Recent News
Albina Community Bancorp in Portland, Ore., has filed for bankruptcy. Albina had been deferring interest payments to Hildene Capital Management for five years. The hedge fund invested in a collateralized debt obligation backed by Albina's debt. But the bank has been operating under a written agreement with the Federal Reserve Board that forbids it from paying its trust-preferred debt without regulatory approval. Hildene had threatened to force the company into involuntary liquidation if it defaulted. The company's board resigned as of the bankruptcy filing, which showed $7... Read more
The annual Temenos banking survey has found growing anxiety among bankers about competition from tech giants. Respondents say their institutions are taking steps toward innovation, but nevertheless doubt that banks will make major updates to mission-critical systems until regulators force them to. Twenty-three percent of banks identify competition from tech vendors as a concern and 67 percent intend to boost IT spending. Customer loyalty was an even greater concern – and 30 percent of bankers said it was their biggest worry. One solution: building a better branch. Although the importance... Read more
A federal judge shut down two online payday lenders operating under the umbrella of the Hydra Group after the CFPB and FTC said they extracted more than $36 million from customers who never agreed to loans. The operations bought personal data about people who were researching loans at other websites, deposited unsolicited money in their accounts and debited finance charges that exceeded the amount of the deposits. When some consumers tried to stop their banks from debiting the money, the companies produced fake loan documents testifying to the debt. The lenders made mostly unsolicited... Read more
A new analysis of Home Mortgage Disclosure Act data by the Urban Institute shows that the current tight credit environment has disproportionately affected African American and Hispanic households. African American and Hispanic borrowers took out a greater share of mortgages as housing prices neared their peak, the worst time to take out a loan. Then, as prices began to drop, tightened credit standards left many unable to obtain or refinance a loan. From 2005 to 2012, the share of loans made to African American and Hispanic households dropped from 23 percent to 12 percent, locking many... Read more
The Consumer Financial Protection Bureau has proposed bringing the financing units of the big automakers under federal supervision for the first time, a move that would let the agency examine the lending arms of Toyota, Ford and Honda. The bureau has grown concerned that some car buyers are being steered into expensive loans when they qualify for cheaper ones and being misled about the terms and benefits of add-on products. The proposed rule would extend the bureau’s current oversight of bank auto lenders to cover 38 auto finance companies that make, acquire or refinance 10,000 or more... Read more
A new startup, TrueAccord, hopes to bring debt collection into the internet age. The company, which recently attracted $5 million in venture capital funding, uses behavioral analysis make debt collections less intimidating. TrueAccord tailors its campaigns to debtors, building a profile of the consumer and figure out the right course of action to collect on a debt. "I've been sitting here listening to breakup songs and eating ice cream because I feel like you're avoiding me," says one message targeted at millennials, who enjoy ironic humor according to TrueAccord’s data. TrueAccord uses... Read more
Brandon, Miss.-based Community Bancshares continues to run far ahead of the state’s other banks in the amount of money loaned to businesses through the Small Business Administration. The bank has led the pack since 2010. From Oct. 1 through Aug. 31, Community Bancshares made 80 businesses more than $47 million in SBA loans. The company is one of only a handful of Mississippi banks the SBA designates as “Preferred Lending Partners,” authorizing the banks to approve SBA loans without the lengthy reviews normally required. “You know they know this stuff very well and can go... Read more
Hildene Capital Management, a New York distressed-debt hedge fund, has threatened Portland, Ore.’s Albina Community Bancorp with involuntary bankruptcy if it defaults on its trust-preferred debt. Albina has been deferring interest on its trust-preferreds for five years and will soon default on about $6 million in debt and accrued interest if it doesn't pay. Complicating matters, Albina is currently under regulatory orders barring them from paying trust-preferred creditors. Last year, Albina sold a 90% stake in its bank to Beneficial State Bancorp in... Read more
Reversing an industry trend of decreased rural lending, Southern Bancorp's 2013 annual report shows lending growth to $742 million, including 562 small business loans and microloans. Among customers profiled is Robert Heard, founder of Trumann, Ark.-based cabinet manufacturer Tru-Cab. As a young man, Heard worked at the Singer sewing machine factory by day and in his garage cabinet workshop by night. With Southern's help, Heard left Singer to open a Tru-Cab, a small shop which soon prospered. In the 1980's, the Singer factory closed and the building was vacant for years.... Read more
With help from Virginia Community Capital, Khans Builders & Contractors has converted a historic building in Roanoke, Va. into a 90-apartment mixed income space. VCC provided construction financing, in partnership with HomeTown Bank and Community Bankers’ Bank and with permanent financing from The Virginia Housing Development Authority. This is a dream come true for Faisal Khan. For years, he had driven past the once-vibrant Ponce de Leon hotel and imagined ways to revitalize the building. The Khans paid great attention to detail to restore original architectural... Read more
Virginia Community Capital has successfully raised and self-funded $10 million to capitalize the Virginia Fresh Food Loan Fund, a milestone in VCC's Clinton Global Initiative America commitment to facilitate healthy food enterprises in urban and rural communities throughout Virginia. The fund offers small businesses technical assistance and lending opportunities to encourage the sale of market healthy items and foster the expansion of food hubs in rural communities. VCC has already deployed $600,000 from the fund to projects increasing access to healthy foods. “According... Read more
The CDFI Fund is recruiting reviewers with considerable community economic development finance expertise for the 2014 round of the NMTC Program. Working in teams, but reading each application independently, reviewers will evaluate NMTC applications using the CDFI Fund’s review criteria and rate the application's business strategy and community outcomes sections. The entire process will be web-based. Due to conflict of interest concerns, employees of organizations applying for the 2014 NMTC round and employees of organizations which intend to receive loans or investments from organizations... Read more
Virginia Community Capital, in partnership with Altria Group and the City of Richmond, has created a new loan fund program to identify small businesses who wish to relocate or expand along Richmond's Jefferson Davis Corridor. The corridor was once a thriving commercial area, but declined after the construction of I-95 rerouted traffic from the Jefferson Davis Highway. Today, despite bordering several historic neighborhoods, the corridor is an underserved area which suffers from abandoned structures and a high commercial vacancy rate. Virginia Community Capital hopes its... Read more
Apple has announced that its new generation iPhones and the Apple Watch will incorporate Apple Pay, a new mobile wallet. The product could give Apple a leg up on mobile payments, a field many companies have attempted to expand with limited success. Using a credit card on their device, customers wave their phone or watch in front of a terminal to pay. The payment is delivered to the terminal using near-field communication, or N.F.C. chip. Apple hopes that its promises about security, including that credit card information will not be stored on the smartphones or devices or on Apple’s... Read more
The CDFI Fund has announced it will launch a new Capacity Building Initiative training and technical assistance series later this year titled Expanding CDFI Coverage in Underserved Areas. The series, presented by Opportunity Finance Network, will provide specialized training and technical assistance to CDFIs to extend their reach into underserved communities that lack a CDFI presence. “By expanding the ability of CDFIs to have impact in areas currently lacking adequate financial services and lending opportunities, this training series will directly align with the CDFI Fund’s primary... Read more
Chicago real estate magnate Daniel Goodwin describes his ownership of Pan American Bank as a labor of love, his way of promoting entrepreneurship in disadvantaged neighborhoods. Goodwin sets strategy and handles board matters as chairman of Pan American's holding company. “The most satisfaction I get from banking is working with Pan American Bank in making creative loans to startup businesses, particularly in the inner city,” Goodwin said. Since Goodwin bought the bank in 2007, its size has increased rapidly; after Pan American's recently announced acquisition of Bank of... Read more
Home Depot has confirmed that its payment systems were breached, potentially affecting customers who used a payment card at the stores since April. It is not yet known how many consumers were affected by the breach or to what extent their credit and debit card information has been compromised, but the company says no debit pin numbers have been compromised. Home Depot will provide free identity protection services to any customer who used a card at its stores since April. If a breach did begin in April, it would have overlapped with the retailer’s busy spring shopping season, which... Read more
Regulators have unveiled a second round of CRA reforms, this time increasing banks' opportunities to get CRA credit for small-dollar loan programs. The new reform, instituted by the OCC, FDIC and Federal Reserve Board, represents an incremental change in CRA policy, changing to the agencies' "Question and Answers" document used to interpret CRA enforcement procedures. CRA credit for small-dollar lending is already available as part of the CRA exam's lending test. But under the proposed revision, small-dollar lending could garner additional consideration as one of a number of "innovative or... Read more
Chicago's Urban Partnership Bank held a Customer Appreciation Day to celebrate the Bank's fourth anniversary. Each branch provided refreshments and offered an opportunity to win tickets to a Chicago Sky basketball game. At the South Shore Summer Festival, Urban Partnership volunteers donated their time to share information about the impact of their financial services and products. Volunteers from Urban Partnership Bank also teamed up with the Gary Comer Youth Center for a gardening day, harvesting crops, prepping soil and helping build winter hoop houses.
James Sills, the new president and CEO of Mechanics & Farmers Bank, says that growing security threats will make experience in both financial services and technology more attractive to banks. "The bad guys are extremely sophisticated," Sills said. "They have some unbelievable tools to penetrate networks, databases and point-of-sale machines." In addition to maintaining web security, Sills will oversee implementation of M&F's huge conversion of its core processing system to Fiserv, a new platform that should help M&F expand into new product offerings. Sills... Read more