Recent News
Today, August 29th, CDBA was joined by the American Bankers Association and the Independent Community Bankers of America on a joint national banking trades letter to the CDFI Fund Director. The letter proposes practical solutions to outstanding challenges with the December 2023 certification application and guidance that are of particular importance to the certification of CDFI banks.
The Community Development Bankers Association (CDBA), representing
the nation's leading mission-focused banks, acknowledges the recent federal court ruling that denied the request for summary judgment in the lawsuit challenging the Consumer Financial Protection Bureau's (CFPB) final rule implementing Section 1071 of the Dodd-Frank Act.
Jeannine Jacokes, CEO of CDBA, stated, "CDBA strongly supports efforts to ensure all small businesses are fairly and well served. We welcome the court's ruling to the extent it moves us closer to regulatory certainty and advances the critical... Read more
"A federal court today denied a request for summary judgment in a lawsuit by the American Bankers Association, Texas Bankers Association and others challenging the Consumer Financial Protection Bureau's small business data collection rule. In his decision, Judge Randy Crane ruled that the CFPB did not exceed its authority in issuing the rule, nor did it violate the Administrative Procedure Act, or APA, which governs how agencies develop regulations. ABA and TBA plan to appeal the case to the Fifth Circuit Court of Appeals."
"The U.S. Department of Housing and Urban Development and the U.S. Department of the Treasury today announced new actions to provide more interest rate certainty for state and local Housing Finance Agencies (HFAs) that use the Federal Housing Administration's (FHA) risk sharing initiative with the Federal Financing Bank to finance new construction of affordable housing. Since Day One, the Biden-Harris Administration has been committed to using all available tools to boost the supply of affordable homes and lower housing costs for all Americans. This whole-of-government effort is outlined... Read more
"It's no secret that our nation faces a massive housing affordability crisis. With soaring rents and home prices shutting the door to homeownership for moderate- and middle-income families, this has truly become an emergency. Historically, community development financial institutions have played only a small role in housing finance outside of a few large entities supporting traditional affordable housing projects. However, current circumstances have created an opportunity for CDFIs to significantly impact the housing crisis through new and innovative approaches."
"Our institution continues to raise the bar for what mission-focused community development banks can accomplish, as well as for the impacts we can create for underserved communities. In 2022, we set out to lay the groundwork for an ambitious five-year plan to double in size and impact, which we've dubbed our Delivering Impactful Growth Strategic Roadmap. Last year, that foundational planning was put into action, momentum that will help propel us through the remaining five years of this growth plan.
Thanks to our employees at every level, some of whom in positions and divisions that... Read more
Treasury urges Federal Home Loan banks to spend more on affordable housing:
"On July 31, Deputy Secretary of the Treasury Wally Adeyemo met with the leadership of the 11 Federal Home Loan Banks (FHLBs) and the Director of the Federal Housing Finance Agency (FHFA), Sandra Thompson, to discuss what steps the FHLBs can take to better support the development of affordable housing.
During the meeting, Deputy Secretary Adeyemo urged the FHLBs to deploy more of the significant resources at their disposal to expand housing supply in service of their public mission. Specifically,... Read more
Senate Appropriations FSGG Subcommittee proposes $30 million (9.3%) increase in FY 2025 funding for CDFI Fund; Bank Enterprise Award remains at $40 million:
"The bill provides $354 million for the CDFI Fund, a $30 million or 9.3% increase over fiscal year 2024, to generate economic growth and provide access to credit and technical assistance to underserved communities across the country. This includes $35 million—a $7 million increase—for the Native CDFI Assistance Program (NACA) to promote access to capital and financial services in Native communities."
Key Findings:
- "Elements of solar financing products and sales processes are identical to those used by predatory subprime lenders in 2007 to target low- and moderate-income and minority borrowers.
- GoodLeap, Sunlight Financial, Mosaic, Sunrun, and Sunnova together account for 80% of the residential solar loan market, according to the most recently available public estimate.
- Solar financing agreements often leave homeowners in a worse economic situation than before the door-to-door salesperson visited them. This solar debt elevates the risk... Read more
"Renasant Corporation (NYSE: RNST) ('Renasant') and The First Bancshares, Inc. ('The First') (NYSE: FBMS) jointly announced today that they have entered into a definitive agreement and plan of merger, pursuant to which The First will merge with and into Renasant (the 'Merger') in an all-stock transaction valued at approximately $1.2 billion, based on Renasant's closing stock price as of July 26, 2024. The Merger has been approved unanimously by each company's board of directors and is expected to close in the first half of 2025. Completion of the transaction is subject to customary closing... Read more
"Sen. Mark Warner, D-VA, introduced legislation Thursday seeking to require banks to engage in periodic test borrowing at the Federal Reserve's discount window.
The bill would also require regulators evaluating banks' liquidity preparedness to give lenders credit if they can successfully use the window. The discount window is the Fed's short-term lending facility designed to help banks facing a liquidity crunch.
The bill also outlined ways the Fed needs to modernize discount window operations, including by extending available hours, according to a summary of the legislation... Read more
"At the June 14 Annual Meeting of the NYS CDFI Coalition, we welcomed new board members Dan Fielding of Habitat for Humanity, NYC and Westchester and Lloyd Doaman of Carver Bank.
After serving 6 years as President of the Chair of the Coalition Board, Linda MacFarlane, Executive Director of the Community Loan Fund of the Capital Region, stepped down. We thank her for her leadership.
Aisha Benson, CEO of NFF, the Nonprofit Finance Fund, was elected Chair, leaving a vacancy in the Vice Chair position, which was filled by Jessie Lee, Managing Director of Renaissance Economic... Read more
"The Mission Driven Bank Fund today announced its latest investments in Community Development Financial Institution (CDFI) and Minority Depository Institution (MDI) banks committed to expanding financial services in underserved communities. The two investments reflect the Fund's aim to help close the racial wealth gap by providing mission-aligned banks with a range of financing instruments and tailored technical services."
Vice Chair Travis Hill spoke at the American Enterprise Institute on changes to the brokered deposit rule and other topics:
"The past year and a half has been a pivotal time for the FDIC. With three of the four largest bank failures in U.S. history, longstanding questions have reemerged about how to address bank runs, and newer questions have emerged regarding how FDIC receiverships are funded. Today, I will offer thoughts on both of these topics, along with views on the FDIC's approach to brokered deposits and a few thoughts on the path forward for the Basel III Endgame proposal... Read more
Rep. French Hill joined the Banking with Interest Podcast to share views on the future of financial services regulation:
"Rep. French Hill, one of the leading candidates to chair the House Financial Services Committee next year, makes his case for the job, discussing how his former role as a bank CEO would help guide his agenda. He talks about why he's worked so hard on crypto and stablecoin regulation bills, his vision for housing reform, the lessons of SVB, the end of Chevron deference, and his concerns on bank consolidation."
"The Community Reinvestment Act of 1977 is as special as it is frustrating.
What makes the Community Reinvestment Act special is that, rather than saying what banks shouldn't do, it says what they should do. Specifically, it says that banks 'have continuing and affirmative obligation to help meet the credit needs of the local communities in which they are chartered.'"
"American Banker's Claire Williams writes that despite Harris' stances on past legislative efforts, it remains uncertain how she would tackle future economic matters if elected as the country's first female president. Nevertheless, the next president will possess substantial sway over the course of economic and banking policy in the near future.
Some executives say that it's likely Harris would continue in line with the current administration's direction on banking regulations.
'In contrast to Trump's approach, which favored deregulation and a more hands-off approach, Harris... Read more
"The Treasury Department is warning that state laws that restrict banks from considering environmental, social and governance factors could harm efforts to address money laundering and terrorism financing.
The Associated Press obtained a copy of the letter sent Thursday to lawmakers. The letter singled out a law signed by Florida Gov. Ron DeSantis in May that says it would be an 'unsafe and unsound practice' for banks to consider non-financial factors when doing business. The letter concludes that 'such laws create uncertainty and may inhibit' national security efforts."
The Department of the Treasury has released a report on 2023 Qualified and Deep Impact Lending of community financial institutions (CDFI and MDI banks and credit unions) participating in the ECIP. Per Treasury:
"In approximately 18 months, ECIP participants originated a total of $58.3 billion in loans, of which more than one third was to the most underserved borrowers. Approximately three quarters, or $43.0 billion, of these originations was Qualified Lending. More than one third of these total originations, or $20.6 billion, was Deep Impact Lending to the most underserved borrowers... Read more
"Optus Bank Chairman Paul Mitchell and the Board of Directors today announced the appointment of Benita Lefft as President of the Bank. Lefft will oversee the primary operating lines of business, risk management, finance, and all support functions for the Bank. Dominik Mjartan will continue as CEO and assume the duties of Vice Chairman of the Board."