Recent News
Amid a spate of high profile cyberattacks, the FFEIC has released a new cybersecurity assessment tool to help financial institutions identify risks and evaluate their cybersecurity preparedness. The assessment provides a repeatable and measurable process for institutions to track cybersecurity preparedness over time, including determining the institution’s overall cyber risk, assessing the institution’s cybersecurity preparedness, evaluating whether the institution’s cybersecurity preparedness is aligned with its risks and determining needed risk management practices. The assessment is... Read more
Risk in the U.S. banking sector is increasing as lenders ease underwriting standards for some categories of loans, the OCC said Tuesday. The share of leveraged loans to companies with debt-to-earnings ratios above the regulatory guidelines rose during 2014. In commercial real estate, banks are facing competition not only from other banks but also from life insurers, private-equity firms and others. As a result, banks are easing underwriting standards and making loans with options including interest-only payments for borrowers. Lenders are also easing the terms of auto loans, extending... Read more
Oakland, California-based Community Bank of the Bay has announced that John Barr will join the bank as Chief Credit Officer. Barr previously served as Chief Credit Officer of Valley Community Bank in Pleasanton, California where he worked to significantly improve asset quality. Barr also has extensive experience in loan portfolio acquisition and valuation. “We are extremely pleased that John has chosen to join our management team as Chief Credit Officer. He brings a wealth of experience in the key areas of asset quality and portfolio management, and his commercial real... Read more
The Supreme Court decision making same-sex marriage legal nationwide could boost mortgage demand as it provides gay and lesbian couples with more financing opportunities and stronger joint property rights. In a survey of lesbian, gay, bisexual and transgender consumers, 81% of respondents said a Supreme Court ruling for marriage equality would make them feel "more fiscally protected and confident," which the trade group identifies as a key real estate market driver. The Supreme Court decision could spur not only more... Read more
Southern Bancorp’s 2014 annual report shows continued financial success for the bank and growing social impact. Since acquiring several institutions in 2009, Southern has significantly increased investment in their communities. The bank has tripled capital investment levels in Blytheville, Ark. since acquiring First National Bank and increased lending significantly in Trumann and El Dorado. The bank also made new acquisitions in 2014 that expanded its coverage into Eudora, Arkansas and Mound Bayou, Mississippi, high-poverty areas with few banking options. “We have yet... Read more
Two new studies by researchers at Stanford and Harvard Universities highlight the effect of neighborhood amenities in creating disparities between white and black families. The Stanford study found that among white and black families with similar incomes, white families are much more likely to live in good neighborhoods — with high-quality schools, day-care options, parks, playgrounds and transportation options. In fact, the typical middle-income black family lives in a neighborhood with lower incomes than the typical low-... Read more
A new report by the Federal Reserve Bank of Boston finds that users of reloadable prepaid cards increasingly use their cards as a substitute for services provided by traditional banking accounts. Owners of reloadable prepaid cards who do not have checking accounts comprise 4.8 percent of U.S. adults. People without checking accounts were almost twice as likely to own a prepaid card as those who do have checking accounts. People with low household income were much more likely to own a prepaid card; 49 percent of people with household income below $25,000 own a prepaid card. About 33 percent... Read more
United Bank is opening a new business incubator to support the formation of new ventures in Atmore, Alabama. The bank plans to use the incubator to support the development of multiple businesses, supplying basic infrastructure and providing reduced rents to allow entrepreneurs time to grow and develop their businesses. “We are a [CDFI],” said United Bank Vice President and Business Banker Larry Strain. “And an advantage of being one is that it allows us to go outside the normal bank role and help develop the community’s business environment... The ideal is people who need... Read more
The CDFI Fund has announced a 5 session nationwide listening tour to solicit public opinion as it crafts its new strategic framework. The tour aims to collect feedback on underserved community needs, areas for improvement and innovation and data use. The CDFI Fund encourages the participation of certified CDFIs, community development trade groups, foundations, local and state government entities, and others interested in community economic development. “The CDFI Fund views this listening tour as a unique opportunity for constructive dialogue to support the growth and success of CDFIs and... Read more
BankPlus is providing responsible short-term loans and financial education as part of the New Roots Credit Partnership, an initiative aimed at combating payday lending in Mississippi. The partnership is a collaboration between the Mississippi Center for Justice, banks and local employers. Since 2013, BankPlus has partnered with employers to run more than 50 three-hour classes for employees, teaching participants the basics of credit, how to create a household budget and how to save money. “These are people who aren't familiar with banking, it hasn't been a family tradition... Read more
Regulators are going beyond CRA ratings when assessing M&A deals amidst outspoken criticism from community advocates. Last year, the OCC required Valley National Bancorp to strengthen its overall CRA plan before acquiring 1st United Bank amidst pressure from community groups. The groups charged that, even though Valley National had received a “satisfactory” CRA rating, its CRA record in its New York City market was weak. Many banks looking into M&A deals are now beefing up their CRA plans and making them the centerpiece of their efforts to assuage community groups and regulators.... Read more
The NCUA has proposed changes that would make it easier for credit unions to lend to businesses, making them more formidable competitors with banks and other lenders for commercial trade. The revisions would eliminate requirements that credit union borrowers personally guarantee loans as well as a provision that imposes 80% loan-to-value cap on collateral offered as security. The NCUA also expects to increase the amount of loans a credit union can make to a single borrower while lifting a cap on an institution's aggregate construction and development lending. Credit unions would still have... Read more
Chicago, Illinois-based First Eagle Bank was one of three banks awarded the Illinois Bankers Association Community Service Award. The Illinois Bank Community Service awards honor financial institutions in the state that demonstrate a strong commitment to community service. First Eagle Bank has maintained an “Outstanding” CRA rating since 2009 and has undertaken a number of community development initiatives, including providing an $850,000 subsidy to Mercy Housing Lakefront through the Federal Home Loan Bank of Chicago Affordable Housing Program. First Eagle has also... Read more
The latest issue of the Southern Bancorp Mission News is out with details on a range of Southern's recent initiatives. Southern Bancorp's policy team is encouraging savings among low-income individuals by working with lawmakers on implementation of the American Savings Promotion Act. The federal legislation allows banks and credit unions to encourage savings with Prize Linked Savings programs -- cash-prizes awarded through savings raffles. Prize Linked Savings programs are fun, no-risk methods of encouraging customers to open savings accounts and make regular deposits.... Read more
Two new reports from Clarity Services and Charles River Associates found that the CFPB’s proposed payday lending rules could cause a majority of lenders to close down. The rules would require non-bank payday lenders to refuse credit to those below a certain payment-to-income ratio. The Clarity Services report examined payday lending transactions and concluded that payday storefront businesses would lose more than 70 percent in volume. The Charles River Associates... Read more
City First Bank of DC and Southern Bancorp have become the newest members of the Global Alliance for Banking on Values (GABV). The GABV is a network of banks that share the mission of using finance to deliver sustainable economic, social and environmental development. This marks an increase in membership for the GABV to 28 banks and banking cooperatives around the world -- among them Sunrise Banks and Beneficial State Bank. "I welcome these banking trailblazers to the Alliance,” said Dr. Marcos Eguiguren, Executive... Read more
Small banks could pay less in assessment fee premiums under a new FDIC proposal. The proposal would change the calculus used in determining assessment fees, incorporating metrics based on banks’ loan portfolios. The proposal would result in 60% of small banks paying lower premiums. The plan is intended to be revenue-neutral, reallocating a greater percentage of assessment fees to riskier institutions. It would also add a "loan mix" category in its risk assessment that takes into account the types of loans a bank holds. It would apply only to banks with less than $10 billion of assets that... Read more
A new study from the Center for Responsible Lending on the cumulative costs of predatory practices finds substantial costs to borrowers, communities and the economy on the order of hundreds of billions of dollars. The study found that dealer-brokered auto loans, which often contain abusive provisions, are twice as likely to result in repossession as bank or credit union financed auto loans. Borrowers of color are up to three times more likely to receive an abusive loan compared with a white counterpart and families with annual incomes below $25,000–$35,000 are much more likely to receive... Read more
The CDFI Fund of the U.S. Treasury has announced more than $3.5 billion in New Markets Tax Credit awards aimed at encouraging investment and economic growth in low-income urban and rural communities. A total of 76 organizations, including City First Bank of DC and Central Bank of Kansas City will receive tax credit allocation authority. The New Markets Tax Credit Program allows individual and corporate taxpayers to receive a non-refundable tax credit against federal income taxes for making equity investments in Community Development Entities. The program... Read more
Appalachian Community Capital (ACC), a new central bank for Appalachian CDFIs, has announced a successful first-round investment closing. Appalachian Regional Commission is leading formation of the new CDFI which will now begin lending with support from Christiansburg-based Virginia Community Capital (VCC). ACC will allow its member CDFIs to pool their capital needs and attract bigger investors. ACC is expected to leverage $233 million—$42 million over the next 24 months alone—in private bank capital. VCC will service ACC’s loans and provide back office support through... Read more