Recent News
Lawmakers, financial groups and U.S. Postal Service employees met this week to discuss a proposal by the postal agency's inspector general to introduce lending and other services at post offices nationwide. Speakers at the conference included Sen. Elizabeth Warren (D-Mass.), who lauded the idea as a way to provide affordable financial products to the underbanked, and Rep. Darrell Issa (R-Calif.), who raised doubts about the viability of the plan in what he sees as a troubled industry. According to USPS inspector general David Williams, the agency has already started to hear from... Read more
At a hearing earlier this week, the House Financial Services subcommittee on Financial Institutions and Consumer Credit examined nearly a dozen bills that Republicans say would provide regulatory relief to community banks. At the hearing, community bankers told lawmakers they are being pushed out of business by new rules written in the wake of the financial crisis that are better suited for big banks. Democrats on the panel warned against giving banks a “get out of jail free card.” Republican members also took the opportunity to express concerns with the Justice Department's Operation... Read more
Housing finance experts Ellen Seidman, Laurie Goodman and Jim Parrott discuss the history of the stalled Johnson-Crapo GSE-reform bill and the likelihood of further action. Although Johnson-Crapo contained an incentive intended to ensure that the system would serve low income borrowers, progressive members of the Senate Banking Committee were uneasy with the impact of increased risk-based pricing and higher capital requirements on the cost of borrowing. Although consensus emerged on many issues, addressing the concerns of the progressives became incompatible with retaining the bill’s... Read more
First Bancshares of Hattiesburg, Miss., has redeemed the preferred stock BCB Holding in Mobile, Ala., issued to the Treasury Department under TARP's Capital Purchase Program (CPP). The First Bancshares bought BCB on July 1 and redeemed the $2.1 million in TARP stock earlier this week. First Bancshares also assumed a $600,000 promissory note to Alostar Bank. The total consideration for BCB also included $1.3 million in cash and 158,000 shares of common stock valued at $2.3 million.
David Reiling, CEO of Sunrise Banks, appeared on Minneapolis' ABC affiliate to discuss the impact of B-Corporations, which have recently become recognized in Minnesota. B-Corporations are able to consider impact metrics alongside profits when making business decisions. Mr. Reiling expects a flood of applications for B-Corp status "Looking at a public benefit corporation, that corporation is going to take into account not only the shareholder but also the employees, its community, the environment, and its customers," Reiling said.
More than 350 students from suburban Chicago's Streamwood High School have dedicated over 2,240 hours this year to the First Eagle Bank Financial Scholars Program. Through the program, First Eagle Bank sponsors student access to EverFi-Financial Literacy, a web based resource that teaches the basics of personal finance. The course covers a variety of topics including credit scores, insurance, student loans, taxes, stocks, 401k’s and other critical concepts.
The CFPB has reached a $10 million settlement with ACE Cash Express, one of the nation’s largest payday lenders, for its illegal debt collection tactics. The CFPB says ACE threatened consumers with extra fees, being reported to credit reporting agencies and criminal prosecution if they didn’t make payments. Some collectors repeatedly called consumers, their offices and even their relatives, disclosing information about their loans. Of the $10 million settlement, $5 million will be paid to... Read more
Banks are so becoming desperate for checking customers and fee income that they have returned to an old-school advertising method: prize giveaways. And they seem to be working. Boston-based First Trade Union Bank has opened 230 checking accounts this year by offering consumers a chance to earn $100 in cash bonuses. Boston's Eastern Bank offers new checking account customers in April and May four hours of house cleaning services valued at $165. At East Boston Savings Bank, consumers can get a charcoal barbecue grill or a beach chair. The campaigns are aimed at consumers ready and willing to... Read more
A report by the Cleveland Fed finds that CDFI Fund awards substantially improve institutions' dedication to lending in distressed areas. The study compares the increase in lending at CDFI credit unions that receive grants to the baseline lending level of credit unions that apply but are rejected. The institutions which received CDFI grants increased lending by 3 percent on average. For every dollar awarded, awardees loaned 45 cents to borrowers in the first year and up to $1.60 within three years. The authors note that the CDFI Fund's core program works well because of its institutional... Read more
Urban Partnership Bank has made a $1.6 million commercial real estate loan for casual dining franchise Culver’s to acquire property for their first restaurant in Chicago. Construction of the new restaurant, located near Chicago's Wrigley Field, is expected to be completed prior to opening day of the 2015 baseball season. Justin Obriecht, the Culver’s franchisee who is bringing the burger chain’s first restaurant to the city, wants to add about 2,500 square feet on the property's first floor to make room for the restaurant. He also plans to add two new floors with six... Read more
The CDFI Fund is requesting public comment on a new annual reporting form for all certified CDFIs. The objective of the new Annual Certification and Data Collection Report Form is to reduce the burden of the recertification process. It will also require new annual financial and impact data, a change the CDFI Fund hopes will enable them to track the financial health and accomplishments of CDFIs. In particular, the CDFI Fund seeks input on whether the proposed form is... Read more
The FDIC’s Division of Depositor and Consumer Protection will host a webinar, Model Approaches to Community Bank/CDFI Partnerships on July 31, 2014, from 2:00 p.m. to 3:30 p.m. The webinar accompanies the recent release of the FDIC resource guide, Strategies for Community Banks to Develop Partnerships with CDFIs, which lays out strategies for community banks to identify and evaluate opportunities to collaborate with CDFIs. The program includes presentations on model partnerships between banks and CDFIs as... Read more
Simmons First National Corp. will donate a branch to Arkadelphia, Arkansas-based Southern Bancorp upon finalizing its acquisition of Delta Trust & Bank. The branch transfer allows Simmons First to adhere to federal regulations limiting acquisitions in places where banks already hold significant market share while also supporting Southern's community development work. “Our focus is specifically on rural communities just like Eudora, which means we are aware of both the challenges they face and the opportunities that exist," Southern Bancorp Inc. CEO Darrin Williams said... Read more
The First Bancshares Inc. of Hattiesburg, Mississippi has completed its acquisition of Bay Bank and its holding company, BCB Holding Co. Inc. The acquisition brings The First's total locations in Mobile and Baldwin counties to 10 and gives the company the largest market share among community banks in those counties. "We are excited about the opportunities that this merger will create in the Mobile market," said M. Ray "Hoppy" Cole, president and CEO of The First. "The combination of Bay Bank and The First will create a community bank focused on its local markets with the... Read more
The CDFI Fund has released its FY 2013 Year in Review report detailing impact metrics for award programs. In FY 2013, $172.6 million was awarded to 201 organizations by the CDFI Program (including healthy foods) and the Bank Enterprise Award Program awarded $17 million. BEA Program applicants increased spending on community development projects by $493.5 million over the prior year. That includes a $427.8 million increase in loans and investments in distressed communities as well as a $55.4 million increase in loans, deposits and technical assistance to CDFIs and a $10.3 million increase... Read more
Urban Partnership Bank's newsletter details the bank's Detroit redevelopment projects. Work is underway on Urban Partnership's redevelopment of a 126,000 square-foot building into rental housing and office space for the Archdiocese of Detroit. The bank's increased presence on Detroit holds promise for boosting the city's economy, says Urban Partnership bank senior business banker Beverley Loyd. "This is a great opportunity to help with the ongoing revitalization of Detroit. Creating good jobs, developing quality affordable housing and helping small businesses grow are... Read more
Mortgage lenders and investors have been desperately trying to figure out how to originate non-QM loans that offer lenders the kind of profits last seen during the days of subprime lending. At a time when loan volumes have plummeted, lenders can charge consumers significantly higher mortgage rates for these products. The first step for many lenders has been introducing niche-products safe enough to compensate for legal dangers. These lenders have introduced loans for self-employed borrowers, foreign nationals and borrowers with blemished credit from a past short sale or foreclosure. They... Read more
The latest edition of the Pan American Bank Post is out with the Chicago bank's latest community impact news. Pan American employees volunteered at a number of neighborhood events recently, including Saint Anthony’s Health Fair. The event featured carnival games and food from local restaurants, along with health advice, free immunizations and free health screenings for residents. Pan American Bank employees also participated in Neighborhood Housing Service's Neighborworks day by refurbishing Chicago's Unity Park Garden with some planting and grooming.
First Bancshares received a profile in the Hattiesburg American for its continued service to local customers. “Hattiesburg is a very robust economy — we’ve got two medical centers, two universities, a military presence with Camp Shelby,” said M. Ray “Hoppy” Cole, president and CEO of First Bancshares and The First. “All those things help give it a stable, growing economy, and stability and growth is good for banking.”
Despite the notoriety that subprime loans gained during the financial crisis, they are re-emerging as one answer to the tight lending standards that have shut out millions of would-be homeowners. Subprime loans, which accounted for about 15 percent of all new home loans in 2005 and 2006, are now just 0.5 percent of the mortgage market. Only a handful of lenders are offering them, at interest rates from 8 to 13 percent. But the market is picking up. The number of lenders responding to inquiries from subprime borrowers started to catch up to the number responding to prime borrowers beginning... Read more