Recent News
Pan American Bank has been out and about in the community, sponsoring booths at Chicago-area events. The bank sponsored a booth at Melrose Park, Illinois' Our Lady of Mount Carmel Feast, the longest running religious feast in the United States. Pan American showed their support with free giveaways and fresh roses which were distributed to the participants of the procession on Sunday. Pan American also sponsored a booth at the 4th Annual 5k Safe Run to End Homelessness, an event organized by A Safe Haven, a non-profit organization dedicated to helping homeless achieve self-... Read more
Southern Bancorp has agreed to acquire the Bank of Bolivar County, which operates two branches in the Mississippi communities of Shelby and Mound Bayou. “Across the country, we’re seeing a trend of small, rural community banks closing their doors due to increased regulatory costs and declining profit margins,” said Southern Bancorp, Inc. CEO Darrin Williams. “And larger banks are usually unwilling to purchase them... Southern, however, is different. Our mission is to focus on rural, distressed markets, because we understand that without access to responsive and responsible... Read more
Amazon's launch of its new mobile card reader, Amazon Local Register, presents direct competition to mobile card processor Square as well as banks that offer their own mobile card readers, such as PNC, BBVA and Bank of America. The new Amazon reader has a low introductory swipe fee of 1.75% that will last through the end of 2015. After that period, the rate will bump up to 2.5% -- still below Square's 2.75%. Amazon is able to keep its pricing so low because many of its customers have pre-registered their bank account numbers for ACH transactions, which are less expensive than credit cards... Read more
JPMorgan is joining a growing class of Detroit business leaders funding revitalization efforts in the city. The bank has pledged a total of $100 million: $25 million to renovate of abandoned homes, $12.5 million to train residents for better jobs and $12.5 million to grow small businesses and improve city infrastructure. The biggest piece, $50 million, will go to a pair of community lending groups, Capital Impact partners and Invest Detroit, to support the redevelopment of a ring of neighborhoods teetering between stagnant distress and burgeoning revitalization. The hope is that JPMorgan's... Read more
Ongoing protests around the death of Michael Brown have called attention to rising poverty and shifting demographics in suburbs like Ferguson, Mo. Ferguson went from 85 percent white in 1980 to 67 percent black by 2012. The city’s poverty rate doubled between 2000 and 2012, resulting in one in four residents living below the federal poverty line. The changes in Ferguson are representative of the growth of suburban poverty nationwide. Within the nation’s 100 largest metro areas, the number of suburban neighborhoods where more than 20 percent of residents live in poverty more than doubled... Read more
Research by the New York Fed gives new details on the growth of subprime auto lending. Since the market hit bottom in Q4 2009, balances have risen for the auto loan industry as a whole. But the growth has been most pronounced among the riskier borrowers, who also experienced the most severe contraction during the crisis. The dollar value of originations to people with credit scores below 660 has roughly doubled since 2009, while originations for the other credit score groups increased by only about half, owing primarily to an increase in the average size of the loans. The bulk of the... Read more
The recovery in housing is fueling a niche market for newly minted bonds backed by mortgages on homes on the verge of foreclosure. The investors making money off the bonds include American mutual funds attracted by yields of about 4 percent and quick pay outs. The yields look enticing compared with the current 2.42 percent yield on a 10-year Treasury note. The catalyst for the emergence of the market was a decision by HUD to begin selling some of the most severely delinquent mortgages guaranteed by the Federal Housing Administration to avoid losses to taxpayers. Since 2010, HUD has sold... Read more
James Sills, Secretary of the Department of Technology for the state of Delaware, has been appointed the new CEO of historic Durham, N.C.-based Mechanics & Farmers Bank. “I think it’s important to embrace the history and tout the founders and tout what the banks mean to the community,” Sills said. But the bank is also looking ahead. This week, the bank started transitioning to a new tech platform, Fiserv. Sills also plans to initiate a complete overhaul of the M&F website and introduce a new mobile app. Kim Saunders, former CEO and current CEO of the bank’s holding company, M&F... Read more
Boston-based OneUnited Bank has announced the winners of its annual I Got Bank! Essay Contest. The three winners were Chase Abner, 12, of Los Angeles, Calif., Damoni Swain, 10, of Dorchester, Massachusetts, and Amaya Horace, 12, of Bowie, Maryland. Each won a $1,000 savings account for their essays on financial literacy. “We are very proud of all of the youth and their families who participated,” said Teri Williams, OneUnited Bank president and author of "I Got Bank!" a financial literacy guide targeted at urban youth.
Melrose Park, Ill.-based Pan American Bank has received approval from federal and state authorities to acquire the Palatine, Ill.-based Bank of Palatine. The deal is expected to close by early September and allow Pan American to increase its assets by about $50 million. Bank of Palatine President Winn C. Davidson will retire upon completion of the acquisition. "This merger provides us the opportunity to expand our high level of service to clients throughout the Northwest suburbs," said Pan American Co-CEO Nicholas Giuliano. "It also represents the next step in our strategy... Read more
An investigation by New York State Prosecutors has culminated with criminal charges against a dozen companies and their owner, Carey Vaughn Brown. Prosecutors accuse Brown and his companies of enabling payday loans that flouted the state’s limits on interest rates. They allege that Brown assembled “a payday syndicate” that controlled every facet of the loan process. The operation began when borrowers applied for loans on websites like MyCashNow.com. From there, borrowers’ information was passed to another company that originated the loans. The information then wound up with yet another... Read more
Longform rantmaker John Oliver criticized the payday lending industry on his HBO show, Last Week Tonight (warning: language not safe for work). Oliver's show has won praise recently for its ability to make complex issues accessible to large web-savvy audience. In the segment, Oliver lambasted slides from a payday lender's employee training manual which instructed employees to lure borrowers into a cycle of debt. Oliver also addressed states' efforts to stamp out the most predatory practices, likening efforts to restrict the industry to "legislative... Read more
Banks are lending to companies and individuals at the fastest pace since the financial crisis, propelling profits to near-record levels. U.S. banks posted $40.24 billion in net income during the second quarter, the industry's second-highest profit total in at least 23 years. Banks set aside less money to cover soured loans, helping to boost profits. At the same time, overall loan growth increased at its fastest quarterly pace since the financial crisis, topping $8 trillion in total loans outstanding for the first time since SNL began tracking the data in 1991. Commercial lending rose at an... Read more
A new guide aimed at public health advocates commends CDFIs for their role in financing healthy food retail options in low and moderate income communities. According to the guide, CDFI financing is useful for food retailers because CDFIs offer flexible terms and the ability to retire debt at an affordable rate over a long period of time. That flexibility is helpful as retailers establish their businesses and can offset the higher cost of opening stores in underserved areas. The CDFI Fund's Healthy Food Financing Initiative has expanded the activity of CDFIs in food retail financing,... Read more
The FTC and the White House have recently called for legislation that would inform users about the data social media companies collect and sell amid concerns about discriminatory data profiling. Seeta Peña Gangadharan of the New America Foundation echoes these concerns, arguing that big data can facilitate discriminatory practices in lending, hiring and marketing. Jake Rosenberg of Lendup counters that companies like his use big data to help lenders extend credit to the underbanked by creating new sources of credit behavior data for borrowers with scarce credit histories. Maurice Mitchell... Read more
ActiveHours is a new Palo Alto startup which aims to divert business from payday lenders by eliminating the very concept of a payday. The startup, which recently raised $4.1 million, distributes an app that allows hourly workers to immediately access pay they’ve already earned, without having to wait for their employer’s standard pay cycle. Users can see how much money they have earned and transfer any percentage of it into their bank account, essentially giving the user a cash advance. When payday rolls around, ActiveHours withdraws the same amount from the user’s account. ActiveHours... Read more
The CDFI Fund has opened the 2014 round of the New Markets Tax Credit Program. The program's notice makes available up to $5 billion in tax credit allocation authority. The New Markets Tax Credit provides a tax credit to investors who make qualified equity investments in Community Development Entities (CDEs) which then invest the capital into projects in low-income communities. Since its inception, the NMTC Program has made 836 awards to CDEs totaling $40 billion in tax credit allocation authority. The deadline for CDE Certification applications is August 22. The deadline for the NMTC... Read more
Bank employees are giving customers misleading or inaccurate information about their overdraft protection options, according to mystery shoppers working with the Woodstock Institute. The Federal Reserve Board requires that bank customers must “opt in” to banks' overdraft products. But mystery shoppers’ conversations with bank representatives revealed persistent misinformation about overdraft coverage. Often, employees did not explain the opt-in requirement and led people to believe that overdraft coverage was an automatic account feature. Representatives frequently gave inconsistent,... Read more
The $30 billion banks collect in overdraft fees each year may shrink if the Consumer Financial Protection Bureau imposes new rules on the practice. The spectre of new rulemaking has arisen in the wake of a new CFPB report which found that overdraft and non-sufficient funds fees account for about 75 percent of opted-in consumers’ total checking account fees, averaging over $250 per year. “Despite recent regulatory and industry changes, overdrafts continue to impose heavy costs on consumers who have... Read more
The acquisition of First Tuskegee Bank in Alabama by CDFI bank Liberty Bank & Trust Co. of New Orleans should have been routine. The deal would combine two small minority-owned institutions in the Southeast, giving them additional heft to cope with new regulations. It would also help Liberty expand its originations of consumer, mortgage and commercial loans while adding more low-cost deposits. But federal and state regulators still have not approved the application they received nearly a year ago, marking an unusually long delay for an acquisition of this size. The companies have... Read more