News
Albina Community Bank, based in Portland, Oregon, has announced Jeff Aden has joined the bank as Senior Vice President and Chief Lending Officer. As the bank’s Chief Lending Officer, Aden will be responsible for all consumer, commercial and real estate loan production activities in the bank. Aden has 30 years of commercial banking experience in Oregon, including previous management roles at Banner Bank and Sterling Savings Bank. “We are pleased that Jeff has agreed to join the team at Albina Community Bank,” said Cheryl Cebula, bank President and CEO. “Jeff brings a wealth of experience and knowledge in our market, and we look forward to his contribution towards growing the bank’s loan portfolio.”
Industrial Bank has earmarked $80,000 in the form of five grants that will help local small businesses get a leg up on the competition. The grants will include four Enterprise Awards, each in the amount of $15,000, and one President’s Award in the amount of $20,000. "The benefits for receiving this grant are endless and we, along with our partners, came up with this strategy hoping that it would make a significant difference in advancing companies from our community forward," said Industrial Bank President B. Doyle Mitchell, Jr. "It’s a shot in the arm for a business whose revenue totals less than $1 million annually... Entrepreneurship is growing in and around the District and we believe that a lot of new jobs will come from start-up companies."
The Supreme Court will rule on housing discrimination protections in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project. The court will decide whether the 1968 Fair Housing Act prohibits only intentional discrimination or also applies to seemingly race-neutral policies that harm minorities. The second form could include the policy at question, in which the housing agency's system allocated low-income housing tax credits for the construction of affordable housing such that new low-income housing was built almost exclusively in high-poverty minority neighborhoods. Civil rights groups argue the policy, while not explicitly discriminatory, harmed minorities by denying access to better schools and opportunities.
Elkins Park, Pa.-based Noah Bank has curtailed much of its lending since it was placed under an FDIC consent order in October 2013. Noah Bank has been a go-to lender in the Korean-American business community, with the second-highest dollar volume of SBA loans in New Jersey in FY 2014. In Q4 2014, the bank made only eight SBA loans in the state totaling $2.3 million, down from 25 loans for $13.3 million in the same period last year. The consent order requires the bank's board to review its management and loan portfolio. David Swartz, a lawyer for Noah Bank, said the order results from "the FDIC wanting to shore up [Noah's] credit administration, being that they are a high volume SBA lender... the regulators are faster to move to these types of orders, since [the financial crisis]."
The CDFI Fund will provide an additional 45-day application submission window for organizations that did not submit a Small and Emerging CDFI Assistance (SECA) component or Native American CDFI Assistance (NACA) Program Financial Assistance (FA) application by the original deadline. The additional application period will allow organizations to take advantage of a new waiver of the matching funds requirement for entities applying for FA awards through the NACA Program, the Healthy Food Financing Initiative (HFFI) and the SECA component. Organizations that have already submitted applications may update their request based on the waiver. The application deadline is March 5, 2015.
The New York Times Room for Debate featured articles on regulation of short-term loans. Dennis Shaul of the Community Financial Services Association and Professor Lisa Servon of the New School argue that payday loans provide low-income borrowers essential access to capital and should be allowed latitude within reasonable bounds. Valerie Wilson of the Economic Policy Institute and Gary Kalman of the Center for Responsible Lending are more wary of the risks, arguing that stringent federal regulations are needed to prevent repeat borrowing. Jamie Fulmer of Advance America and Raj Date, former deputy director of the CFPB, are optimistic about new lending innovations and advocate regulations that encourage new practices that increase efficiency and make more capital available.
St. Paul, Minn.-based Sunrise Banks plans to take on payday lenders with an innovative new product that provides loans as an employee benefit. The “TrueConnect Employee Benefit Program” is offered through employers as a loan against future salary and is offered in amounts from $1,000 to $3,000, depending on the employer and how much the employee makes. The loan is retired through pay deductions over the course of a year, with a maximum interest rate of 25 percent. Sunrise developed the program in consultation with the OCC, CFPB and several consumer groups. "It’s a consumer installment loan at the end of the day,” Reiling said. “But it’s a much better deal than a payday loan. And it must be paid off by the end of the year. It’s also fair and transparent.”
A handful of lending start-ups are making near-instant underwriting decisions using sophisticated software that can learn to make "better" loans based on thousands of pieces of borrowers’ information. The start-ups, including personal lender Earnest and payday lender ZestFinance, hope to transform the economics of underwriting, making more loans available at lower cost. By law, lenders cannot discriminate against loan applicants on the basis of race, religion, national origin, sex, marital status, age or the receipt of public assistance. But as startups rely increasingly on complex software algorithms that work autonomously and learn as they go, some worry that the machines could end up discriminating against certain groups without being explicitly programmed to do so.
Southern Bancorp CEO Darrin Williams has been named to the board of Little Rock Technology Park, an innovation district that promotes technology-based ventures in Little Rock, Ark. by advancing entrepreneurship, collaboration and knowledge-sharing. University of Arkansas at Little Rock Chancellor Joel Anderson said Williams' appointment was based on his outstanding leadership in the Little Rock community and his distinguished record in public service, which has included a term as a state representative. “Mr. Williams’ background and experience in finance, law, and politics will be a great asset to the board, particularly at this time. I am grateful for his willingness to accept this appointment,” said Chancellor Anderson.
The Federal Housing Finance Agency's plan to tighten membership rules for Federal Home Loan Banks has raised objections from an array of stakeholders, including state regulators, lawmakers and community financial institutions. The FHFA issued the proposal in September that would for the first time institute ongoing membership requirements. Community banks and credit unions with less than $1 billion of assets would be required to hold at least 1% of their assets in the form of mortgages in order to stay members of a Home Loan Bank. Critics say the proposal ignores the FHLB's mandate to provide liquidity to members and could cause community banks and credit unions to lose FHLB memberships, depriving them of a crucial source of funding.