News
The CFPB is now accepting applications for membership on its Consumer Advisory Board and two other advisory groups, the Community Bank Advisory Council and the Credit Union Advisory Council. The purpose of these groups is to inform the CFPB of the needs of small financial institutions and to provide the bureau with information about emerging trends and practices in the consumer financial products and services industries. CDFI bank leaders and other experts in the fields of consumer protection, community development, consumer finance, fair lending and civil rights are encouraged to apply. The deadline for applications to the council is Feb. 29 at 12:00 AM.
Beneficial State Bank and Pan American Bank have announced an acquisition agreement under which Beneficial State will acquire all outstanding shares of Pan American Bank. The transaction, which is subject to regulatory approval and approval by shareholders of Pan American and Beneficial State, is expected to close mid-2016. The combined entity will operate as Beneficial State Bank. Pan American’s current Chief Executive Officer Robert Hughes will serve as President of the consumer lending unit. The combined entity will have assets of $580 million and deposits of $465 million, comprising 12-branches across California, Oregon and Washington. “Today, our customers are one big step closer to changing the banking system for good,” said Beneficial State Co-Founders Kat Taylor and Tom Steyer.
Students at two elementary schools in Hanover Park, Ill. have received free financial literacy education through the First Eagle Bank Financial Scholars Program. First Eagle Bank provides the online financial literacy program at no cost to the schools. In the 2015 fall semester alone, the program reached more than 40 students. First Eagle Bank has partnered with leading education technology company EverFi, Inc., to bring the interactive, web-based financial management program to over 750 students since the program’s inception in 2013. “First Eagle Bank is very proud of the number of students we have reached with critical financial education, as it is just one of the many indicators of our commitment to the Hanover Park community,” said First Eagle Bank senior vice president Christine Freund.
At a time when many Native Americans struggle to secure mortgages from mainstream institutions, Oklahoma City-based Bank2 is fighting for greater financial inclusion. According to 2014 Home Mortgage Disclosure Act data, Bank2 made $38 million in home loans to Native Americans in 2014. That ranks it among the top 20 in mortgages to Native Americans in the country. Bank2 has the highest volume of mortgages to Native Americans of any Native-owned financial institution by a significant margin. More than half of its total mortgages (220 out of 426) were to Native Americans. Native communities face significant problems accessing the mortgage market. For instance, while Anchorage, AK has the highest proportion of Native Americans of any U.S. city at 12.4 percent, only 4.8 percent of mortgages went to Native Americans.
The CDFI Fund has opened the FY 2016 application period for the CDFI Bond Guarantee Program. Up to $750 million in bond guarantee authority will be made available to eligible CDFIs in FY 2016. Through the CDFI Bond Guarantee Program, selected CDFIs or their designees issue bonds that are guaranteed by the Federal government and use the bond proceeds to extend capital for community development financing and investments. Authorized uses of the loans financed through bond proceeds include a variety of financial activities targeted at revitalizing low income communities. The deadline for Qualified Issuer Applications is March 4, 2016. The deadline for Guarantee Applications is March 18, 2016.
Millennials have become heavy users of alternative financial services, primarily payday lenders and pawn shops. A joint study from PwC and George Washington University found that 28 percent of college-educated millennials (ages 23-35) have tapped short-term financing from pawn shops and payday lenders in the last five years. Many of these borrowers resort to alternative lenders even though they have other options to access cash; 35 percent are credit card users and 39 percent have bank accounts. The study paints a bleak picture of millenials' financial situation -- more than half (53 percent) carried a credit card balance in the last 12 months, while nearly 30 percent are overdrawing their checking accounts. Half of the millennials could not come up with $2,000 if an unexpected need arose in the next month.
The 2016 National Interagency Community Reinvestment Conference hosted by the federal banking regulatory agencies, the Federal Reserve Bank of San Francisco and the CDFI Fund will be held in Los Angeles from February 8 to 10. This biennial conference will feature discussions regarding innovations in community development policies and practice, CRA examination training and community development tours of Los Angeles. The conference agenda includes keynote presentations by Comptroller of the Currency Thomas J. Curry, FDIC Chairman Martin J. Gruenberg, Acting Assistant Secretary for Financial Institutions of the U.S. Department of Treasury Amias Gerety, President of the San Francisco Fed John C. Williams, and CDFI Fund Director Annie Donovan. Register for the event here.
CDFI banks--including Southern Bancorp, Spring Bank and Sunrise Banks--are innovating with new payroll lending programs. These small-dollar loan programs provide credit as a workplace benefit akin to health insurance. The programs serve as low-cost alternatives to payday loans, but they could also give small banks a chance to compete in the market for online consumer loans. Spring Bank began offering the loans last summer at two nonprofits in the Bronx. "It's good for the employer, it's good for the employee, and it's good for us because we anticipate it will reduce delinquencies because everyone is paying through payroll," said Melanie Stern, Spring Bank's director of consumer lending.
The Chronicle of Philanthropy included Dominik Mjartan, CEO of Southern Bancorp Community Partners and a member of CDBA’s Board of Directors in its inaugural 40 Under 40 List. The list includes young philanthropic leaders, economic developers, social advocates and visionaries who are crafting innovative new approaches to entrenched problems. Mjartan stressed the importance of an evidence-based approach to supporting development in the Mississippi Delta. "We’ve seen a lot of community-level progress," says Mr. Mjartan. "But then the question came, ‘Are we making sure that the right folks, those who really, truly lack economic opportunities, are also benefiting, that we’re not leaving them out?’ "
Bank of Montgomery has been rebranded BOM, reflecting the bank’s recent expansion beyond its original community of Montgomery, Louisiana. The bank now has grown to include nine branches in five parishes. A major component of the expansion was the acquisition of Bank of Ringgold by BOM’s parent company, Grant Bancshares Inc. That transaction expanded the bank's footprint with three additional locations in Bienville and Bossier, La. “The BOM name shows how the bank has entered a new chapter in terms of service area and financial strength,” said BOM President and CEO Ken Hale. “What won’t change is the hometown service we’ve provided for more than a century. We’ll always have a strong commitment to the communities we serve.”