| Friday, September 19, 2014

Broadway Financial, parent company of Broadway Federal Bank in Los Angeles, plans to raise nearly $10 million through a private placement. The company said it intends to sell about 8.9 million shares of common stock, including 1.9 million voting shares. "Upon consummation of these transactions, we will have completed the restructuring of the company's balance sheet, enhanced the liquidity of the company and positioned the bank for growth," CEO Wayne Bradshaw said. The announcement comes a year after Broadway shed roughly $25 million in troubled loans in an effort to boost its asset quality.

American Banker | Thursday, September 18, 2014

Albina Community Bancorp in Portland, Ore., has filed for bankruptcy. Albina had been deferring interest payments to Hildene Capital Management for five years. The hedge fund invested in a collateralized debt obligation backed by Albina's debt. But the bank has been operating under a written agreement with the Federal Reserve Board that forbids it from paying its trust-preferred debt without regulatory approval. Hildene had threatened to force the company into involuntary liquidation if it defaulted. The company's board resigned as of the bankruptcy filing, which showed $7.5 million in liabilities and $1.3 million in assets. Hildene has raised the possibility of legal action against Albina's directors, as well as Beneficial State Bank, which recapitalized Albina last year.

Forbes | Wednesday, September 17, 2014

The annual Temenos banking survey has found growing anxiety among bankers about competition from tech giants. Respondents say their institutions are taking steps toward innovation, but nevertheless doubt that banks will make major updates to mission-critical systems until regulators force them to. Twenty-three percent of banks identify competition from tech vendors as a concern and 67 percent intend to boost IT spending. Customer loyalty was an even greater concern – and 30 percent of bankers said it was their biggest worry. One solution: building a better branch. Although the importance of branches dropped five points this year, retooling them toward customer support and advice plays a key role in many banks' retention strategies.

Bloomberg | Wednesday, September 17, 2014

A federal judge shut down two online payday lenders operating under the umbrella of the Hydra Group after the CFPB and FTC said they extracted more than $36 million from customers who never agreed to loans. The operations bought personal data about people who were researching loans at other websites, deposited unsolicited money in their accounts and debited finance charges that exceeded the amount of the deposits. When some consumers tried to stop their banks from debiting the money, the companies produced fake loan documents testifying to the debt. The lenders made mostly unsolicited loans totaling $125.3 million while extracting $161.9 million from bank accounts.

The Urban Institute | Wednesday, September 17, 2014

A new analysis of Home Mortgage Disclosure Act data by the Urban Institute shows that the current tight credit environment has disproportionately affected African American and Hispanic households. African American and Hispanic borrowers took out a greater share of mortgages as housing prices neared their peak, the worst time to take out a loan. Then, as prices began to drop, tightened credit standards left many unable to obtain or refinance a loan. From 2005 to 2012, the share of loans made to African American and Hispanic households dropped from 23 percent to 12 percent, locking many borrowers out of homeownership and creating an obstacle to building wealth.

Washington Post | Wednesday, September 17, 2014

The Consumer Financial Protection Bureau has proposed bringing the financing units of the big automakers under federal supervision for the first time, a move that would let the agency examine the lending arms of Toyota, Ford and Honda. The bureau has grown concerned that some car buyers are being steered into expensive loans when they qualify for cheaper ones and being misled about the terms and benefits of add-on products. The proposed rule would extend the bureau’s current oversight of bank auto lenders to cover 38 auto finance companies that make, acquire or refinance 10,000 or more loans or leases a year. The firms provided financing to about 6.8 million consumers last year.

American Banker | Tuesday, September 16, 2014

A new startup, TrueAccord, hopes to bring debt collection into the internet age. The company, which recently attracted $5 million in venture capital funding, uses behavioral analysis make debt collections less intimidating. TrueAccord tailors its campaigns to debtors, building a profile of the consumer and figure out the right course of action to collect on a debt. "I've been sitting here listening to breakup songs and eating ice cream because I feel like you're avoiding me," says one message targeted at millennials, who enjoy ironic humor according to TrueAccord’s data. TrueAccord uses email alongside phone calls and letters, and also allows users to negotiate terms through a web portal – unusual in an industry where regulations have caused collectors to shy away from online communication.

Mississippi Business Journal | Monday, September 15, 2014

Brandon, Miss.-based Community Bancshares continues to run far ahead of the state’s other banks in the amount of money loaned to businesses through the Small Business Administration. The bank has led the pack since 2010. From Oct. 1 through Aug. 31, Community Bancshares made 80 businesses more than $47 million in SBA loans. The company is one of only a handful of Mississippi banks the SBA designates as “Preferred Lending Partners,” authorizing the banks to approve SBA loans without the lengthy reviews normally required. “You know they know this stuff very well and can go ahead and approve them,” said Gary Reed, deputy director of SBA’s Mississippi District office in Jackson, Miss.

American Banker | Monday, September 15, 2014

Hildene Capital Management, a New York distressed-debt hedge fund, has threatened Portland, Ore.’s Albina Community Bancorp with involuntary bankruptcy if it defaults on its trust-preferred debt. Albina has been deferring interest on its trust-preferreds for five years and will soon default on about $6 million in debt and accrued interest if it doesn't pay. Complicating matters, Albina is currently under regulatory orders barring them from paying trust-preferred creditors. Last year, Albina sold a 90% stake in its bank to Beneficial State Bancorp in Oakland, Calif. by issuing new stock at the bank level, thus bypassing the debt-burdened holding company. The unusual recapitalization saved the bank, but it could expose the parent company to further legal challenges.

Southern Bancorp | Thursday, September 11, 2014

Reversing an industry trend of decreased rural lending, Southern Bancorp's 2013 annual report shows lending growth to $742 million, including 562 small business loans and microloans. Among customers profiled is Robert Heard, founder of Trumann, Ark.-based cabinet manufacturer Tru-Cab. As a young man, Heard worked at the Singer sewing machine factory by day and in his garage cabinet workshop by night. With Southern's help, Heard left Singer to open a Tru-Cab, a small shop which soon prospered. In the 1980's, the Singer factory closed and the building was vacant for years. Now, with financing from Southern, Heard is returning to the Singer factory -- which is the new manufacturing headquarters for Tru-Cab.