New York Times | Wednesday, August 6, 2014

The FTC and the White House have recently called for legislation that would inform users about the data social media companies collect and sell amid concerns about discriminatory data profiling. Seeta Peña Gangadharan of the New America Foundation echoes these concerns, arguing that big data can facilitate discriminatory practices in lending, hiring and marketing. Jake Rosenberg of Lendup counters that companies like his use big data to help lenders extend credit to the underbanked by creating new sources of credit behavior data for borrowers with scarce credit histories. Maurice Mitchell of the New York State Civic Engagement Table focuses on ways big data can expose and remedy cases of discrimination, including discriminatory housing patterns. 

Wired | Tuesday, August 5, 2014

ActiveHours is a new Palo Alto startup which aims to divert business from payday lenders by eliminating the very concept of a payday. The startup, which recently raised $4.1 million, distributes an app that allows hourly workers to immediately access pay they’ve already earned, without having to wait for their employer’s standard pay cycle. Users can see how much money they have earned and transfer any percentage of it into their bank account, essentially giving the user a cash advance. When payday rolls around, ActiveHours withdraws the same amount from the user’s account. ActiveHours charges no fees for the service and makes money on tips, asking users to pay whatever they want. It remains to be seen whether the tip-based model will be sustainable in the long term.

CDFI Fund | Tuesday, August 5, 2014

The CDFI Fund has opened the 2014 round of the New Markets Tax Credit Program. The program's notice makes available up to $5 billion in tax credit allocation authority. The New Markets Tax Credit provides a tax credit to investors who make qualified equity investments in Community Development Entities (CDEs) which then invest the capital into projects in low-income communities. Since its inception, the NMTC Program has made 836 awards to CDEs totaling $40 billion in tax credit allocation authority. The deadline for CDE Certification applications is August 22. The deadline for the NMTC electronic application is October 1 and the deadline for prior allocatees' issuance of qualified equity investments is January 30, 2015.

Woodstock Institute | Friday, August 1, 2014

Bank employees are giving customers misleading or inaccurate information about their overdraft protection options, according to mystery shoppers working with the Woodstock Institute. The Federal Reserve Board requires that bank customers must “opt in” to banks' overdraft products. But mystery shoppers’ conversations with bank representatives revealed persistent misinformation about overdraft coverage. Often, employees did not explain the opt-in requirement and led people to believe that overdraft coverage was an automatic account feature. Representatives frequently gave inconsistent, unclear or incorrect information regarding the mechanics of overdraft coverage and failed to clearly or correctly explain how fees are triggered. 

Bloomburg Businessweek | Friday, August 1, 2014

The $30 billion banks collect in overdraft fees each year may shrink if the Consumer Financial Protection Bureau imposes new rules on the practice. The spectre of new rulemaking has arisen in the wake of a new CFPB report which found that overdraft and non-sufficient funds fees account for about 75 percent of opted-in consumers’ total checking account fees, averaging over $250 per year. “Despite recent regulatory and industry changes, overdrafts continue to impose heavy costs on consumers who have low account balances and no cushion for error,” Richard Cordray, the bureau’s director, said. Cordray compared the overdraft fees to short-term loans, saying that a person who overdrew a checking account by $24 and covered it with a deposit three days later would pay an overdraft fee of $34, the equivalent of loan with an annual rate of 17,000 percent.

American Banker | Friday, August 1, 2014

The acquisition of First Tuskegee Bank in Alabama by CDFI bank Liberty Bank & Trust Co. of New Orleans should have been routine. The deal would combine two small minority-owned institutions in the Southeast, giving them additional heft to cope with new regulations. It would also help Liberty expand its originations of consumer, mortgage and commercial loans while adding more low-cost deposits. But federal and state regulators still have not approved the application they received nearly a year ago, marking an unusually long delay for an acquisition of this size. The companies have remained tight-lipped on the status of the deal, but they have not withdrawn the agreement. Kenneth Pickering, an attorney advising Liberty Bank on the acquisition, said the deal is still on and is awaiting regulatory approval.

Atmore News | Friday, August 1, 2014

United Bank of Atmore, Ark. has announced a pledge of $17,000 to help the Atmore YMCA alleviate recent shortfalls that threatened to close the organization. United Bank’s commitment of $1,000 per month through December 2015 will allow the YMCA to continue providing recreational services to children, families and senior citizens. In addition to its financial commitment, the bank is helping the YMCA draft a grant application from the Alabama Historical Commission for capital enhancements. “Our commitment today will meet an immediate need, but it’s also reflective of United Bank’s commitment to help the YMCA find a long-term solution to its funding issues,” said Robert Jones, President and CEO of United Bank. 

Urban Partnership Bank | Thursday, July 31, 2014

Urban Partnership Bank has extended $38.7 million of credit to commercial borrowers so far in 2014. The bank's newsletter highlights several of the loans, including $1.1 million in financing for investment rentals in the Park Boulevard development, a new mixed-income community located in Chicago's South Side. The project is a regeneration of the area that was once the site of the Chicago Housing Authority's heavily distressed Stateway Gardens highrise public housing project. The Park Boulevard development will create much-needed affordable student housing for the nearby Illinois Institute of Technology. It will contain over 400 units and feature new shops including a Starbucks and a Jimmy John's sandwich shop.

Independent Banker | Wednesday, July 30, 2014

Sunrise Banks of Minneapolis-St. Paul is exploring new ways of providing credit and financial services to the unbanked and underbanked through technology, says CEO David Reiling. The bank now offers microloans offered through employers as an employee benefit. The program is backed by software that quickly accepts an application for a microloan and provides an immediate decision, depositing funds in an employee’s bank account the next day or making them available on a prepaid card. “If you are really going to be in this business, you need to leverage technology in order to keep the cost as well as the compliance in-check,” Reiling says.

The Grio | Wednesday, July 30, 2014

In a recent interview, OneUnited Bank President Teri Williams discussed her career path, her new children's book, and OneUnited's efforts to foster financial comebacks for customers with damaged credit. Williams' new book, "I Got Bank," is a child-friendly guide to financial concepts. For Williams, who once aspired to be a teacher before entering finance, the book builds upon a long-held interest in education and helping disadvantaged communities. Education is also at the heart of the bank's Unity Visa card, which provides financial literacy training alongside safe credit. "[I wanted] to take this financial services experience that I had and figure out ways to give back." Williams said.