Recent News
A new startup called Bankjoy wants to make it easier to provide modern mobile banking by rolling out a customizable banking app aimed at small banks and credit unions. Bankjoy founder Michael Duncan hopes to differentiate his product from offerings of other mobile banking vendors with a sleek, intuitive user interface and innovative features. The app will include many hallmarks of big banks' mobile offerings -- including the ability to log in using a PIN on your smartphone, make remote deposits using a smartphone camera, manage debit cards, set financial savings goals, make person-to-... Read more
A campaign of concentrated financing by Southern Bancorp is showing positive outcomes in Helena-West Helena, Ark. Southern Bancorp has loaned about $14 million to fund renovations and new construction on 17 properties in downtown Helena-West Helena over the past 10 years — about $2 million of that in the past two years alone. The city’s development strategy has included financing new business and schools as well as tourist sites that celebrate the city’s rich civil war and blues heritage. “It’s hard to keep up with all the stuff that’s going on,” said Dominik Mjartan,... Read more
The New York City Department of Consumer Affairs is partnering with financial institutions including Carver Federal Savings Bank to offer an affordable bank account for unbanked New Yorkers. The New York City SafeStart Account has no upfront fees, no overdraft fees and accepts a minimum balance of $25. The accounts are major improvement over check cashing services, which collect an estimated $225 million from New Yorkers each year. Individuals can open a SafeStart account at participating bank and credit union branches throughout the city or schedule a free one-on-one... Read more
A new study by the Carsey School of Public Policy at the University of New Hampshire finds that CDFI lending accomplishes its mission of filling market gaps for key underserved low-income populations. The authors found that CDFIs deliver between two-thirds and ninety percent of all loan volume to borrowers living in CDFI Fund-designated investment areas. The report said that CDFIs provide borrowers that may not qualify for loans from mainstream sources with loan terms and interest rates that are comparable to mainstream products, but tend to entail less risk to borrowers. Among the study’s... Read more
The Philadelphia-based Center for Health and Literacy will share $26 million in New Market Tax Credit funding through City First Bank of D.C. The center is a cooperative project between Children’s Hospital of Philadelphia and the city of Philadelphia that will offer medical care, recreation and literacy programs in one central location for children and adults. The New Markets Tax Credit Program will also enable City First Bank to finance the renovation and expansion of a Washington, D.C. charter school campus and a medical research facility in Baltimore. “Through these... Read more
Rep. Randy Neugebauer (R-Texas) has announced plans to introduce legislation that would replace the CFPB’s director position with a bipartisan, five-member commission appointed by the president. Republicans argue that the agency has stifled economic growth with too many regulations and lacks accountability. But Democrats have raised concerns that a commission would politicize the agency and reduce its power. House Financial Services Committee Chairman Jeb Hensarling (R-Texas) offered support for the proposal, which failed to gain traction when Democrats controlled the upper chamber in the... Read more
With some two-dozen tribes now offering installment and payday loans, Native Americans have found themselves wrestling with the ethics of the lucrative, but often predatory, practice. The Lac Vieux Desert Band of Lake Superior Chippewa Indians depends on the lending revenues, which account for 42 percent of the band's annual budget and have filled a shortfall that would have halted many of its health-care and education services. Before initiating its payday lending service, the Lac Vieux Desert Band was in dire straits, with a casino failing amid Michigan's weakened economy. Now, lending... Read more
Porterville, Calif.-based Finance and Thrift has agreed to buy Pan American Bank in Los Angeles in an all-stock deal, rescuing California's oldest Latino bank. Finance and Thrift will adopt the Pan American name. The deal completes last summer's effort by 17 community banks that invested a total of $6.3 million in Pan American to ward off regulators ready to seize it. Robert Hughes, CEO of Finance and Thrift, will run the merged bank and maintain the banks' commitment to lending in blue-collar hispanic communities, using a data-driven approach to lend to underserved... Read more
Southern Bancorp has appointed former CDFI Fund director Donna Gambrell to its board of directors. “I am honored to have been named as a board member to Southern Bancorp, a CDFI that has played a critical role in providing affordable capital, credit and financial services to low wealth communities in the mid-South for almost three decades,” said Ms. Gambrell. “I have been impressed by the bank’s commitment to mission and impact and by the leadership and vision of Board Chair Glen Jones, CEO, Darrin Williams and the entire Southern Bancorp team. I look forward to supporting... Read more
Beneficial State Bank has been giving back to the community with an outreach program called Money on a Mission, which connects local small businesses and entrepreneurs to local capital providers. Demand for the events has been high, with over 200 attending the October gathering. Beneficial Co-CEO Kat Taylor said there is a need for loans many banks simply have to pass on. “Banks need three sources of repayment, which is hard for a start-up to demonstrate... These obstacles are the reasons we started this series—to connect small business owners to alternative, mission-... Read more
Chicago-based Urban Partnership Bank has continued lending in underserved communities despite losses incurred from its ShoreBank loan portfolio. The bank committed more than $90 million in new loans in 2014, up 17 percent from $78 million in 2013. Urban Partnership was launched to continue Shorebank’s mission of lending in disadvantaged neighborhoods. But after 2014 ended with a $39 million net loss relating to the Shorebank portfolio, the bank's capital was reduced to just $67 million. “I do not expect to see a loss of that magnitude” in 2015, said Urban Partnership COO... Read more
The 2015 CDFI Coalition Institute will be held February 24th and 25th at Washington D.C.'s Washington Plaza Hotel. The Institute will feature panels on a number of topics focused on strengthening the CDFI industry, including conversations with senior CDFI Fund officials, discussion of trends in capitalization and briefings on political developments in the new Congress. The CDFI Coalition will also hold a Capitol Hill Reception on February 24th in conjunction with the Lobby Day portion of the Institute. As part of its policy outreach, the Coalition is encouraging attendees to schedule a... Read more
Loans to subprime borrowers have reached the highest level since the start of the financial crisis, driven by a boom in auto lending and a new crop of companies extending credit. Almost four of every 10 loans for autos, credit cards and personal borrowing in the U.S. went to subprime customers during the first 11 months of 2014. That amounted to more than 50 million consumer loans and cards totaling more than $189 billion, the highest levels since 2007. Car loans account for most of the increase, totaling $129.5 billion during the first 11 months of 2014, 68% of consumer subprime-loan... Read more
OneUnited Bank will close one of its five branches in Los Angeles and consolidate it into a nearby branch, citing a decision by the building’s landlord not to renew the lease. OneUnited initially acquired the branch through its merger with Founders National Bank in 2001. “Clearly the lease and the rent is one factor, and we clearly will save money,” said Teri Williams, OneUnited’s president. But with another branch less than a mile away on the same street, “consolidation is the best thing.” The bank is trying to find positions for most of the workers at the merged location... Read more
A hacker group has stolen as much as $1 billion from banks and other financial companies worldwide since 2013 in an unprecedented cyber-robbery, according to a report by computer security firm Kaspersky Lab. The gang, Carbanak, has targeted as many as 100 banks, e-payment systems and other financial institutions in 30 countries and is still active. The criminals infected bank employees’ computers with malware, which then spread to internal networks and enabled video surveillance of staff. That let fraudsters mimic employee activity to transfer and steal money. The gang also used access to... Read more
Washington, D.C.-based Industrial Bank, fresh off a $2.2 million property sale in late December, is now mulling which of several other properties it owns to put on the market as part of a capital raise over the next two years. The bank hopes to generate about $10 million from the sale of several properties. The bank's President and CEO B. Doyle Mitchell, Jr. expects the money to help pay for ongoing branch renovations and potential expansion. "It's not going to bring all the capital into the bank right away," Mitchell said. "We are going to take it slowly and hope the... Read more
At a Senate Banking Committee hearing on February 12, community bankers pushed for a bill to shield them from new rules on mortgage loans, trading operations and other mandates. Democrats on the committee were divided on the issue, with moderates like Sens. Heidi Heitkamp (D-N.D.) and Jon Tester (D-Mont.) agreeing that community bankers are struggling and need eased regulations. Elizabeth Warren (D-Mass.) broke with the moderates, citing statistics that show small lenders’ profits have risen over the last year. “[T]he financial performance of the community banks shows that... Read more
Many black-owned banks are struggling to hold on in the face of the economic devastation that has ravaged many of their customers and increased competition from mainstream banks. The FDIC counted 25 black-owned banks remaining in the country last year, down from 48 in 2001. Sixty percent of black-run banks lost money in 2013, threatening institutions that often are the only financial institutions doing business in underserved areas. "This is such an extremely important sector of the banking community," said Michael A. Grant, president of the National Bankers Association, the lobbying group... Read more
Minneapolis-based Sunrise Banks has posted its 2014 Corporate Social Responsibility report via Pinterest. The bank made 184 community development loans in 2014 totaling $106.4 million. Nearly $71 million were made in Sunrise Banks' CDFI Program investment area, which includes the cities of Minneapolis and St. Paul, Minn. The bank has deployed $13 million in New Markets Tax Credit allocation in 2014. The report also highlights Sunrise Banks’ Socially Responsible Deposit Fund, which allows customers to designate any deposit account to be used for community development... Read more
City lawmakers in Santa Fe, N.M. have revived debate over public banks with a proposal to form a municipal bank that support affordable housing efforts and lending to the underbanked. And, perhaps for the first time, some bankers are interested -- if the initiative will help them make more loans. Previous public banking proposals, many modeled after the Bank of North Dakota, have rarely made it past the drawing board. But public banking advocates hope that smaller municipal banks might be easier to realize. The Santa Fe City Council last month approved a feasibility study to look into a... Read more