CDBA emails its members recent industry news summaries at least once per month. If you know of something newsworthy taking place in the community development banking sector and would like to share with us, our members and our readership please contact us. The most recent newsflash is displayed below. Please scroll down to the bottom of the page to see a recent archive of newsflashes.
Broadway Federal Bank, F.S.B. has entered into a consent order with the Office of the Comptroller of the Currency (OCC). The terms of the Consent Order coincide with an upgrade of the Bank's regulatory rating by the OCC. As part of the order, the bank is required to maintain a tier 1 (core) capital to adjusted total assets ratio of at least 9% and a total risk-based capital to risk-weighted assets ratio of at least 13%. Both ratios are greater than the respective 4% and 8% levels generally required under OCC regulations. The bank's regulatory capital exceeded both of these higher capital ratios at the end of each quarter during 2013. The consent order supersedes the Order to Cease and Desist the bank entered into with the Office of Thrift Supervision in 2010. Broadway Financial Chief Executive Officer Wayne-Kent Bradshaw stated, "We are pleased that the OCC has recognized improvements in the bank's financial condition and internal control processes by upgrading our regulatory rating in conjunction with its recent full regulatory examination."
Bank Kiosks Provide More Options For Residents in Underserved Communities
Time Warner Cable NY1 News
New York City Housing Authority (NYCHA) residents are using new CashAccess bank kiosks, provided by Carver Federal Savings Bank, to cash checks and pay bills. The bank operates four of the machines, which look like ATMs. The kiosks charge fees comparable to those found at a check casher for bill payment services, wire transfers and NYCHA rent payments. “You don't have to get on a bus. You don't have to travel places to pay. It's right here,” said Jacqueline Picket, one of eleven NYCHA residents hired by Carver to help neighbors navigate the kiosks. Bank officials say they will be placing two additional machines in housing residences in the South Bronx and Brownsville in the coming year. Carver and their collaborators at NYCHA see the machines as part of a broader conversation about financial inclusion. “Over 40 percent of the folks who are using the machines have already opened a bank account, which is extraordinary,” said Carver CEO Deborah Wright.
The Consumer Financial Protection Bureau (CFPB) is considering new rules to govern debt collection practices that could--for the first time--include banks and other creditors that are collecting their own debt. The agency announced an advance notice of proposed rulemaking seeking public comments on regulating the multi-billion dollar debt collection industry. The CFPB rules may establish new restrictions on originating creditors, require accuracy of documents shared between all collection parties and update rules on how collectors communicate to consumers. Senior CFPB officials said creditors who originate and collect their own debt will be the most affected by the new rules since most existing regulations do not cover such firms. CFPB officials said they are currently looking at whether first-party creditors should be subject to the same restrictions as third-parties or face separate rules. The agency pledged to conduct small business panels, likely with debt collectors, and ensure new proposed disclosures are put out for comment before they are finalized.
A survey administered by the New York Fed detected a large amount of unmet demand for credit among American households. Nineteen percent of households were found to have unmet demand for credit. Broken down by income, 28 percent of lower-income households had unmet demand, compared with 8 percent of high-income households. Thirty-seven percent of the unemployed had unmet demand, compared with 20 percent of the employed. The rejection rate for the lower-income group was nearly three times as high as that for the high-income group (32 percent versus 12 percent). The unemployed face rejection rates of 34 percent versus 22 percent for the employed. These discouraged borrowers also had the lowest average credit scores, suggesting that they have poor credit, are aware of it and are therefore not applying. Nearly half of all households are likely to apply for some type of credit over the next twelve months and virtually all those who were rejected in the past year are likely to apply for credit in the coming year. Furthermore, a large proportion of applicants who were approved in the past year are likely to apply for more credit in the coming year, suggesting they those households anticipate still more demand.
Since 1998, Calvin Holmes has been president of the Chicago Community Loan Fund, a Chicago-based CDFI. In August, Holmes was appointed by President Barack Obama to the Community Development Advisory Board, which helps guide the Treasury Department's CDFI Fund. In an interview, Holmes spoke about his goals for the advisory board, his views on Community Reinvestment Act changes and the banking industry's role in supporting and utilizing CDFIs: "I'm hoping the fund can focus on how we create jobs and employment opportunities for this strata of Americans severely impacted [by the recession]... The [big banks] increasingly—given how their credit box has tightened—see CDFIs as instrumental in supporting [low- and moderate-income] areas. They see the opportunities to work with [CDFIs] to achieve measurable change in local markets and they seem to be taking it very seriously... Most folks are talking about changing the [CRA] assessment definition so that it's not about exactly where the bank has their branches or their deposits, but also where they make loans or provide credit. Many advocates agree upon the need to expand CRA to apply to mortgage and insurance companies, securities firms, large credit union and nondepository affiliates of banks."
The Atlantic Cities
New research has found that child poverty has a lasting negative impact on the brain. Researchers from the University of Illinois at Chicago, Cornell, the University of Michigan and the University of Denver followed children from the age of 9 through their early 20's. Those who grew up poor were more likely to have impaired brain function as adults. Poor children had more problems regulating their emotions as adults, regardless of income status at age 24. Over the course of the longitudinal study – which included 49 rural white children of varying incomes – these children were exposed to chronic sources of stress such as violence, family turmoil or low-quality housing. Those kinds of stresses, the researchers theorize, may help explain the link between income status in childhood and how well the brain functions later on. That theory, they write, is consistent with the idea that "early experiences of poverty become embedded within the organism, setting individuals on lifelong trajectories."
The debt collections program manager will research the Consumer Financial Protection Bureau’s strategy regarding the promotion and enforcement of fair debt collections practices in the consumer lending industry. The manager will monitor current and emerging issues related to all aspects of the debt collections and debt buying industry, including its business models, infrastructure, relationships with credit originators and compliance with the Fair Debt Collections Practices Act. In addition, this position will collaborate with the supervision and enforcement teams to design and establish registration, data collection and examination procedures and protocols and to identify key initial areas for rules development.
The portfolio manager is responsible for providing a broad range of loan portfolio support. Responsibilities include monitoring loan fund accounts, tracking financial reporting and covenant compliance and conducting loan-related reporting. The portfolio manager will also monitor the construction process for health center capital development loans and analyze borrower financial statements. This position interacts closely with borrowers, lenders and other funding sources as well as with staff members at the firm’s affiliate organization, Capital Link. This position reports to the Director of Loan Programs.