News
At a time when many Native Americans struggle to secure mortgages from mainstream institutions, Oklahoma City-based Bank2 is fighting for greater financial inclusion. According to 2014 Home Mortgage Disclosure Act data, Bank2 made $38 million in home loans to Native Americans in 2014. That ranks it among the top 20 in mortgages to Native Americans in the country. Bank2 has the highest volume of mortgages to Native Americans of any Native-owned financial institution by a significant margin. More than half of its total mortgages (220 out of 426) were to Native Americans. Native communities face significant problems accessing the mortgage market. For instance, while Anchorage, AK has the highest proportion of Native Americans of any U.S. city at 12.4 percent, only 4.8 percent of mortgages went to Native Americans.
The CDFI Fund has opened the FY 2016 application period for the CDFI Bond Guarantee Program. Up to $750 million in bond guarantee authority will be made available to eligible CDFIs in FY 2016. Through the CDFI Bond Guarantee Program, selected CDFIs or their designees issue bonds that are guaranteed by the Federal government and use the bond proceeds to extend capital for community development financing and investments. Authorized uses of the loans financed through bond proceeds include a variety of financial activities targeted at revitalizing low income communities. The deadline for Qualified Issuer Applications is March 4, 2016. The deadline for Guarantee Applications is March 18, 2016.
Millennials have become heavy users of alternative financial services, primarily payday lenders and pawn shops. A joint study from PwC and George Washington University found that 28 percent of college-educated millennials (ages 23-35) have tapped short-term financing from pawn shops and payday lenders in the last five years. Many of these borrowers resort to alternative lenders even though they have other options to access cash; 35 percent are credit card users and 39 percent have bank accounts. The study paints a bleak picture of millenials' financial situation -- more than half (53 percent) carried a credit card balance in the last 12 months, while nearly 30 percent are overdrawing their checking accounts. Half of the millennials could not come up with $2,000 if an unexpected need arose in the next month.
The 2016 National Interagency Community Reinvestment Conference hosted by the federal banking regulatory agencies, the Federal Reserve Bank of San Francisco and the CDFI Fund will be held in Los Angeles from February 8 to 10. This biennial conference will feature discussions regarding innovations in community development policies and practice, CRA examination training and community development tours of Los Angeles. The conference agenda includes keynote presentations by Comptroller of the Currency Thomas J. Curry, FDIC Chairman Martin J. Gruenberg, Acting Assistant Secretary for Financial Institutions of the U.S. Department of Treasury Amias Gerety, President of the San Francisco Fed John C. Williams, and CDFI Fund Director Annie Donovan. Register for the event here.
CDFI banks--including Southern Bancorp, Spring Bank and Sunrise Banks--are innovating with new payroll lending programs. These small-dollar loan programs provide credit as a workplace benefit akin to health insurance. The programs serve as low-cost alternatives to payday loans, but they could also give small banks a chance to compete in the market for online consumer loans. Spring Bank began offering the loans last summer at two nonprofits in the Bronx. "It's good for the employer, it's good for the employee, and it's good for us because we anticipate it will reduce delinquencies because everyone is paying through payroll," said Melanie Stern, Spring Bank's director of consumer lending.
The Chronicle of Philanthropy included Dominik Mjartan, CEO of Southern Bancorp Community Partners and a member of CDBA’s Board of Directors in its inaugural 40 Under 40 List. The list includes young philanthropic leaders, economic developers, social advocates and visionaries who are crafting innovative new approaches to entrenched problems. Mjartan stressed the importance of an evidence-based approach to supporting development in the Mississippi Delta. "We’ve seen a lot of community-level progress," says Mr. Mjartan. "But then the question came, ‘Are we making sure that the right folks, those who really, truly lack economic opportunities, are also benefiting, that we’re not leaving them out?’ "
Bank of Montgomery has been rebranded BOM, reflecting the bank’s recent expansion beyond its original community of Montgomery, Louisiana. The bank now has grown to include nine branches in five parishes. A major component of the expansion was the acquisition of Bank of Ringgold by BOM’s parent company, Grant Bancshares Inc. That transaction expanded the bank's footprint with three additional locations in Bienville and Bossier, La. “The BOM name shows how the bank has entered a new chapter in terms of service area and financial strength,” said BOM President and CEO Ken Hale. “What won’t change is the hometown service we’ve provided for more than a century. We’ll always have a strong commitment to the communities we serve.”
City First Bank of D.C.'s New Markets Credit Fund is helping finance several new projects in D.C. and beyond. Among the newly announced projects was the $10 million expansion of Achievement Preparatory Academy's Washington, D.C. campus. The school will build a new 45,000 square foot addition to its existing campus in a community where there are no other quality public education options. Achievement Prep schools have been recognized for their immediate impact in closing the achievement gap between low-income and affluent students in Washington, DC. The expansion will create 300 additional quality school seats, 14 new teaching positions, four mental health positions and retain 74 permanent jobs.
Virginia's William Byrd affordable senior housing complex is ready for a makeover thanks to financing from Virginia Community Capital, the Virginia Housing Development Authority and the city of Richmond Housing Trust Fund. All residents of the complex must be at least 55 years old and meet low-income requirements. The property will have each of its units renovated and add new accommodations for residents with disabilities. The building, which was constructed as a hotel in 1925, is on the National Register of Historic Places and was renovated into low-income senior housing in 1996. The owners have been working for almost three years to get the necessary low-income tax credits and historic tax credits for the project before assembling the current financing package.
The Delta Regional Authority, the White House Rural Council and the U.S. Department of Agriculture are hosting a Regional Opportunity Investment conference in Memphis, Tennessee on January 11-12, 2016. The DRA, a longtime a supporter of Delta region CDFIs, encourages any interested CDFI bank representatives to attend. The event gathers top leaders from the delta business community, representatives of financial institutions, senior government officials, rural economic development experts and others from across the Mississippi Delta region and nation. Key topics of discussion will include job creation, small business growth and the development of important rural infrastructure. Register for the 2016 ROI Conference here.