Recent News
First Bancshares based in Hattiesburg, Miss., has agreed to buy BCB Holding in Mobile, Ala. First Bancshares will pay about $6.6 million for BCB, assuming BCB's debt and preferred stock issued to the Treasury Department. BCB, the parent of Bay Bank, has four branches and about $80 million in assets. "We are extremely excited and look forward to welcoming Bay Bank to our team," Hoppy Cole, First Bancshares' president and chief executive, said. "We believe it is a great combination of two service oriented community banks and by joining forces, we will improve our market... Read more
Chicago-based First American Bank surprised banking analysts with an unusally public debit card fraud announcement released after 18 days of frustration. Their investigation began Feb. 10, when the bank received 11 fraud complaints in one day from checking account cardholders. First American determined that the customers had all experienced fraud right after using their debit cards in Chicago taxis. The bank started shutting down debit cards, issuing new ones and informing customers. At the same time, the bank was trying to get MasterCard and Bank of America to shut down card acceptance in... Read more
Kat Taylor, CEO of One PacificCoast Bank, sat down for a wide-ranging video interview with Forbes Magazine on the state of socially and environmentally-responsible CDFI banks and B-corps. One PacificCoast Bank pursues economic justice and environmental sustainability along with profitability. "We wanted banking to be based on relationships and to produce social justice and environmental well-being at the same time that it's financially sustainable so that it can persist and grow bigger, serving more people and achieving more... Read more
Dealstruck is among a new group of alternative lenders offering a middle path between banks and cash advance lenders. The latest upstarts combine digital innovation and efficiency with true term loans akin to bank loans. Their rates are higher than those charged by banks but lower than those charged by short-term alternative lenders. Dealstruck uses a peer-to-peer model in which wealthy investors put up the capital for individual loans, lowering the lender's cost of capital by freeing them from raising money. The lender also offers lower rates by targeting midprime or near-prime borrowers... Read more
A crop of new lenders is jumping into the subprime personal-loan market, wooing consumers with flawed credit. Among these firms is FreedomPlus, a lender which targets people with credit scores between 600 and 700. It offers loans up to $35,000, to be repaid over two to five years at rates ranging from 7.49% to 36%. Randy Green, a U.S. Air Force paramedic benefitted from the service. He lacked a long credit record, making it difficult to get a personal loan. So he borrowed on credit cards, paying interest rates upward of 20%. FreedomPlus stepped in with more favorable terms, lending $4,000... Read more
President Obama's latest budget contains a few surprises for bankers. First, the budget predicts that the Federal Housing Administration, which announced in September it would need a $1.7 billion bailout, will have a positive year-end capital reserve of $7.8 billion and require no more transfers from Treasury. The proposal also includes new funds for housing, with $1 billion in spending to capitalize the National Housing Trust Fund. The affordable rental and housing program has been in turmoil due to the conservatorship of Fannie Mae and Freddie Mac. This $1 billion allocation would "... Read more
The newly released White House budget for FY 2015 contains $225 million in total CDFI Fund program funding, $1 million less than FY 2014's approved funding level. Of that total, $151 million has been set aside as CDFI financial assistance funding, up from $146 million in the final FY 2014 budget. Funding for the Bank Enterprise Award was absent from the budget. In FY 2013 and 2014, that award received $18 million in total funding. The White House has also proposed a $13 million increase in Healthy Foods Financing Initiative funding to $35 million. Funding for the CDFI Fund's Native... Read more
Urban Partnership Bank's plan to close a South Shore branch has left neighbors concerned about the developer's plans for the location. Neighbors said they were enthused when the developer initially proposed bringing Chipotle or Potbelly to the site, but felt let down when the developer revealed a proposal to bring in a drive-through-only McDonald’s instead. Urban Partnership plans to maintain some presence at the site with an ATM or banking kiosk. “We thought everyone would benefit if it was redeveloped and some much-needed retail was brought to that location,” said Brian... Read more
A new paper form the Mercatus Center at George Mason University finds that the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 has significantly affected small banks and their customers. In a survey distributed to 200 small banks, a large majority of respondents viewed Dodd-Frank as more burdensome than the Bank Secrecy Act. Participating banks reported compliance costs had substantially increased in the wake of new regulations as banks hired new compliance personnel or increased their reliance on outside experts. The survey also indicated the increased regulatory burdens... Read more
David Reiling, Sunrise Banks CEO and CDBA Director, won the Good Leader Award at Minnesota Business Magazine's Community Impact Awards. The awards are intended to recognize leaders and businesses that take tangible, life-changing actions that have a real impact on the people touched by their efforts. The magazine recognized Mr. Reiling as a social entrepreneur with 25 years of innovation experience in community development finance. They praised his advocacy on behalf of underserved consumers and Sunrise Banks' work with Hmong and Somali immigrant communities. Sunrise Banks... Read more
The Center for Financial Services Innovation provides a set of aspirational guidelines for small-dollar credit products. The report emphasizes responsible underwriting as a key component of a high-quality small-dollar credit product. It also focuses on the importance of proper loan structure and pricing to maintaining the borrower's ability to repay. It defines the ideal small-dollar credit product as one which is made with a high confidence in the borrower’s ability to repay, is structured to support repayment, aligns profitability for the provider with success for the borrower, gives the... Read more
Kansas City's KC Storefront Initiative aims to make loans to small businesses—particularly those run by women and minorities—that haven't been able to get banks to extend credit to them. Since the initiative's launch in mid-2012, more than 140 entrepreneurs have received a total of $1.2 million in financing. The loans are made by Justine Petersen, a St. Louis-based microlender that Kansas City officials recruited to run the program. But the city has played an active role in facilitating the loans. Kansas City has donated office space to Justine Petersen and contributed $110,000 to the... Read more
The Neighborhood Assistance Corporation of America, a Boston-based nonprofit lender, is making waves with its vocal advocacy in favor of reviving a more sustainable version of the subprime mortgage market. The organization's mission is to expand homeownership with mortgages to lower-income borrowers on terms that are both profitable and sustainable. It is half lender, half community organization. Applicants are subject to careful screening and, upon approval, are required to participate in the organization's advocacy efforts. The lender also replaces the typical mortgage insurance with a... Read more
A new study of FDIC statistics finds that the number of small banks and their share of US banking assets declined substantially since 2000 while the five largest US banks expanded. Small banks’ share of domestic deposits fell from 40 percent to 23 percent since early 2000 while their share of US banking assets declined from 36 to 19 percent. The five largest banks now hold 44 percent of US banking assets and 40 percent of domestic deposits—up from 23 percent and 19 percent, respectively, in early 2000. Some of the decline among small banks is organic, as market forces encourage... Read more
This week, February 24-March 1, is America Saves Week. Programming sponsored by the OCC, the Consumer Federation of America and the American Savings Education Council will encourage individuals and families to prepare for the future by saving. "I’m proud of the role that national banks and federal savings associations play in helping Americans build the savings they need to improve their lives" said OCC Comptroller Thomas Curry. Curry encouraged banks to continue their support for America Saves Week by partnering with local organizations to encourage savings through activities such as... Read more
Minnesota legislators plan to introduce a bill that will allow companies in the state to form B-corporations, entities that pursue social missions as well as generate profits. One early advocate is David Reiling, CEO of Sunrise Banks and a CDBA director. About 20 states currently allow the charters and Reiling wants to see Minnesota join that group. "Do well and do good," Reiling said of Sunrise Bank's philosophy. "We're living proof that those concepts are not mutually exclusive." Reiling points to the bank's joint venture with Lutheran Social Services, a program that... Read more
Newly released transcripts reveal Fed officials underestimated the severity of economic conditions during the financial crisis. Officials repeatedly fretted about overstimulating the economy, only to realize time and again that they needed to redouble efforts to contain the collapse. Ben Bernanke was clearsighted in warning of the risk of a severe recession, but struggled to persuade his colleagues. Janet Yellen, then president of the Federal Reserve Bank of San Francisco, was even more alarmed. She and Eric Rosengren, president of the Federal Reserve Bank of Boston, were the most forceful... Read more
Arkadelphia, Ark.-based Southern Bancorp Community Partners has announced a new product that encourages local low-income non-traditional students to invest in college education. Their College Completion Matched Savings Program matches $3 for every $1 saved by the program participant. Once they reach their savings goals and complete financial education classes, participants can use the savings to pay for tuition, books or other school fees. “If you’re willing to work hard to achieve your education goal, Southern Bancorp Community Partners is willing to help you reach it,”... Read more
The Federal Reserve Bank of San Francisco has compiled a series of articles and essays highlighting the stabilization strategies of nonprofits across the country. The essays emerged from experiences in the Neighborhood Stabilization Innovations Initiative, a project which supported emerging strategies for neighborhood stabilization after the foreclosure crisis. In this review, findings from that initiative are presented on topics including mitigating foreclosure, new models of housing counseling, public-sector entrepreneurialism and fair housing. "The 10 projects funded under the... Read more
CDBA member Virginia Community Capital is currently seeking a loan operations specialist to support their Finance/Operations Team. The Loan Operations Specialist will be responsible all for a variety of duties related to servicing the loan portfolio from the point of loan booking to the payoff and release of the loan. This position works closely with the lending team, recording data on new loans and renewals and is responsible for reconciling all loans related to general ledger accounts. The operations specialist is expected to manage loan file documentation and to conduct FLHB and HMDA... Read more