The CDFI Fund has released its FY 2013 Year in Review report detailing impact metrics for award programs. In FY 2013, $172.6 million was awarded to 201 organizations by the CDFI Program (including healthy foods) and the Bank Enterprise Award Program awarded $17 million. BEA Program applicants increased spending on community development projects by $493.5 million over the prior year. That includes a $427.8 million increase in loans and investments in distressed communities as well as a $55.4 million increase in loans, deposits and technical assistance to CDFIs and a $10.3 million increase in the provision of financial services in distressed communities.
The latest edition of the Pan American Bank Post is out with the Chicago bank's latest community impact news. Pan American employees volunteered at a number of neighborhood events recently, including Saint Anthony’s Health Fair. The event featured carnival games and food from local restaurants, along with health advice, free immunizations and free health screenings for residents. Pan American Bank employees also participated in Neighborhood Housing Service's Neighborworks day by refurbishing Chicago's Unity Park Garden with some planting and grooming.
Urban Partnership Bank's newsletter details the bank's Detroit redevelopment projects. Work is underway on Urban Partnership's redevelopment of a 126,000 square-foot building into rental housing and office space for the Archdiocese of Detroit. The bank's increased presence on Detroit holds promise for boosting the city's economy, says Urban Partnership bank senior business banker Beverley Loyd. "This is a great opportunity to help with the ongoing revitalization of Detroit. Creating good jobs, developing quality affordable housing and helping small businesses grow are essential ingredients of a stronger, healthier city," said Loyd.
Mortgage lenders and investors have been desperately trying to figure out how to originate non-QM loans that offer lenders the kind of profits last seen during the days of subprime lending. At a time when loan volumes have plummeted, lenders can charge consumers significantly higher mortgage rates for these products. The first step for many lenders has been introducing niche-products safe enough to compensate for legal dangers. These lenders have introduced loans for self-employed borrowers, foreign nationals and borrowers with blemished credit from a past short sale or foreclosure. They are also focusing on specific property types like condominiums that do not meet standards set by Fannie Mae or Freddie Mac.
First Bancshares received a profile in the Hattiesburg American for its continued service to local customers. “Hattiesburg is a very robust economy — we’ve got two medical centers, two universities, a military presence with Camp Shelby,” said M. Ray “Hoppy” Cole, president and CEO of First Bancshares and The First. “All those things help give it a stable, growing economy, and stability and growth is good for banking.”
Despite the notoriety that subprime loans gained during the financial crisis, they are re-emerging as one answer to the tight lending standards that have shut out millions of would-be homeowners. Subprime loans, which accounted for about 15 percent of all new home loans in 2005 and 2006, are now just 0.5 percent of the mortgage market. Only a handful of lenders are offering them, at interest rates from 8 to 13 percent. But the market is picking up. The number of lenders responding to inquiries from subprime borrowers started to catch up to the number responding to prime borrowers beginning in the fourth quarter of last year. Large banks are looking at subprime borrowers because rising mortgage rates have killed off much of their refinancing business.
Some 200,000 households in Louisiana borrow from payday lenders every year; in Baton Rouge, 20 percent of bankruptcy cases involve the loans. But Together Louisiana, a coalition of religious and civic groups, found out just how hard it can be to fight the predatory lenders. The group ran up against a wall of opposition when they launched a campaign for stricter payday lending rules. The number of industry lobbyists at the statehouse jumped from a handful at the beginning of the legislative session to more than fifty by its end. In late April, the state Senate rejected the bill. Advocates in Louisiana are now awaiting new rules from the Consumer Financial Protection Bureau, which is expected to introduce new regulations on the industry this fall.
Big banks including Citigroup, Suntrust and Bank of America are trying to learn from Amazon's use of predictive analytics to target customers more accurately. Like Amazon, banks collect vast amounts of information about their clients' spending and savings. That kind of information could be used to anticipate whether a customer needs a credit card, car loan or mortgage. This individualized approach runs counter to the traditional big bank model that relies on a high volume of transactions rather than marketing tailored to individual customers. Predictive analytic services could be more akin to the personalization associated with smaller institutions -- if it can be done without coming off as creepy or intrusive.
The U.S. housing recovery should regain its footing, but faces a number of challenges according to a new report from Harvard University's Joint Center for Housing Studies. Tight credit, elevated unemployment and mounting student loan debt among young Americans are moderating growth and keeping millennials out of the market. Although the housing industry saw notable increases in construction, home prices and sales in 2013, household growth has yet to fully recover from the effects of the recession. Nevertheless, the report predicts that millennials will be key to reviving housing demand as they age into their more owner-oriented 30's.
A survey of checking account holders by Pew Charitable Trusts has found widespread confusion and dissatisfaction about financial institution's overdraft policies. Current regulations require financial institutions to obtain affirmative consent (an “opt in”) from consumers before enrolling them in an overdraft penalty plan that makes automatic short-term advances to cover transactions. The survey, however, found that more than half of respondents who had incurred overdraft penalties did not believe they had opted in to the plan. The penalties fell disproportionately on younger, lower-income and nonwhite account holders and 28 percent of respondents who paid an overdraft penalty report closing a checking account because of the fees.