Arkadelphia, Ark.-based Southern Bancorp Community Partners has announced a new product that encourages local low-income non-traditional students to invest in college education. Their College Completion Matched Savings Program matches $3 for every $1 saved by the program participant. Once they reach their savings goals and complete financial education classes, participants can use the savings to pay for tuition, books or other school fees. “If you’re willing to work hard to achieve your education goal, Southern Bancorp Community Partners is willing to help you reach it,” said Mindy Maupin of Southern Bancorp Community Partners.
Over a weeklong stretch last month, all six institutions offering bank payday loans discontinued the product due to pressure from federal banking regulators. The coming months will test how hard those banks are willing to fight for low income borrowers. Whatever banks offer will likely be less profitable than deposit advance. Possible replacement products like secured credit cards may fill some of the void, but many customers who used deposit advances won't qualify for secured loans. Some banks are partnering with nonbanks that already have expertise in small-dollar lending, such as LendUp, an online short-term lending startup. Mixed signals from regulators have hampered the development of new products. The FDIC and OCC issued the guidance that killed the deposit advance, but the Federal Reserve Board declined to sign on. The picture should become clearer later this year when the CFPB releases regulations which will apply both to banks and payday lenders.
Green economy organization Green America has given One PacificCoast Bank, Albina Community Bank and Southern Bancorp A+ grades for their commitment to sustainability and clean energy. Green America praised these banks for avoiding financing coal power plants and mining operations. The organization noted that One PacificCoast, Albina and Southern all have demonstrated investment in sectors that invest in communities and promote sustainability. Green America released the rankings as part of their Take Charge of Your Card campaign, which promotes banks that are committed to environmentally-conscious investing.
The Federal Reserve Bank of San Francisco has compiled a series of articles and essays highlighting the stabilization strategies of nonprofits across the country. The essays emerged from experiences in the Neighborhood Stabilization Innovations Initiative, a project which supported emerging strategies for neighborhood stabilization after the foreclosure crisis. In this review, findings from that initiative are presented on topics including mitigating foreclosure, new models of housing counseling, public-sector entrepreneurialism and fair housing. "The 10 projects funded under the Neighborhood Stabilization Innovations Initiative point to a wide range of workable approaches, spanning many local markets and housing challenges. In each case, the success of the demonstration began with a strong, highly capable nonprofit institution," write contributing authors O'Callaghan and Weech.
CDBA member Virginia Community Capital is currently seeking a loan operations specialist to support their Finance/Operations Team. The Loan Operations Specialist will be responsible all for a variety of duties related to servicing the loan portfolio from the point of loan booking to the payoff and release of the loan. This position works closely with the lending team, recording data on new loans and renewals and is responsible for reconciling all loans related to general ledger accounts. The operations specialist is expected to manage loan file documentation and to conduct FLHB and HMDA reporting.
Lisa Sevron, a professor at the Milano School of International Affairs, Management, and Urban Policy at the New School, describes the experiences of payday borrower Azlinah Tambu, a twenty-two-year-old single mother: Ms. Tambu's car had broken down, and she needed it to drop her daughter off at day care and get to work. Tambu had no savings or credit card; no family or friends who could help. So she took out five payday loans from five different lenders knowing she would not be able to pay them back on time. When the lenders tried to withdraw the money she owed from her checking account, she did not have sufficient funds and was hit with overdraft fees that mounted to $300. Tambu paid off the overdraft charges and closed her account. Still, Ms. Tambu feels the loans were a necessary evil. “I think they should still exist," she said. "You know it’s undoable to take out five loans and be able to pay them back. But sometimes you have no choice. The reason I’m working so hard to pay these loans back is that I want to be in good standing, in case I ever need another one."
Shoddy paperwork, erroneous fees and wrongful evictions are cropping up among the servicers that collect mortgage payments. Servicing companies like Nationstar and Ocwen Financial now have 17 percent of the mortgage servicing market, up from 3 percent in 2010. The servicing companies are unfettered by many regulations which apply to banks. Because of those regulations, banks are eager to hand off some of their more challenging loans. Federal and state regulators worry that the rapid growth could create new setbacks like stalled modifications for millions of Americans. Analysts say the specialty servicers have not upgraded their technology or infrastructure to accommodate the glut of new mortgages. Some regulators say the servicers benefit when they work through the troubled loans as quickly as possible, raising questions about whether the companies are pushing homeowners into foreclosure.
Costs associated with the Target security breach have topped $200 million for financial institutions, according to data collected by the Consumer Bankers Association and the Credit Union National Association. The tally by the industry trade groups is the most comprehensive so far in identifying the breach's impact on banks and others. With the credit card data of an estimated 40 million shoppers exposed in the attack, banks have gone on a massive spree of new-card issuance: more than 17 million new credit cards have been sent out to customers. Replacing credit cards costs an average of $10 per card, not taking into account the cost of any fraudulent activity done with the stolen card numbers. But for banks, there is an even bigger card-replacement cycle approaching: October 2015 is a major deadline in the planned shift to microchip-enabled credit cards.
Brian Argrett, President and CEO of City First Bank of DC, has been named a recipient of the Washington Business Journal’s 2014 Minority Business Leader Award. The award recognizes the top 25 minority business leaders in the Washington, D.C. area, honoring their entrepreneurial drive, creativity and success. Mr. Argrett, also CDBA Vice-Chair, was recognized for bringing financial services to the underserved and for his expertise growing companies in under-resourced and minority communities. Under his leadership, City First Bank has grown to over $200 million in assets and significantly increased its capabilities and impact in under-resourced communities. He also led City First Bank and its affiliates in organizing a new city-wide finance summit, a forum for discussion among urban planners, government officials, developers, community groups and financial institutions around the topics of economic parity and inclusion within a rapidly changing city.
On March 7, 2014, at 1:00 PM EST Promontory Financial Group will host a conference call to answer frequently asked questions about the Promontory Empowerment Awards. Topics covered in the call will include award eligibility, application requirements, selection criteria and prizes. All interested in attending are advised to RSVP to email@example.com for dial-in information and to submit questions for consideration during the call. Questions should be submitted by 5:00 PM EST on March 5. Promontory established the empowerment awards to recognize and support promising innovations which broaden access to safe, fair financial services. Awards will be offered in two categories: one for registered CDFI banks and another for financial and technology firms with less $10 billion in assets. Prizes will include consultations with Promontory and financial awards. More information and application materials are available at empowerment.promontory.com.