Apple has announced that its new generation iPhones and the Apple Watch will incorporate Apple Pay, a new mobile wallet. The product could give Apple a leg up on mobile payments, a field many companies have attempted to expand with limited success. Using a credit card on their device, customers wave their phone or watch in front of a terminal to pay. The payment is delivered to the terminal using near-field communication, or N.F.C. chip. Apple hopes that its promises about security, including that credit card information will not be stored on the smartphones or devices or on Apple’s servers, will convince consumers that it is safer than using a credit card.
Chicago real estate magnate Daniel Goodwin describes his ownership of Pan American Bank as a labor of love, his way of promoting entrepreneurship in disadvantaged neighborhoods. Goodwin sets strategy and handles board matters as chairman of Pan American's holding company. “The most satisfaction I get from banking is working with Pan American Bank in making creative loans to startup businesses, particularly in the inner city,” Goodwin said. Since Goodwin bought the bank in 2007, its size has increased rapidly; after Pan American's recently announced acquisition of Bank of Palatine, it will have grown to nearly $300 million in assets, up from $34 million seven years ago.
Home Depot has confirmed that its payment systems were breached, potentially affecting customers who used a payment card at the stores since April. It is not yet known how many consumers were affected by the breach or to what extent their credit and debit card information has been compromised, but the company says no debit pin numbers have been compromised. Home Depot will provide free identity protection services to any customer who used a card at its stores since April. If a breach did begin in April, it would have overlapped with the retailer’s busy spring shopping season, which described on a call with investors as having “record number of customer transactions.”
Regulators have unveiled a second round of CRA reforms, this time increasing banks' opportunities to get CRA credit for small-dollar loan programs. The new reform, instituted by the OCC, FDIC and Federal Reserve Board, represents an incremental change in CRA policy, changing to the agencies' "Question and Answers" document used to interpret CRA enforcement procedures. CRA credit for small-dollar lending is already available as part of the CRA exam's lending test. But under the proposed revision, small-dollar lending could garner additional consideration as one of a number of "innovative or flexible lending practices." Banks and consumer advocates have 60 days to comment on the proposal.
The CDFI Fund has announced it will launch a new Capacity Building Initiative training and technical assistance series later this year titled Expanding CDFI Coverage in Underserved Areas. The series, presented by Opportunity Finance Network, will provide specialized training and technical assistance to CDFIs to extend their reach into underserved communities that lack a CDFI presence. “By expanding the ability of CDFIs to have impact in areas currently lacking adequate financial services and lending opportunities, this training series will directly align with the CDFI Fund’s primary mission to increase economic opportunity and promote community development investments for underserved populations,” said Acting CDFI Fund Director, Dennis Nolan.
Chicago's Urban Partnership Bank held a Customer Appreciation Day to celebrate the Bank's fourth anniversary. Each branch provided refreshments and offered an opportunity to win tickets to a Chicago Sky basketball game. At the South Shore Summer Festival, Urban Partnership volunteers donated their time to share information about the impact of their financial services and products. Volunteers from Urban Partnership Bank also teamed up with the Gary Comer Youth Center for a gardening day, harvesting crops, prepping soil and helping build winter hoop houses.
James Sills, the new president and CEO of Mechanics & Farmers Bank, says that growing security threats will make experience in both financial services and technology more attractive to banks. "The bad guys are extremely sophisticated," Sills said. "They have some unbelievable tools to penetrate networks, databases and point-of-sale machines." In addition to maintaining web security, Sills will oversee implementation of M&F's huge conversion of its core processing system to Fiserv, a new platform that should help M&F expand into new product offerings. Sills succeeds Kim Saunders as president and CEO of the bank. Previously, Sills was the state of Delaware's chief information officer and secretary of the Delaware Department of Technology and Information.
A Bloomberg investigation has uncovered a secret financing network which connects investors including Harvard University to payday lenders. At the center of the network is Vector Capital IV, a San Francisco private-equity fund run by Alex Slusky. Slusky's fund consisted of $1.2 billion in funds raised from investors including Harvard University, who were told the fund would buy and turn around struggling software companies. But Slusky struggled to find enough companies to buy. When Harvard, fed up with delays, tried to pull out, Slusky invested the funds in Cane Bay Partners, owners of a network of payday-lending websites which uses overseas charters in Belize and the Virgin Islands to obscure ownership and circumvent U.S. usury laws.
The recent iCloud hack that led to the theft of celebrity photos from Apple's popular cloud storage service has fueled concerns about the safety of the data banks and their employees store in the cloud. Analysts warn that any service which backs up data to an external cloud server introduces a degree of security risk. Apple's iCloud was particularly vulnerable because some Apple service logins lacked brute force protection -- a measure which would have prevented hackers from entering thousands of randomly generated password guesses searching for a correct match. Security experts advise opting for solutions that require multi-factor authentication when remotely accessing data.
Banks are making less of their money from customer-account fees than at any time in the past seven decades as strict government rules and changing consumer behavior squeeze a major source of revenue. After peaking in 2009, the annual account fees collected at U.S. banks have declined, even as the volume of bank deposits has swelled. The fees have dropped nearly 21% to $32.5 billion last year from $41.1 billion in 2009, reversing a trend of fee growth that had lasted since 1942. Fees have become less profitable since 2010, when the Federal Reserve put in place a new regulation requiring that customers had to explicitly opt-in for overdraft coverage. Customers are also making greater use of Internet and mobile banking solutions which make it easier to check balances and avoid overdrafts.