News
Mission Valley Bancorp plans to close an underused branch in Valencia, California at the end of the month with the intention of replacing it with a new, streamlined “branch of the future” nearby. Chief Executive Tamara Gurney said the decision to close the branch reflects changing technology in the banking industry. “A branch of 4,000-square-feet is probably twice the size of what the branch of the future will look like. Some of them are down to kiosks of 1,000-square-feet now, because we don’t need big vaults and people don’t use safe deposit boxes like they used to,” she said. “The bank is doing extremely well. In 2014 we grew our net loans by over $20 million,” Gurney said. Last week, the bank also approved its first-ever dividend payment to stockholders.
A new startup called Bankjoy wants to make it easier to provide modern mobile banking by rolling out a customizable banking app aimed at small banks and credit unions. Bankjoy founder Michael Duncan hopes to differentiate his product from offerings of other mobile banking vendors with a sleek, intuitive user interface and innovative features. The app will include many hallmarks of big banks' mobile offerings -- including the ability to log in using a PIN on your smartphone, make remote deposits using a smartphone camera, manage debit cards, set financial savings goals, make person-to-person payments and pay bills from your phone. The appearance of the app will be brand-conscious with customizable bank logos and color schemes.
A campaign of concentrated financing by Southern Bancorp is showing positive outcomes in Helena-West Helena, Ark. Southern Bancorp has loaned about $14 million to fund renovations and new construction on 17 properties in downtown Helena-West Helena over the past 10 years — about $2 million of that in the past two years alone. The city’s development strategy has included financing new business and schools as well as tourist sites that celebrate the city’s rich civil war and blues heritage. “It’s hard to keep up with all the stuff that’s going on,” said Dominik Mjartan, executive vice president of Southern Bancorp. For Mjartan, Helena-West Helena’s development is part of the bank’s mission of economic equality: “Should your ZIP code really determine whether you have a chance at a decent life?”
The New York City Department of Consumer Affairs is partnering with financial institutions including Carver Federal Savings Bank to offer an affordable bank account for unbanked New Yorkers. The New York City SafeStart Account has no upfront fees, no overdraft fees and accepts a minimum balance of $25. The accounts are major improvement over check cashing services, which collect an estimated $225 million from New Yorkers each year. Individuals can open a SafeStart account at participating bank and credit union branches throughout the city or schedule a free one-on-one financial counseling session at one of the city’s financial empowerment centers to learn about opening an account.
A new study by the Carsey School of Public Policy at the University of New Hampshire finds that CDFI lending accomplishes its mission of filling market gaps for key underserved low-income populations. The authors found that CDFIs deliver between two-thirds and ninety percent of all loan volume to borrowers living in CDFI Fund-designated investment areas. The report said that CDFIs provide borrowers that may not qualify for loans from mainstream sources with loan terms and interest rates that are comparable to mainstream products, but tend to entail less risk to borrowers. Among the study’s recommendations are standardization of impact metrics, greater reporting to the CDFI Fund’s Community Investment Impact System, and new financial supports for innovative financial practices.
The Philadelphia-based Center for Health and Literacy will share $26 million in New Market Tax Credit funding through City First Bank of D.C. The center is a cooperative project between Children’s Hospital of Philadelphia and the city of Philadelphia that will offer medical care, recreation and literacy programs in one central location for children and adults. The New Markets Tax Credit Program will also enable City First Bank to finance the renovation and expansion of a Washington, D.C. charter school campus and a medical research facility in Baltimore. “Through these programs, we have been able to finance socially impactful projects that have created jobs and provided critical community services,” said Brian Argrett, president and CEO of City First Bank.
Rep. Randy Neugebauer (R-Texas) has announced plans to introduce legislation that would replace the CFPB’s director position with a bipartisan, five-member commission appointed by the president. Republicans argue that the agency has stifled economic growth with too many regulations and lacks accountability. But Democrats have raised concerns that a commission would politicize the agency and reduce its power. House Financial Services Committee Chairman Jeb Hensarling (R-Texas) offered support for the proposal, which failed to gain traction when Democrats controlled the upper chamber in the last Congress. "The bureau regrettably remains unaccountable to the American people," Hensarling said. "That is why we need the CFPB on budget and led by a bipartisan commission."
With some two-dozen tribes now offering installment and payday loans, Native Americans have found themselves wrestling with the ethics of the lucrative, but often predatory, practice. The Lac Vieux Desert Band of Lake Superior Chippewa Indians depends on the lending revenues, which account for 42 percent of the band's annual budget and have filled a shortfall that would have halted many of its health-care and education services. Before initiating its payday lending service, the Lac Vieux Desert Band was in dire straits, with a casino failing amid Michigan's weakened economy. Now, lending revenues have allowed the tribe to subsidize propane costs during winters and to cover shipping costs for 12 trailers that will soon become permanent housing.
Porterville, Calif.-based Finance and Thrift has agreed to buy Pan American Bank in Los Angeles in an all-stock deal, rescuing California's oldest Latino bank. Finance and Thrift will adopt the Pan American name. The deal completes last summer's effort by 17 community banks that invested a total of $6.3 million in Pan American to ward off regulators ready to seize it. Robert Hughes, CEO of Finance and Thrift, will run the merged bank and maintain the banks' commitment to lending in blue-collar hispanic communities, using a data-driven approach to lend to underserved borrowers with sparse credit histories. As a first step, the merged bank will open a branch to serve working-class Latinos in the northern San Fernando Valley.
Southern Bancorp has appointed former CDFI Fund director Donna Gambrell to its board of directors. “I am honored to have been named as a board member to Southern Bancorp, a CDFI that has played a critical role in providing affordable capital, credit and financial services to low wealth communities in the mid-South for almost three decades,” said Ms. Gambrell. “I have been impressed by the bank’s commitment to mission and impact and by the leadership and vision of Board Chair Glen Jones, CEO, Darrin Williams and the entire Southern Bancorp team. I look forward to supporting the bank in its continuing efforts to transform rural communities.”