News
A new CFPB plan unveiled last week would eliminate arbitration clauses in financial product agreements that prevent consumers from filing class action lawsuits. The proposal would require arbitration clauses to explicitly say that they do not apply in class action cases. Meanwhile, firms still using such clauses for individuals would have to provide the CFPB with information about those claims and the amount of resulting awards given to consumers. CFPB Director Richard Cordray said the arbitration clauses — which, consumers are rarely aware of beforehand — amount to a "free pass" to avoid class actions. The new restrictions would apply to a host of consumer financial products including credit cards, automobile leases and debt collection.
Grant Bancshares Inc., the bank holding company for Louisiana-based Bank of Montgomery, will acquire the $64 million Bank of Ringgold. Bank of Montgomery, which currently operates from six locations, will expand its footprint to include the Bank of Ringgold's three locations. Following the merger, Bank of Montgomery will have approximately $280 million in total assets and $250 million in deposits. “We have a strong commitment to our local communities, and we take pride in knowing all of our customers by name. That will never change,” says Bank of Montgomery President and CEO Ken Hale. “We welcome the Bank of Ringgold’s customers to our community banking platform with exceptional products and services.”
The CFPB has named Sunrise Banks CEO David Reiling vice chair of its Community Bank Advisory Council (CBAC). CBAC was created to ensure the perspectives of community depository institutions with less than $10 billion in assets are shared with the CFBP. Reiling hopes to further the council's mission of representing the needs of community bankers. “The experience of this past year on the Community Bank Advisory Council has been more than rewarding,” said Reiling. “I am honored to be asked to serve as the CBAC Vice Chair and look forward to engaging with the Bureau to communicate the impact of regulations on community banks as well as the customers and communities they serve.”
Allies arrayed against the Minnesota payday lending industry are gaining traction thanks to a $2.2 million Next Opportunity Award for Sunrise Banks of St. Paul. The bank's small-dollar loan program, TrueConnect, already covers 10,000 employees through participating employers. Sunrise CEO Dave Reiling said the fresh capital will allow the bank's TrueConnect program “to scale nationally and offer a safe-loan alternative for 26 million Americans who do not have a credit score.” Through TrueConnect, offered as an employee benefit, a worker can get a loan of up to $3,000. The loan is retired through payroll deductions for up to 12 months. Sunrise, which makes 60 percent of its credit available in low-income communities, has signed up over 20 employers and is expanding TrueConnect to California, Ohio and other states.
BankPlus Hernando branch president Dink Upchurch is banking on a sound economic recovery and the Greenwood native said all indications are that the nation is healing from the Great Recession. His branch, located on the historic DeSoto County Courthouse square, gives him an up-close view of how that recovery is hitting main street. "The thing about being on the square is that everybody knows everybody,” Upchurch said. “I’ve been in some areas that I will call places, but this is a community… The economy seems to be coming back… We made $17 million in loans this past year at this branch and the bank as a whole in DeSoto County, including its seven branches, made $91 million in loans, according to the latest figures."
Jane Henderson, president of Virginia Community Capital, is working to turn the tide against the decline of manufacturing that has hit hard the economies of many parts of Virginia. Henderson says one of the biggest obstacles she faces is educating community leaders — many of whom have big factories sitting empty. Many of them keep hoping for another big factory to move in. A more practical approach, Henderson advises, is to focus on creating small, homegrown employers — lots and lots of small employers. “If you create 10 jobs in St. Paul, you have to be able to say that’s success,” she says. That may seem a disappointing number, “but if you do that 10 times, you have 100 jobs, and these are businesses that will stay there and not move.”
The Federal Reserve Bank of Philadelphia has lifted the Order to Cease and Desist placed on Carver Bancorp, Inc. by the Office of Thrift Supervision in 2011. The order, which required Carver to boost its Tier 1 capital and total risk-based capital ratios, came in the aftermath of the housing downturn and the recession. "The Federal Reserve Bank's action is the latest milestone in our extensive effort to restore the financial strength of our institution," said Michael Pugh, Carver Bancorp president and CEO. "We are pleased to put this chapter in our organization's history behind us, and we are extremely thankful for the ongoing commitment of our stockholders, customers and community partners."
The CDFI Fund recently announced $10.6 million in Bank Enterprise Award (BEA) prizes and $13.7 million in CDFI Program awards to CDBA members. But how are CDBA member banks using those funds to make a difference in their communities? Here are just a few examples.
Virginia Community Capital (CORE - $1.6M, HFFI - $1M)
Virginia Community Capital (VCC) is using their HFFI award to achieve the goals of Virginia Governor Terry McAuliffe’s Commonwealth Council on Bridging the Nutritional Divide. The council works to help solve childhood hunger in the state, promote Virginia’s agricultural economy and support local nutrition programs. VCC's HFFI funding will expand residents’ access to healthy foods by financing grocery stores in Virginia’s food deserts. It will also support the mission of VCC's Virginia Fresh Food Loan Fund (VFFLF), a $10 million loan fund for healthy food enterprises. VFFLF has helped several businesses expand food access across Virginia with small business consulting and lending.
Beneficial State Bank (CORE - $2M, BEA - $265,496) and Albina Community Bank (BEA - $239,117)
Beneficial State Bank's Financial Assistance grant will support its lending to underserved small businesses and consumer borrowers. "These CDFI funds permit Beneficial State to increase further its already strong commitment to social justice as embedded in its triple bottom line," said Co-CEO of Beneficial State Bank, Kat Taylor. The BEAs will help the two banks support increased lending in their underserved target markets. Cheryl Cebula, President and CEO of Albina Community Bank, celebrated the award. “As a bank that was founded to support our local neighborhoods, we continue to do everything we can to help inspire job creation and extend financial opportunity in the neighborhoods that need it the most.”
United Bank (BEA - $265,496)
United Bank's BEA will help the bank create products and services that positively impact consumers and small businesses in low and moderate income areas. United Bank’s current services include the Credit Advantage Small Dollar Loan program, its secured Visa credit card and its $12 million loan fund for small business financing. “We are honored that the Treasury Department would recognize our ongoing commitment to make a positive impact on our local communities, families and small business,” said United Bank President and CEO Robert Jones. “Today’s award affirms the importance of hometown banking and of our efforts to ‘do well by doing good.’”
Southern Bancorp (BEA - $265,496)
"This award will be used to further Southern’s mission of creating economic...
The CDFI Fund has announced that nine additional bond loans, totaling $327 million, were guaranteed in FY 2015, bringing the total guaranteed through the CDFI Bond Guarantee Program to $852 million. All of the bond proceeds will provide long-term, fixed rate capital for projects in low-income and underserved communities. Three bonds were issued on behalf of 9 eligible CDFIs. “I am very pleased to recognize the CDFIs that are creating new partnerships and innovative ways to fully utilize the CDFI Bond Guarantee Program,” said CDFI Fund Director Annie Donovan. “The program is reaching diverse organizations and communities across the country, allowing us to greatly expand access to financing for low-income areas nationwide.”
Teri Williams, President of OneUnited Bank, discusses the OneUnited Mural Project in a feature for NBC News. "The OneUnited Mural Project and the landmark mural, Thunder & Enlightening, by internationally acclaimed muralist Addonis Parker, helped bridge the divide between the banking industry and urban communities by recognizing their struggles and aspirations," Williams writes. "The OneUnited Mural Project actually became a 12-week apprenticeship-based program - with 21 teen apprentices from 9 public schools... [The mural] has been well received by the community. In fact, many don't see controversy, they see truth... And we see an opportunity to welcome many who have never been in a bank before."