Recent News
Several national companies that offer small loans at high interest rates have agreed to refund money to more than one thousand Vermont borrowers. The agreement is the result of a lawsuit brought by Vermont Attorney General Bill Sorrell. Vermont is one of 15 states that restrict payday loans, but that hasn’t stopped dozens of unlicensed national lenders from offering the products. Sorrell says settlements reached with three of the lenders and one payment processor will result in refunds exceeding $1 million for borrowers and will stop the companies from issuing any more loans in the state.... Read more
FDIC officials have presented a new white paper exploring how the use of mobile phones could broaden banking access to unbanked and underbanked borrowers. The paper noted that 68% of unbanked adults have access to a cell phone, of which 49% are smartphones. "MFS is likely to be a more useful financial tool for the underserved if ways can be found to reconcile and meet the underserved's needs for electronic transactions with their need for paper payments or... Read more
Virginia Community Capital has partnered with Goldman Sachs on the 10,000 Small Businesses education program, a nationwide initiative offering small business owners training from business experts and peers as well as classes at Babson College. Program participant Merissa Sachs owns personalized clothing vendor Marketing on Main Street. "The personal interaction with Goldman Sachs professionals, Babson professors and my peers was a significant benefit," she says. "I think of Babson as a CEO on my advisory board; I can turn to them at anytime for advice and guidance."
The CDFI Fund has opened the FY 2014 application period for the Bank Enterprise Award Program, making up to $18 million in awards available to eligible banks and thrifts. Application materials are available on the CDFI Fund's website. The award application consists of two parts. The first part must be submitted through Grants.gov by 11:59 p.m. EDT on June 2 and the second part must be submitted through myCDFIFund by 5:00 p.m. EDT on June 4. The CDFI Fund will also be conducting three informational webinars: two focusing on the BEA Program... Read more
Boston based Charles Street African Methodist Episcopal Church has agreed to sell the Roxbury Renaissance Center in order to pay back the nearly $5 million it owes creditors including OneUnited Bank and emerge from bankruptcy. The church already has an offer from a local non-profit to buy the community center for $2 million. OneUnited said the proposition, which would leave OneUnited Bank with a $900,000 loss, still falls short of meeting the church’s obligations. “The bank believes that the proposed sale of certain assets does not maximize value to creditors,” OneUnited... Read more
Several big hedge funds that stand to win billions of dollars for their shares in Fannie Mae and Freddie Mac are said to be backing new investors' rights groups airing attacks ads and statements against the Johnson-Crapo housing finance reform legislation. Hedge fund managers oppose the legislation because it would codify a contentious 2012 change to the terms of Fannie and Freddie shareholders' agreement in which Treasury imposed a sweep on all GSE shareholder company profits. Investors are currently fighting that action in more than a dozen lawsuits. Although the advocacy groups portray... Read more
Stepped-up demands from liberal Democrats and conservative Republicans are threatening prospects for the Johnson-Crapo mortgage market reform legislation. Liberal Democrats want to add mandates requiring private lenders to offer loans to minority groups. Conservative Republicans are insisting that Fannie and Freddie be entirely eliminated. Too much motion in either direction would kill the bill's bipartisan support. Analysts expect the bill to pass through the Senate Banking Committee, but its prospects for passing the chamber are dim with elections looming. Legislators increasingly are... Read more
Walmart has announced a new service allowing customers to make store-to-store money transfers within the United States at cut-rate fees. The offering is aimed largely at lower-income shoppers who often rely on check-cashing stores for simple transactions. Walmart has become a big player in alternative financial products including prepaid debit cards and check cashing. Walmart's new service will offer transfers of up to $50 will cost $4.50 and transfers of up to $900 costing $9.50. In comparison, sending $900 via Western Union could cost as much as $76. But Western Union and MoneyGram... Read more
The shuttered Urban Partnership Bank building in Chicago's South Shore neighborhood will become a canvas for artists until it is redeveloped. The art installations are part of a partnership with The Neighborhood Foundation, a local nonprofit that helps improve vacant buildings with public art. The organization plans to paint a tableau of the neighborhood’s landmarks on the building's boarded up windows, including a bike trail and southbound train. The bank closed on March 22 and many community groups expressed interest in using art to beautify the building. Urban... Read more
The discovery of the Heartbleed computer bug has led regulators to raise alarms over the effect of cybersecurity threats on consumer confidence. The Financial Stability Oversight Council's 2013 annual report highlighted that in the prior year more than a dozen financial institutions "were subject to sustained and persistent cyberattacks." Thomas Curry, head the Office of the Comptroller of the Currency, noted the financial sector is one of the most attractive targets for cyberattacks. It is increasingly dependent on technology--often provided by third-party vendors, creating additional... Read more
Opponents of payday lending worry that a recent Supreme Court decision has removed class-action lawsuits from their arsenal. In the April 2011 case AT&T Mobility v. Concepcion, the Supreme Court upheld the ability of cellular service providers to insert fine-print provisions banning participation in class-action lawsuits into their contracts with customers. Payday lenders often use similar clauses to evade class-action suits. Before the Supreme Court Ruling, lower courts in North Carolina and California ruled those provisions unlawful. In North Carolina, that ruling allowed for a class... Read more
Virginia Community Capital Vice President of Community Investments and Impact Teri Lovelace and Small Business Manager Wayne Waldrop were keynote speakers at the Colonial Beach Virginia Chamber of Commerce Annual Membership Dinner and Awards Ceremony. Waldrop explained that Virginia Community Capital is willing to take on more risks than a traditional bank in order to serve the needs of the community. Ms. Lovelace stressed that VCC believes, “Small businesses are the economic engine of a community,” which is why the bank is committed to providing advisory services which... Read more
Urban Partnership Bank partnered with Mercy Hospital and Roseland Senior Center in support of Money Smart Week, a nationwide event aimed at helping consumers learn to better manage their personal finances. Information Security Manager Donna Pfeil was on hand at the Mercy Hospital event, sharing information about identity theft. Marcus Bennett, Urban Parnership's Pullman Financial Center Manager, spoke with members of the Roseland Senior Center about recovering from financial disasters. The bank also provided a document disposal service, inviting community members to shred... Read more
CDFI data and analysis nonprofit CARS Inc. is launching a financial reporting system for CDFI loan funds. The nonprofit intends the ratings to simplify CDFI finances for investors, including banks looking for credit under the Community Reinvestment Act. CDFI loan funds are unregulated and investors often struggle to gain timely and accurate data, a major obstacle to attracting non-philanthropic capital. CARS currently has ratings and data available for institutions that manage 55% of all CDFI assets. Jeannine Jacokes, CEO of loan fund Partners for the Common Good (and CDBA Senior Policy... Read more
Chicago Mayor Rahm Emanuel has announced a new $26 million loan pool led by Community Investment Corp. and backed by lenders including First Eagle Bank. The fund seeks to increase the supply of affordable units in Chicago communities by enticing local investors to buy abandoned rental buildings. Community Investment Corp. will vet developers with proven track records to take on projects in which renovation costs far outweigh property value. When the rehab is complete the... Read more
Senate Banking Committee leaders may delay the April 29 vote on their mortgage finance reform bill as they struggle to secure additional votes. Chairman Tim Johnson (D-S.D.) and Ranking Member Mike Crapo (R-Idaho) are said to be trying to attract as many as four more votes. The situation has even sparked rumors about whether the original coalition of committee members from both political parties remains intact. Johnson and Crapo's bill would eliminate Fannie Mae and Freddie Mac and create a new housing finance system. But the bill, which would preserve a government guarantee for the... Read more
Facebook is readying itself to provide financial services in the form of remittances and electronic money in Europe. The social network is only weeks away from obtaining regulatory approval in Ireland for a service that would allow its users to store money on Facebook, using it to pay and exchange money with others. Facebook would issue units of stored monetary value that represent a claim against the company. This e-money would be valid throughout Europe. Facebook has also discussed potential partnerships with at least three London start-ups that offer international money transfer... Read more
Regulators' recent signals that they are planning changes to Community Reinvestment Act exams have reignited speculation about possible alterations. Comprehensive refor appears unlikely, but observers see potential for limited action. Changes may include crediting community-related activities done outside a bank's market and broadening the section of the exam focused on branch offerings. Regulators may also heighten the focus on products that specifically benefit low income borrowers and expand the list of community service activities eligible for CRA credit. Other reforms may include... Read more
Finance & Commerce has named Sunrise Banks among the recipients of their Progress Minnesota Award. The award recognizes Minnesota businesses that have shown exemplary creativity, drive and commitment to their causes. Sunrise focuses on economic development in the Twin Cities’ underserved communities with a concentration on Hmong and Somali neighborhoods. “Our brand, from that standpoint, has grown from specifically serving a geographic area to more of a people-based and place-based strategy,” said Sunrise CEO David Reiling.
Payday lenders say big banks are denying them service at the behest of federal regulators. The banks, they contend, are threatening to cut them off unless they stop offering payday loans. In one e-mail publicized by Sen. David Vitter (R-La.), a banker cited regulatory action in a decision to deny credit to a payday lender: “Based on your performance, there’s no way we shouldn’t be a credit provider. Our only issue is, and it has always been, the space in which you operate. It is the scrutiny that you, and now that we, are under.” Federal regulators deny compelling banks to sever ties with... Read more