Recent News
A new study from Harvard’s Kennedy School of Business shows that the decline in community banks has accelerated since passage of the Dodd-Frank banking reforms in 2010. The study found that the share of banking assets controlled by community banks has declined by 12 percent since 2010 -- nearly double the rate of decline in the previous four years. But industry analysts have cautioned against attributing the trends exclusively to Dodd-Frank. About half of Dodd-Frank regulations still haven’t been implemented and... Read more
A bill introduced in the House of Representatives would make the New Markets Tax Credit permanent. Introduced by Reps. Pat Tiberi (R-Ohio), Richard Neal (D-Mass.) and Tom Reed (R-N.Y.), the bill would also provide an increase in the annual NMTC allocation and provide Alternative Minimum Tax (AMT) relief for NMTC investments. As a result, NMTC investors would receive the same consideration under the AMT as is currently provided to investors in many other federal tax credits. “I’ve seen first-hand the benefits of the New Markets Tax Credit in the 12th Congressional District,” said Tiberi. "[... Read more
The CDFI Fund has invited comment on the CDFI Program and Native American CDFI Assistance Program (NACA Program) Applications. The fund seeks particular comment on whether the requested information is conducive to the fund’s goals, the degree of burden entailed in the collection of information, ways to enhance the quality of the information and ways to minimize the burden on respondents, including through the use of automated collection techniques or other forms of technology. The deadline for comment submission is April 12, 2015.
Urban Partnership Bank Senior Commercial Banker Jeffrey Wright spoke in an interview about his work on the Chicago’s Business Leadership Council’s emerging leaders group. The council’s mission is to create jobs, opportunities and leaders in the black community. Wright was born on Chicago’s West Side, where he was raised by a single mother on a fixed income. Now he has an undergraduate degree from Georgetown, an MBA from Northwestern’s Kellogg Business School and is a senior banker at Urban Partnership, where he is being groomed to be a future CEO. “I have direct access to... Read more
Ho-Chunk Inc., the Winnebago Tribe of Nebraska's economic development corporation, has become a major shareholder in Native American Bancorporation, the Denver, Colo.-based holding company of Native American Bank. The bank is owned by 28 federally recognized tribes, Alaska Native Corporations and tribal organizations. “We have made a concerted effort to source projects that meet the bank’s mission while providing economic diversity and meaningful jobs," said Thomas Ogaard, president and CEO of Native American Bank and Native American Bancorporation. "The capital support... Read more
Members of BancAlliance, a consortium of about 200 community banks, will start using Lending Club, a website that facilitates loans to individuals, to build new portfolios of consumer loans. The banks will each commit to buy a certain amount of loans from Lending Club, which will vet borrowers for their ability to repay. Until now, small banks generally haven’t been able to justify the cost of underwriting unsecured loans of less than $35,000 without requiring collateral because big banks can do so much more efficiently. By relying on Lending Club’s software to quickly evaluate a borrower’... Read more
Broadway Federal Bank avoided failure during the Great Recession and now appears on track for a full recovery. In 2008, the bank received $9 million from Treasury's Troubled Asset Relief Program to stay afloat. Treasury and the nonprofit NCIF, which had backed Broadway Federal's 2013 recapitalization, subsequently agreed to convert their preferred shares to common stock — giving up half the amount owed them. Now, in Broadway Federal's Q3 2014 financial report, the bank's net income has risen to $765,000, up from $584,000 a year earlier. "In October, we raised $9.7 million... Read more
In a wide-ranging interview, Industrial Bank President B. Doyle Mitchell discussed the bank's history, its positive reputation among D.C.-area businesses, and the burden of regulation for community development banks. "There's way more regulation that we have to adhere to... It's more difficult to help people. And I grew up in a business where I saw how we were helping people as a financial institution, we were able to make money at the same time -- we were able to do well and do good at the same time. Now there's so many "t's" that need to be crossed, so many "i's" that... Read more
President Obama has released the Administration’s FY 2016 Budget proposal. Included is total funding of $233.5 million for the CDFI Fund, a slight increase from $232 million in FY 2015. Once again, the president’s proposal eliminates funding for the Bank Enterprise Award. However, it includes increases to other CDFI Fund programs: $157.5 million for the CDFI Program, $35 million for the Healthy Food Financing Initiative and $16 million for the Native American CDFI Assistance Program. It also proposes permanently extending the New Markets Tax Credit Program at $5 billion per year, extending... Read more
The CFPB is expected to release rules early this year that will allow it—for the first time—to exercise the authority it was given under the Dodd-Frank Act to regulate payday loans. The CFPB says state laws governing the industry often fall short and that fuller disclosures of the interest and fees may be needed. Although Dodd-Frank bars the CFPB from capping interest rates, the CFPB has a number of options, including deeming industry practices unfair, deceptive or abusive to consumers. The agency is also considering tighter rules to ensure a consumer has the ability to repay. That could... Read more
A report by the Pew Charitable Trusts finds a close relationship between bank overdraft fees and customers closing checking accounts. The report compares the experiences of high frequency overdrafters, who incur more than four debit card overdrafts a year, and those of low-frequency overdrafters, who paid one to three overdraft penalties. High-frequency overdrafters paid an average of $95 in total fees for their last negative balance, nearly twice the $51 low-frequency... Read more
Spring Bank is supporting the growth of small businesses and startups in the Bronx through a partnership with the Business Outreach Center, a CDFI-certified small-business development organization. In the summer of 2014, Spring Bank wrote a letter of credit to help the Business Outreach Center secure the lease for the Bronx Business Incubator, a new space for entrepreneurs to conduct business, engage in workshops and network with peers. “[A] majority of small businesses get their first loans from community banks," said Demetris Giannoulias, founder and chairman of Spring... Read more
A new study by the National Federation of Community Development Credit Unions examines the financial needs of very low income consumers. Many very low income consumers interviewed for the report contrasted the simplicity of dealing in cash to the surprise fees and delayed payments they experienced at financial institutions. They expressed a fear of institutions in general and a general sense that they “didn’t belong there.” The report stresses the importance of relationships and guidance in serving very low income consumers. It also cautioned against product promotion, which is often... Read more
OneUnited Bank and the African American Film Critics Association last week presented “Money on My Mind: Film & TV Industry,” a celebrity panel discussing behind-the-scenes career opportunities in the television and film industry for African-Americans. Panelists at the Los Angeles event also discussed the recent increase in black films that have been both green-lit and experienced box office success. OneUnited Bank hopes the event will advance its goal of building long-term wealth in the black community. “It is amazing how many unsung careers there are in the business... Read more
David Reiling, chairman and CEO of St. Paul-based Sunrise Banks spoke at a roundtable on equity crowdfunding with the Minneapolis/St. Paul Business Journal. "I view [equity crowdfunding] differently than a contrary type of view where this is just a competitor... [T]he fact is that when you look at it from complementary view, these small and medium businesses do not have the same type of access to capital that large ones do. And that’s a glaring need... From a banker’s point of view, you have to take an optimistic view of this and figure out how you can be relevant in this... Read more
A new proposal by the CFPB could allow community banks and credit unions to make "qualified mortgages" more easily. Under current rules, lenders with less than $2 billion in assets and fewer than 500 first-lien loans originations per year can attain QM status if loans are held in portfolio, even if a loan's debt-to-income ratio exceeds QM's normal limit of 43%. The proposal would expand that advantage to more banks by raising the origination limit to 2,000... Read more
Kat Taylor, CEO of Beneficial State Bank, has been selected to become one of six Social Impact Fellows at Berkeley's Haas School of Business. The six fellows will serve as mentors to students, speak on panels, attend special events and provide their expertise to programs, centers and the faculty. "These fellows share one thing in common: they are changing the world with their deep and meaningful work connected to social impact and we are honored to welcome them to Haas,” said Laura Tyson, director of the Institute for Business and Social Impact at Haas. In addition to her... Read more
The CDFI Fund has announced a series of workshops to prepare CDFIs and other prospective program participants for the upcoming CDFI Bond Guarantee Program application round. The workshops will provide details on the program and the various ways to participate, including information on the review and evaluation of applications. The first session, for existing and potential qualified issuers, is scheduled for February 26 at 9:00 AM. The second, for interested program participants and potential eligible CDFI applicants, is scheduled for February 27. Registration is required and will be... Read more
For the first time, the FDIC has publicly released guidelines for how examiners should instruct banks to cut off accounts for risky customers suspected of violating the law, a major point of contention in the controversy over the Justice Department's "Operation Choke Point" probe. FDIC staff are required to use a formal, written process in cases where examiners find banks aren't managing the risks of account activity. All recommendations for termination of deposit accounts must be approved in writing by an FDIC regional director. The guidelines come after months of criticism from... Read more
A new SIGTARP report reveals that private investors like hedge funds and others have stepped in and scooped up about 70% of Treasury's auctioned TARP investments in small banks. As the new owners of the bank’s shares, the funds can profit by reselling them back to the bank at a premium. For instance, one winning bidder won the shares for $3 million less than taxpayers had originally paid. Eight months later, the same bidder sold the shares back to the bank at a $1.6 million profit. Treasury has taken steps to work with community banks to restructure the TARP investments -- including... Read more