Urban Partnership Bank officials have announced that the bank has passed a lending milestone, exceeding $200 million in total loans since the bank began lending in 2012. Overall, UPB has made 243 new loans in less than three years, creating or retaining approximately 2,400 new jobs in urban communities. Over 50 percent of the loans support small businesses, nonprofits and affordable housing opportunities in Chicago’s South Side. "These milestones underscore the continuing growth of the bank’s small business and commercial real estate lending and our ongoing commitment to create economic development opportunities that build vibrant urban communities and reinvigorate peoples’ lives,” said William Farrow, president and CEO of UPB.
CDFI loan fund Partners for the Common Good seeks a chief lending and credit officer to oversee PCG’s lending and loan participation initiatives, playing a key role in cultivating institutional investor participants and new lending partners. This is a senior position which oversees a portfolio manager and team of underwriting consultants.
Community financial institutions saw a 26 percent increase in the number of hours and employees required to meet regulatory compliance demands in the third quarter of 2014, according to data released by compliance management systems provider Continuity Control. The average community bank needed to devote 653 additional hours, or the equivalent of 1.86 full-time employees, to manage the 82 new regulatory changes added in the third quarter. To meet those needs, the average institution had to spend an additional $45,264 on compliance. Industry insiders speculated the new regulations, including the Qualified Mortgage Rule, would result in a tapering of mortgage lending.
Thousands of Americans who lost their homes in the housing bust now face more unpleasant fallout as debt collectors chase them down for the money they still owe. By now, banks have usually sold the houses. But the proceeds of those sales were often not enough to cover the amount of the loan, plus penalties, legal bills and fees. Now, Fannie Mae and Freddie Mac, as well as other mortgage players, are increasingly pressing borrowers to pay. Before the housing bubble, banks often refrained from seeking deficiency judgments, which were seen as costly and bad publicity. But the housing crisis saddled lenders with more than $1 trillion of foreclosed loans, leading to unprecedented losses. Now, some large lenders want their money back.
OFN will be hosting more than 1,200 CDFI practitioners, funders, investors and policy makers at the 2014 OFN Conference in Denver, Colorado October 14-17. The theme of this year’s OFN Conference is how CDFIs can work together in the future, informed by their experiences of the past 30 years. The event will feature a practitioner-driven curriculum with a focus on strategic dialogue, all directed toward aligning capital with social, economic and political justice. Registration for the conference is still open here.
Southern Bancorp has distributed hundreds of thousands of dollars in downtown renewal grants, startup funding and low-interest loans this year in Helena-West Helena, Ark. Matt Inman, a 27-year-old native of the town, lives in a downtown apartment above a 1,900-square-foot retail space that he renovated last year and hopes to market as a coffee shop or restaurant location. Since finishing that building, Southern has provided Inman financing to purchase two additional downtown properties which he plans to turn into retail and residential space. Brooke Gerber, project consultant at Southern Bancorp, says there’s a growing sense “that there is progress and the rubber is meeting the road,” in Helena-West Helena.
Lending startups such as ZestFinance and LendUp are putting a high-tech spin on credit scoring. ZestFinance collects as many as 10,000 pieces of data about the poor and unbanked, then lends them money at rates as high as 390 percent. In comparison, FICO scores use just a few dozen pieces of data. ZestFinance’s machines organize facts about a loan applicant into “metavariables.” Some metavariables can be expressed only as mathematical equations. Others rank applicants in categories. An applicant whose stated income exceeds that of peers flunks the veracity test. A person who moves residences too often is considered unstable. Since 2011, ZestFinance has attracted $62 million in venture financing.
The U.S. Department of the Treasury has invited public comment on proposed changes to the CDFI Certification Application. The CDFI Fund seeks comment on a number of topics, including the utility of the requested information, the expected burden of collecting the information, ways to improve the quality of information being collected, estimates of cost, and how use technology to simplify data collection. The deadline for comments is December 8th, 2014.
Thirty-five low income homeowners will get critical home repairs thanks to a $253,750 Affordable Housing Program grant from BankPlus and the Federal Home Loan Bank of Dallas. The grant will help fund Habitat for Humanity Mississippi Capital Area's Neighborhood Revitalization Initiative. This is the third grant the organization has received from FHLB Dallas and BankPlus. The organization received a $400,000 grant in 2011 and a $493,000 grant in 2012, funding a total of 65 new homes and 33 home repairs. “There is a great need in this community for projects such as this, and we simply could not accomplish our goal without the support of partners like BankPlus and FHLB Dallas,” says Cynthia P. Griffin, executive director of Habitat for Humanity Mississippi Capital Area.
Sunrise Banks' recent growth has created some major changes on the bank's strategic planning and interactions with regulators, CEO David Reiling says. As a smaller institution, the bank's talk with regulators was about how the numbers had changed since the last exam. But as the bank passed the $250 million threshold, “you were not just talking about the past, but forecasting the future,” Reiling says. The management group meets each week for 90 minutes, but instead of addressing details and specifics, the group concentrates on strategic matters, preparing for the next phase of growth. With the bank now past the $750 million mark, Reiling wonders: “what will the next jump by a factor of ten look like?”