulations. The bank's regulatory capital exceeded both of these higher capital ratios at the end of each quarter during 2013. The consent order supersedes the Order to Cease and Desist the bank entered into with the Office of Thrift Supervision in 2010. Broadway Financial Chief Executive Officer Wayne-Kent Bradshaw stated, "We are pleased that the OCC has recognized improvements in the bank's financial condition and internal control processes by upgrading our regulatory rating in conjunction with its recent full regulatory examination."

Bank Kiosks Provide More Options For Residents in Underserved Communities
Time Warner Cable NY1 News 
(10-30-13)

New York City Housing Authority (NYCHA) residents are using new CashAccess bank kiosks, provided by Carver Federal Savings Bank, to cash checks and pay bills. The bank operates four of the machines, which look like ATMs. The kiosks charge fees comparable to those found at a check casher for bill payment services, wire transfers and NYCHA rent payments. “You don't have to get on a bus. You don't have to travel places to pay. It's right here,” said Jacqueline Picket, one of eleven NYCHA residents hired by Carver to help neighbors navigate the kiosks. Bank officials say they will be placing two additional machines in housing residences in the South Bronx and Brownsville in the coming year. Carver and their collaborators at NYCHA see the machines as part of a broader conversation about financial inclusion. “Over 40 percent of the folks who are using the machines have already opened a bank account, which is extraordinary,” said Carver CEO Deborah Wright.


Of Interest

CFPB Debt Collection Rules May Move in Unprecedented Direction
American Banker
(11-6-13)

The Consumer Financial Protection Bureau (CFPB) is considering new rules to govern debt collection practices that could--for the first time--include banks and other creditors that are collecting their own debt. The agency announced an advance notice of proposed rulemaking seeking public comments on regulating the multi-billion dollar debt collection industry. The CFPB rules may establish new restrictions on originating creditors, require accuracy of documents shared between all collection parties and update rules on how collectors communicate to consumers. Senior CFPB officials said creditors who originate and collect their own debt will be the most affected by the new rules since most existing regulations do not cover such firms. CFPB officials said they are currently looking at whether first-party creditors should be subject to the same restrictions as third-parties or face separate rules. The agency pledged to conduct small business panels, likely with debt collectors, and ensure new proposed disclosures are put out for comment before they are finalized.

Unmet Credit Demand of American Households

Federal Reserve Bank of New York
(11-6-13)

A survey administered by the New York Fed detected a large amount of unmet demand for credit among American households. Nineteen percent of households were found to have unmet demand for credit. Broken down by income, 28 percent of lower-income households had unmet demand, compared with 8 percent of high-income households. Thirty-seven percent of the unemployed had unmet demand, compared with 20 percent of the employed. The rejection rate for the lower-income group was nearly three times as high as that for the high-income group (32 percent versus 12 percent). The unemployed face rejection rates of 34 percent versus 22 percent for the employed. These discouraged borrowers also had the lowest average credit scores, suggesting that they have poor credit, are aware of it and are therefore not applying. Nearly half of all households are likely to apply for some type of credit over the next twelve months and virtually all those who were rejected in the past year are likely to apply for credit in the coming year. Furthermore, a large proportion of applicants who were approved in the past year are likely to apply for more credit in the coming year, suggesting they those households anticipate still more demand.

Chicago CDFI Veteran Calvin Holmes: Q&A
American Banker
(10-28-13)

Since 1998, Calvin Holmes has been president of the Chicago Community Loan Fund, a Chicago-based CDFI. In August, Holmes was appointed by President Barack Obama to the Community Development Advisory Board, which helps guide the Treasury Department's CDFI Fund. In an interview, Holmes spoke about his goals for the advisory board, his views on Community Reinvestment Act changes and the banking industry's role in supporting and utilizing CDFIs: "I'm hoping the fund can focus on how we create jobs and employment opportunities for this strata of Americans severely impacted [by the recession]... The [big banks] increasingly—given how their credit box has tightened—see CDFIs as instrumental in supporting [low- and moderate-income] areas. They see the opportunities to work with [CDFIs] to achieve measurable change in local markets and they seem to be taking it very seriously... Most folks are talking about changing the [CRA] assessment definition so that it's not about exactly where the bank has their branches or their deposits, but also where they make loans or provide credit. Many advocates agree upon the need to expand CRA to apply to mortgage and insurance companies, securities firms, large credit union and nondepository affiliates of banks."

The Lasting Impacts of Poverty on the Brain
The Atlantic Cities
(10-28-13)

New research has found that child poverty has a lasting negative impact on the brain. Researchers from the University of Illinois at Chicago, Cornell, the University of Michigan and the University of Denver followed children from the age of 9 through their early 20's. Those who grew up poor were more likely to have impaired brain function as adults. Poor children had more problems regulating their emotions as adults, regardless of income status at age 24. Over the course of the longitudinal study – which included 49 rural white children of varying incomes – these children were exposed to chronic sources of stress such as violence, family turmoil or low-quality housing. Those kinds of stresses, the researchers theorize, may help explain the link between income status in childhood and how well the brain functions later on. That theory, they write, is consistent with the idea that "early experiences of poverty become embedded within the organism, setting individuals on lifelong trajectories."


Jobs 

Consumer Financial Protection Bureau Seeks Debt Collections Program Manager (Washington, D.C.)
The debt collections program manager will research the Consumer Financial Protection Bureau’s strategy regarding the promotion and enforcement of fair debt collections practices in the consumer lending industry. The manager will monitor current and emerging issues related to all aspects of the debt collections and debt buying industry, including its business models, infrastructure, relationships with credit originators and compliance with the Fair Debt Collections Practices Act. In addition, this position will collaborate with the supervision and enforcement teams to design and establish registration, data collection and examination procedures and protocols and to identify key initial areas for rules development.
 
Community Health Center Capital Fund Seeks Portfolio Manager (Boston, Mass.)
The portfolio manager is responsible for providing a broad range of loan portfolio support. Responsibilities include monitoring loan fund accounts, tracking financial reporting and covenant compliance and conducting loan-related reporting. The portfolio manager will also monitor the construction process for health center capital development loans and analyze borrower financial statements. This position interacts closely with borrowers, lenders and other funding sources as well as with staff members at the firm’s affiliate organization, Capital Link. This position reports to the Director of Loan Programs.
| Wednesday, October 30, 2013

Oakland, California based Community Bank of the Bay has appointed a new chairman, Bill Purcell, and a new vice chairman, Gunter Unruh. The bank, led by President and CEO William Keller, also posted a third-quarter profit of $381,000, making this its seventh profitable quarter. "No money, no mission... We have made tremendous progress in the past few years and are now positioned to bring true relationship banking to an even broader market," said Purcell. Purcell says the bank will debut a new website in the months ahead and highlight what differentiates the bank from its many competitors. In the latest quarter, the bank set records in both loans and deposits. Community Bank of the Bay saw 21% year-over-year growth of deposits at the end of the third quarter, when deposits stood at $150.5 million. Loans rose almost $10 million to $129 million in the third quarter, up almost 30% from a year ago and up 8.3% from this year's second quarter.

| Wednesday, October 30, 2013

New York City Housing Authority (NYCHA) residents are using new CashAccess bank kiosks, provided by Carver Federal Savings Bank, to cash checks and pay bills. The bank operates four of the machines, which look like ATMs. The kiosks charge fees comparable to those found at a check casher for bill payment services, wire transfers and NYCHA rent payments. “You don't have to get on a bus. You don't have to travel places to pay. It's right here,” said Jacqueline Picket, one of eleven NYCHA residents hired by Carver to help neighbors navigate the kiosks. Bank officials say they will be placing two additional machines in housing residences in the South Bronx and Brownsville in the coming year. Carver and their collaborators at NYCHA see the machines as part of a broader conversation about financial inclusion. “Over 40 percent of the folks who are using the machines have already opened a bank account, which is extraordinary,” said Carver CEO Deborah Wright.

| Wednesday, October 30, 2013

CDBANewsflash - Low Rez For Email 2

October 30, 2013

Member News

Community Bank of the Bay Names Chairman, Posts Another Profitable Quarter
San Francisco Business Times
(10-29-13)

Oakland-based Community Bank of the Bay has appointed a new chairman, Bill Purcell, and a new vice chairman, Gunter Unruh. The bank, led by President and CEO William Keller, also posted a third-quarter profit of $381,000, making this its seventh profitable quarter. "No money, no mission... We have made tremendous progress in the past few years and are now positioned to bring true relationship banking to an even broader market," said Purcell. Purcell says the bank will debut a new website in the months ahead and highlight what differentiates the bank from its many competitors. In the latest quarter, the bank set records in both loans and deposits. Community Bank of the Bay saw 21% year-over-year growth of deposits at the end of the third quarter, when deposits stood at $150.5 million. Loans rose almost $10 million to $129 million in the third quarter, up almost 30% from a year ago and up 8.3% from this year's second quarter.


Of Interest

 

CDFI Fund Opens FY 2014 Funding Round for CDFI Program and NACA Program
CDFI Fund
(10-28-13)

The Community Development Financial Institutions Fund released its fiscal year 2014 Notice of Funds Availability for the CDFI Program and Native American CDFI Assistance Program. The Administration’s FY 2014 Budget for the CDFI Fund requests up to $191 million in Financial and Technical Assistance awards: $144 million for CDFI Program awards; $35 million for Healthy Food Financing Initiative Financial Assistance awards; and $12 million for NACA Program awards (subject to final appropriations). The new round will feature a number of changes intended to streamlining the application process. “With this round we are unveiling a redesigned application that will reduce the burden on applicants and streamline our process by improving the quality of information collected.” said CDFI Fund Director Donna J. Gambrell. The CDFI fund also announced it would once again be seeking public comment on CDFI Bond Guarantee Program Materials.

One Year After Sandy, Businesses Still Searching for Normal
Fox Business
(10-28-13)

Community development lenders have provided capital to communities attempting to rebuild after being devastated by last year's Superstorm Sandy. The U.S. government has provided direct assistance to more than 230,000 people and small businesses in the form of FEMA and SBA grants and loans alongside employment efforts by the Department of Labor. The administration has announced more than $39.7 billion in funding for those affected by the storm; approximately a third of that money has already been paid out. “The recession continues to create tight credit situations for small businesses,” says Mark Pinsky, president and CEO of the Opportunity Finance Network, a nationwide network of community development lenders. Combined with difficulty in accessing government grants and loans, many in the region have reached out to community lenders. “It’s critical when dealing with distressed or stressed markets,” says Pinsky

Microcredit for Americans
New York Times
(10-28-13)

Since the financial crisis, microcredit has taken off in the United States, attracting thousands of clients who do not qualify for credit cards or traditional bank loans. “Families in rural Africa are more like U.S. families than everyone wants to believe,” said Jonathan J. Morduch, the executive director of the Financial Access Initiative at New York University. Microlending in general has boomed, more than tripling the number of borrowers from 2008 to 2011, according to data collected by the Aspen Institute and Grameen America. Grameen, a leader in the microfinance field, has 18,000 borrowers and has lent more than $100 million. Grameen says that its loan recipients have increased their incomes by an average of $2,500 during each six-month loan cycle and that one in five hires an additional worker. Successful microlending also establishes good credit scores. People with poor or no credit must leave large deposits for basic needs like utilities, have trouble renting decent housing, pay much higher interest rates and have a harder time finding jobs.

The Future Of Home Finance: Who Will Qualify?
Ranieri Partners Management
(10-25-13)

A policy brief from Ranieri Partners Management argues that new mortgage regulations from the Consumer Financial Protection Bureau will stifle minority lending and fail to address the core causes of the financial crisis: "If the vast majority of lenders, as we expect, choose to originate only Qualified Mortgage loans that fall clearly inside the prescribed safe harbor and avoid making the QM loans that carry a rebuttable presumption, the QM rule will prove to have the unintended consequence of denying lower and moderate income potential borrowers access... Despite thousands upon thousands of pages of legislation and regulations already written, access to second mortgages remains largely unaddressed. Currently, there is no regulatory restriction on the simultaneous or subsequent creation of a second lien on the same property." Among their recommendations are more robust homebuyer education, personalized financial advising for mortgage borrowers, giving the owner of the original mortgage power of approval over a second mortgage and higher standards for the rationale of second mortgage borrowing.

High-Class Pawnshops Fill a Lending Void
Wall Street Journal
(10-23-13)

Collateral lenders—essentially high-end pawnshops—are a small but fast-expanding industry. Since 2008, as commercial banks have cut lending to small businesses, such alternative lenders have helped fill the void. Unlike traditional storefront pawnshops, which typically lend $100 to $150 to people hawking gold and other goods to fill their gasoline tanks or pay rent, these new high-end pawnshops typically operate with an online presence and a corporate office. Borrowers mail their objects or stop in by appointment with big items such as classic cars. In some states, collateral lenders can charge interest rates exceeding 200% annually. In New York, collateral lenders can charge as much as 4% a month, for a total of 48% a year. Texas allows collateral lenders to charge 240% annually. By comparison, Texas has an 18% annual cap on commercial loans below $250,000. On the upside for borrowers, there isn't a credit check and little paperwork. Borro is the largest of this new breed of collateral lenders, having lent nearly $100 million since opening in 2009.

Black and Hispanic Borrowers Likely to Be Hurt By Qualified Mortgage Rule
American Banker
(10-22-13)

Black and Hispanic borrowers may find it more difficult to obtain credit or end up paying higher prices when the qualified mortgage rule goes fully into effect. The Consumer Financial Protection Bureau, whose new QM rule takes effect in January, has temporarily ensured that it will not impact minority borrowers by allowing any government-sponsored loan to be considered a qualified mortgage. Once that provision -- which could be extended for up to seven years -- expires, many minority borrowers will no longer qualify for QM status. A recent Federal Reserve Board report found that 22% of home-purchase borrowers in 2010, including 33% of blacks and 31% of Hispanics, would not meet the new QM standard. In its report, the Fed did not criticize the QM rule, noting other factors should help keep credit available to low-income and minority borrowers. Responding to concerns that following the QM rule would lead to fair lending violations, a joint statement of five financial regulators, including the Fed and CPFB, stated that banks would not face fair lending claims as long as they comply with the laws and are "acting on the basis of their legitimate business needs."


Jobs

Consumer Financial Protection Bureau Seeks Debt Collections Program Manager (Washington, D.C.)

The Debt Collections Program Manager will research the Consumer Financial Protection Bureau’s strategy regarding the promotion and enforcement of fair debt collections practices in the consumer lending industry. The Manager will monitor current and emerging issues related to all aspects of the debt collections and debt buying industry, including its business models, infrastructure, relationships with credit originators and compliance with the Fair Debt Collections Practices Act. In addition, this position will collaborate with the supervision and enforcement teams to design and establish registration, data collection and examination procedures and protocols and to identify key initial areas for rules development.
 
Homewise - Multiple Positions (Santa Fe, N.M.)
Strategic Chief Financial Officer: Homewise, a non-profit housing organization whose mission is to help working New Mexican families become successful homeowners, seeks a Strategic Chief Financial Officer. A well suited candidate possesses a breadth of knowledge and ability to lead a progressive, innovative company specializing in real estate development, real estate lending, and real estate sales. Successful candidates will have a demonstrated proficiency in strategic, organizational and operational leadership and be able to identify issues and lead change in all three areas. The applicant must be able to expand and deepen our partnerships with third party investors and ensure organizational self-sufficiency.

Mortgage Loan Processor: Homewise seeks a Mortgage Loan Processor. This position requires gathering and analyzing a variety of loan documents in support of the loan approval decision. The Mortgage Loan Processor verifies the loan application is complete and meets established standards. Duties include ordering verification and follow-up related to those findings. The position requires the ability to manage a lending pipeline working toward a clear-to-close status of each loan in a timely manner. Successful applicants will be able to work independently, be highly organized, maintain strict attention to detail and be able to communicate effectively with team members.

| Wednesday, October 23, 2013

CDBANewsflash - Low Rez For Email 2

October 23, 2013

Member News

 
A Door Worth Walking Through
The Boston Globe
(10-22-13)

Columnist Steven Syre comments on the bankruptcy proceedings of Charles Street AME Church, currently seeking protection from the $5 million in loans it has been unable to repay to OneUnited Bank and other creditors. Syre writes that bankruptcy judge Frank Bailey's decision provides a road map to resolving the dispute by rejecting the church’s reorganization plan, but refusing the bank’s request to dismiss the bankruptcy case entirely. The judge turned down the Charles Street reorganization plan for several reasons, including the fact that its aggressive repayment schedule would keep the church and its congregation dangerously close to the financial edge for the next 20 years. According to Syre, successful resolution will depend on a reduction of debt from OneUnited, the church's willingness to sell some of its three other properties, Charles Street AME’s friends ability to raise money and a larger commitment on the part of the church’s umbrella organization, the First Episcopal District of Philadelphia, to become involved.

City First Foundation Presents Finance Summit
City First Foundation
(11-7-13)

The City First Family of Companies will be holding its inaugural finance summit, "The Resurgence of Neighborhoods: Fueling D.C.'s Economic Growth" on November 7, 2013 at the Omni Shoreham Hotel in Washington. The summit will focus on how small businesses, new housing options, increased transportation options and innovative financing are changing neighborhood dynamics, contributing to Washington's population growth and building the city's economic vitality. Speakers will discuss how the success of Washington's highly desirable neighborhoods can be replicated in underserved neighborhoods while avoiding gentrification that jeopardizes equity and cultural diversification. Attendees are encouraged to register here.


Of Interest

 
CDFI Fund Releases Application Demand for 2013/2014 Round of New Markets Tax Credit Program
CDFI Fund
(10-23-13)

The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) announced that it received a total of 310 applications in the 2013/2014 round of the New Markets Tax Credit Program (NMTC Program). The Community Development Entities that applied under the 2013/2014 round are headquartered in 43 states, the District of Columbia and Puerto Rico. Applicants requested an aggregate total of $25.8 billion in NMTC allocation authority. The NMTC Program encourages economic development in low-income and distressed communities by making tax credits available to Community Development Entities for targeted investments in eligible areas. 

Report on Small Business Lending Fund Participants’ Small Business Lending Growth
Department of the Treasury
(10-22-13)

A Treasury Department report found marked growth in small business lending among banks and loan funds participating in the Small Business Lending Fund (SBLF). In total, SBLF participants have increased their small business lending by $10.4 billion over a $36.5 billion baseline, and by $1.4 billion over the prior quarter. Increases in small business lending are widespread across SBLF participants, with 92 percent of participants having increased their small business lending over baseline levels. Most participants report that their small business lending has increased substantially, with 86 percent increasing small business lending by 10 percent or more. SBLF banks that refinanced Capital Purchase Program funding have increased business lending by a median of 43.7 percent since their initial receipt of funding from Treasury.

Boston, Minneapolis Mandate 'Responsible' Lending by Banks
American Banker
(10-22-13)

Boston and Minneapolis are forcing banks to make more loans in low-income neighborhoods, adding to the list of 10 other cities with "responsible banking ordinances" intended to correct what they see as shortcomings in federal rules. Laws passed in those two cities in the past month will require banks that hold municipal deposits to step up their lending activity in economically distressed neighborhoods. The banks will face losing the city as a customer if they don't meet minimum requirements. The ordinances also require banks to provide more data about the loans they make for affordable housing and to small businesses and nonprofits in economically depressed neighborhoods. Community development lenders have expressed optimism about the ordinances' ability to encourage development. "To the extent it [were to drive] other institutions to partner with us, it would make a difference," says Brian Argrett, president and chief executive of Washington's City First Bank of D.C. and CDBA Vice-Chair.

EBay Probed by Regulator Over Loans Pioneered by Payday Lenders
Bloomberg Businessweek
(10-22-13)

EBay Inc. is facing a probe by the Consumer Financial Protection Bureau over their Bill Me Later loan program that allegedly mimics a structure once used by high-interest lenders to evade state rules. The program, a service of EBay's PayPal unit, relies on Salt Lake City, Utah-based Comenity Capital Bank to make loans customers use for online purchases. The loans are then purchased and managed by EBay. Customers can avoid an annual 19.99 percent rate by paying off the loan before the end of a six-month promotional period. But if they pay later, they incur accumulated interest and fees that effectively raise the annual rate. A customer of the service, Kyle Sawyer, charged in a lawsuit that EBay worked with another bank, New York-based CIT Group Inc., to dodge the state’s interest-rate limits. The rates on Bill Me Later loans can exceed 100 percent, according to the suit. “PayPal... bought a program that structured a scheme to launder loans to evade state law,” the plaintiff’s lawyer, Jeff Friedman, said in a 2012 hearing.

J.P. Morgan Reaches $13 Billion Tentative Deal with Justice Department
Wall Street Journal
(10-19-13)

J.P. Morgan Chase has reached a tentative deal with the Justice Department to pay a record $13 billion to settle a number of outstanding probes of its residential mortgage-backed securities business. The deal doesn't resolve a continuing criminal probe of the bank's conduct, which could result in charges against individuals or the bank itself and possibly increase the penalty tab. The two sides continued to disagree over an admission of wrongdoing that would end the criminal probe and decided instead to resolve the civil allegations related to the mortgage securities. The deal includes $4 billion to settle claims by the Federal Housing Finance Agency that J.P. Morgan misled Fannie Mae and Freddie Mac about the quality of loans it sold them in the run-up to the 2008 financial crisis, another $4 billion in consumer relief and $5 billion in penalties paid by the bank. If completed, the deal would represent the largest settlement the U.S. government has reached with a single company.

Rural Banks Know Something Big Banks Don't
Bloomberg Businessweek
(10-17-13)

Several studies investigating the ideal size and location of banks found that small, rural banks make smarter loans. According to the FDIC, in every five-year period since 1991 a lower percentage of loans from community banks has gone bad. Richard Brown, the FDIC’s chief economist, says small banks have a competitive advantage with “nonquantitative” information—knowledge of their customers and the local economy. A 2012 St. Louis Fed paper, Small Business Lending and Social Capital: Are Rural Relationships Different?, found that loans from rural banks to rural borrowers were only 70 percent as likely to default as those from urban banks to urban borrowers. Ken Hale, CEO of the Bank of Montgomery, points to the importance of what economists call social capital: social relationships in small tight-knit communities provide controls on the banks. “You can’t be greedy,” he says. “You can’t be devious. Because I gotta go home every day and see my two neighbors.”


Jobs

 
CDFI Fund Seeks Reviewers (Upper Marlboro, Md.)
On behalf of the U.S. Department of the Treasury's Community Development Financial Institutions Fund (CDFI Fund), F2 Solutions is recruiting a large number of well-qualified individuals to serve as reviewers for the 2013-2014 CDFI New Markets Tax Credit (NMTC) Program application round. The NMTC Program allocates tax credit authority to Community Development Entities which in turn make investments in a variety of businesses and activities in low-income communities across America. Working independently and remotely, reviewers provide critical first-stage evaluation of applications.
 
Schwab Bank Community Development Seeks Senior Manager (San Francisco, Calif.)
Schwab Bank's Community Development division is responsible for fulfilling the Bank's obligations under the federal Community Reinvestment Act, developing and managing programs that help meet the lending, investment and service needs of low- and moderate-income populations and neighborhoods. Within this division, the Senior Community Development Analyst is responsible for portfolio management, underwriting support and special projects, including developing financial analyses to evaluate new products and programs.
| Wednesday, October 16, 2013

CDBANewsflash - Low Rez For Email 2

October 16, 2013

Member News

One PacificCoast Bancorp Completes Recapitalization of Albina Community Bank
The Oregonian
(10-10-13)

One PacificCoast Bancorp Inc. has completed its $8.75 million purchase of fellow CDBA member Albina Community Bank's stock. Albina had been under federal and state regulatory order since 2010 to raise more money and address its bad loans. Under the deal, Albina gets the infusion of capital that regulators ordered it to obtain. Though One PacificCoast now owns most of its stock, Albina will continue to operate under its name with separate management, existing staff and its own board of directors.

Bankruptcy Judge Rejects Charles Street A.M.E. Church’s Repayment Proposal to OneUnited Bank, Creditors
The Bay State Banner
(10-9-13)

Bankruptcy Judge Frank Bailey has rejected Charles Street A.M.E. Church's plan to repay about $5 million in debt to OneUnited Bank and its other creditors. The church had taken out a $3.6 million construction loan from OneUnited which became due on June 1, 2008. Despite a total of five extensions, the church was unable to satisfy its debt by Sept. 1, 2009. A year later, on Aug. 17, 2010, OneUnited sued the church for breach of contract. With about $5,000 in cash and running monthly operating deficits of as high as $20,000, Charles Street’s repayment plan relied heavily on completing its proposed Roxbury Renaissance Center, which would raise funds with rental income from hosting events. But none of the church's figures included repayment of the debt. Bailey’s ruling requires Charles Street to develop another repayment plan. It also requires a court-appointed examiner to monitor the church’s financial activities.


Of Interest

Ross Sees Chapter 11 as New Venue for Bank Acquisitions
Wall Street Journal
(10-15-13)

Wilbur Ross, whose Talmer Bancorp has agreed to invest $97 million to take over Capitol Bancorp's stakes in its four remaining banks, said Tuesday that such deals without government assistance are fast becoming the model for rescuing troubled banks. Capitol Bancorp, which filed for Chapter 11 protection in August 2012, once operated 64 small banks in areas that were particularly hard hit when the nation's housing bubble burst. In recent months, the FDIC seized five banks owned by Capitol. The deal with Talmer Bancorp will keep Capitol's four remaining banks--Bank of Las Vegas, Indiana Community Bank, Michigan Commerce Bank and Sunrise Bank of Albuquerque--out of Chapter 11. Mr. Ross's private equity firm has purchased a number of struggling banks, including BankUnited, Sun Bancorp and Amalgamated Bank in recent years.

Fed Supervisory Head: Regulators Realize the Need for Community Banks
American Banker
(10-10-13)

In an interview with American Banker, Julie Stackhouse, head of supervision at the St. Louis Fed, discusses community banking institutions: "I learned that there's a need for community banks. Maybe that was one of the things that so many of us questioned, especially in light of a lot of the regulation that's been introduced in the last few years. It is clear that community banks... meet lending needs that are often tailored to their communities... There are many challenges ahead for community banks. The number of lending opportunities is diminishing as others get to compete for their traditional loans. We introduced regulation — and community banks don't know how to respond. And I can say with certainty that we will see additional consolidation in community banking in the years ahead... We're doing a massive overhaul of our basic examiner commissioning program, to modernize it... We want to build a program we can maintain and update all the time as changes occur."

Supervisory Expectations for Appraisal and Evaluation Programs
Community Banking Connections
(10-1-13)

A Community Banking Connections report gives an overview of the Federal Reserve examiners' typical community bank appraisal and evaluation review process. Examiners tailor their reviews to the individual banks and their transactions. They consider the size, complexity and nature of a bank’s real estate-related activities. Examiners also review an appraisal to determine whether their methods, assumptions and value conclusions are reasonable and whether the appraisal supports the bank’s credit decision. The most common appraisal regulation violations cited during examinations include failure to obtain an appraisal, failure to obtain an evaluation for exempt transactions, failure to use a state-licensed or state-certified appraiser, failure to meet the appraisal regulations’ minimum appraisal standards and failure to maintain appraiser independence. The report recommends banks review their appraisal procedures, consider organizational changes that promote accountability, improve loan file documentation and maintain a comprehensive appraisal review process.

Comparative Advantages: Creating Synergy in Community Developments
Federal Reserve Bank of San Francisco
(9-1-13)

A working paper from the Federal Reserve Bank of San Francisco explores how Community Development organizations can collaborate effectively. The Obama administration has introduced a series of crosscutting initiatives that require a diverse range of community-based institutions and expertise. These crosscutting initiatives require the participation of multiple organizations, as individual organizations generally do not have the specialized expertise or breadth necessary to implement the policies. The authors find that analyzing the comparative advantages of different types of organizations is a helpful approach for successful collaboration. The paper also includes examples of effective partnerships and a discussion of the implications of comparative advantages for community development. The authors identify several activities that lend themselves well to collaboration and resource-sharing including neighborhood engagement, project development, project management, fundraising and development of performance criteria.


Jobs

Responsible Endowments Coalition Seeks Executive Director (New York, N.Y.)
The Responsible Endowments Coalition works for social change and corporate accountability through responsible investment of university endowments. The Executive Director will provide leadership toward the achievement of the coalition's mission. She or he will achieve the strategic aims of the Responsible Endowments Coalition through the planning and implementation of annual and long-term objectives and the management staff. The Executive Director reports to the Board of Directors.
 
National Community Reinvestment Coalition Seeks Executive Director (Washington, D.C.)
The Executive Director of the National Community Reinvestment Coalition will be the fund's entrepreneurial leader, primary fundraiser and manager. She or he will develop broad strategic plans and annual work plans, setting priorities for initial lending activities and supervising the fund's staff. The Executive Director will be the public face of the National Community Reinvestment Coalition at trainings, forums, press events and conferences. This position will report to the coalition's Board of Directors and to the Chief Community Development Officer.

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