Pressure is mounting on banks to offer low-cost accounts that could help bring more unbanked households into the financial mainstream. On October 19, both the American Bankers Association and the Federal Deposit Insurance Corp. called on banks that do not already offer accounts designed for previously unbanked consumers to start doing so. The basic accounts cost $10 or less per month and they usually do not come with paper checks, and don't charge fees for either overdrafts or low balances. JPMorgan Chase, Citigroup, Bank of America and Wells Fargo are among more than 40 banks that offer such accounts, and on Monday ABA President and CEO Rob Nichols urged "the rest of the industry" to join them.
The FDIC recognizes that MDIs play a unique role in promoting economic viability in minority and low- and moderate-income communities. Preserving, promoting, and building capacity in these institutions are high priorities for the FDIC. Because of this, the FDIC created "Investing in the Future of Mission-Driven Banks" as a way for private companies, philanthropic organizations, and others to learn more about the vital role of these financial institutions, and to provide suggestions about supporting MDIs and CDFI banks across the country through investments or partnership opportunities.
Amalgamated Bank yesterday announced that Keith Mestrich has informed the Board of Directors that he will step down from his positions as President and Chief Executive Officer on January 31, 2021. At that time, he will transition from a director to special advisor to the Board through July 2021. Mr. Mestrich joined Amalgamated Bank in 2012 and has served as its President and Chief Executive Officer since 2014. The Board has formed a Search Committee comprised of Lynne Fox, Chair of the Board, and four independent directors to oversee a national search process for a new CEO.
Hundreds of thousands of small businesses are closing for good. Temporary layoffs at larger companies are becoming permanent. But the country's largest banks, which together serve a majority of Americans through loans, credit cards or deposit services, are not raising an alarm. In their third-quarter earnings reports this week, big banks have said they are generally prepared for a wave of loan defaults they expect in the second half of next year. And their own fortunes are just fine: A trading and investment banking bonanza on Wall Street is helping them stay profitable. A few common themes have emerged from the reports.
Treasury Secretary Steven Mnuchin said on Wednesday that he did not expect an economic relief package to be enacted before the Nov. 3 election, as he and Speaker Nancy Pelosi of California have continued to struggle to reach an agreement on a broad package to support the economy. Negotiators on Wednesday resumed discussions over a coronavirus relief package, even though Democrats and Republicans remain wildly divided over the scope and size of another stimulus bill. The Treasury secretary suggested that the gap on the top-line cost of the bill was not that wide, but that the differences on the policies within a package remained significant. He said that the White House had already made big compromises on funding for state and local governments and that Republicans continued to want liability protections for businesses that were seeking to reopen during the pandemic.
Kat Taylor started a bank, a venture capital firm and an agribusiness to use capitalism’s toolbox to fight systemic racism, environmental destruction and economic inequality. Way back in 2007 (the stone age in impact investing), Taylor and Steyer launched an idea they’d talked about for years: use a charitable foundation to start a bank that would lend to nonprofits and do-gooder businesses and direct its profits back to their environmental and community charitable causes. With Taylor as CEO, Beneficial State Bank has grown into a $1.1 billion institution with 13 branches stretching from Washington to Southern California.
Consumers on the prowl for higher rates on their savings or more places to spread out their cash have a few shortcuts. Now there’s a new competitor to these savings account rate finders: the German fintech Deposit Solutions. Through SaveBetter.com, an online portal that marks Deposit Solutions’ first foray into the U.S., consumers can shop offerings from a variety of banks. They can open one or more savings accounts from the available banks, with certificates of deposit expected to be available by the end of the year, but manage them all through a single SaveBetter account. “For Central Bank of Kansas City, it’s another source of deposits," said Trent Sorbe, founder and president of Central Payments. "It’s another interesting way in which a small community bank, a CDFI in Kansas City, can diversify its deposit acquisition strategy, reach markets outside of Kansas City and be competitive with larger providers.
A two-track recovery is emerging from the country's pandemic-driven economiccontraction. Some workers, companies and regions show signs of coming out fine or evenstronger. The rest are mired in a deep decline with an uncertain path ahead. Just months ago, economists were predicting a V-shaped recovery—a rapid rebound froma steep fall—or a U-shaped path—a prolonged downturn before healing began. What has developed is more like a K. On the upper arm of the K are well-educated andwell-off people, businesses tied to the digital economy or supplying domestic necessities,and regions such as tech-forward Western cities. By and large, they are prospering. On the bottom arm are lower-wage workers with fewer credentials, old-line businessesand regions tied to tourism and public gatherings. They can expect to bear years-longscars from the crisis.
The Economic Mobility Corps (EMC) is a joint initiative of the Community Development Financial Institutions Fund (CDFI Fund) and AmeriCorps that places full-time national service members in Certified Community Development Financial Institutions (CDFIs) to enhance their capacity to provide financial literacy, financial planning, budgeting, saving, and other financial counseling activities. Economic Mobility Corps members placed in Certified CDFIs will receive training on the principles of financial counseling and financial literacy and assist CDFIs in promoting access to capital and credit in distressed and underserved areas. A total of $1.9 million is available for awards to EMC recipients. Applications are due to CNCS by 5:00 p.m. Eastern Time on Wednesday, January 6, 2021.
A new House Democratic economic stimulus plan would funnel billions of dollars to Community Development Financial Institutions, reauthorize the Paycheck Protection Program and allow marijuana banking. Those are just some of the provisions contained in the 2,153-page bill, which has formed the basis for renewed negotiations between House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin. The Democratic bill also calls for $1 billion for CDFIs for financial support and technical assistance, and a $2 billion “emergency appropriation” for the institutions, as well as up to $15 billion in PPP loans to be made by CDFIs and other community lenders.