Community Development Banking News
CDFI Banking: Industry, Policy, and Beyond.
Chicago-based Urban Partnership Bank is seeking to sell 1,561 mainly residential loans in Chicago's South and West sides originated by its predecessor, ShoreBank. The loan package totals $154 million, with most of it dedicated to single-family homes. The average loan size is less than $99,000. According to market insiders, the size of the portfolio should spark investor interest despite the economic woes afflicting the neighborhoods Urban Partnership serves. “We are confident FFN will help source buyers with strong servicing capabilities," the bank said in a statement. "The asset sale will allow us to focus and direct capital into commercial lending on the South and West sides of Chicago and in Detroit.”
The FDIC is planning to make cybersecurity a higher priority during bank exams as early as the second quarter of next year. Under the new program, cybersecurity will become its own separate issue in examination comments. "The new program includes enhancements to specifically address cybersecurity elements," said Mark Moylan, deputy director at the FDIC's office of risk management supervision. Regulators want to ensure that there is an understanding of "cyber risk as it overlays into business decisions that you make at the board level," Moylan said. Moylan also warned that if an institution has a cyber-breach "it will not be a capital event; it will be an operational event" and compared to a liquidity problem.
Guaranty Bank and Trust Company and First Security Bank are teaming up with FHLB Dallas to support Panola Habitat for Humanity with a $24,000 Partnership Grant Program award. The funds will be used to hire additional fundraising staff and to help community members move into homes of their own. Without the funds, the Panola Habitat would have had to merge with an affiliate in another location. "Our operation is small at the moment, but we have big plans for the upcoming year," said Connie Hawkins, president of the Panola Habitat for Humanity and CFO, cashier and EVP of First Security Bank. "These administrative expenses are necessary to operate Habitat so we may continue to serve the Panola County community."
Columbus-Lowndes Habitat for Humanity has received a $12,000 Partnership Grant Program award from BankFirst Financial Services and FHLB Dallas. The award will fund upgrades a new building for Habitat which will house offices and a Habitat ReStore. The ReStore is a donation center where the community may donate used furniture, appliances and building materials, which are resold at discounted prices. Proceeds fund future Habitat projects. "Without the grant, they would have had to use their capital to make necessary updates to their new building," said BankFirst Financial Services Fair Lending and CRA Officer Ralph Carter. Mr. Carter serves on Habitat's Family Selection committee, which he said gives him a firsthand perspective of the need for affordable housing in the area.
Stephen Green, vice president and market manager at Albina Community Bank, has been named the 2015 Portland Business Journal Small Business Advocate of the Year. Green participates in an array of local organizations including the Black United Fund of Oregon, the Housing Development Center and the Portland Development Commission, where he concentrated on assisting small, early-stage companies and nonprofits. Green has a reputation as a tough business coach who pushes entrepreneurs to reach their potential. “Oftentimes, for the people I’m working with, it’s the first time someone has said yes to them,” says Green. “It’s the first time someone has said, ‘I’ll help you out.’ That’s what I’ve come to understand after working with thousands of entrepreneurs.”
RiverHills Bank and FHLB Dallas has extended a HAVEN grant to Steve Williams, an Iraq War veteran who served with the U.S. Navy. HAVEN is a unique grant program that targets income-qualified veterans and active duty service members who have been disabled in the line of duty since September 11, 2001. It provides grants up to $7,500 to support necessary home modifications. Mr. Williams injured his back during his Iraq deployment while placing concrete T-walls — large concrete slabs used as protection around the perimeter of buildings. "We're so excited to have been involved in helping Mr. Williams get his house repaired," said RiverHills Bank President and COO Joel Horton. "He's done so much for our country and we're just glad to be involved in helping in some small way."
Financial institutions face increased risk of cyber attacks that involve extortion, the FFIEC has warned. During an extortion attack, cyber criminals use a variety of tactics including ransomware, denial of service (DoS) and theft of sensitive information to extort payment or other concessions from victims. Often, an extortion attack encrypts the data on the target machine, making data inaccessible. The victim is then prompted to make a payment in order to release or unlock the files. In some cases, these attacks have caused significant impacts on businesses’ access to data and ability to provide services. Other businesses have incurred serious damage through the release of sensitive information. Financial institutions can learn how to protect themselves from cyber attacks here.
Beneficial State Bancorp's new office building, Framework, has received a $1.5 million award from the U.S. Tall Wood Building Prize Competition, sponsored by the USDA Softwood Lumber Board and the Binational Softwood Lumber Council. The building, anticipated to be one of the first tall timber structures in the United States, is designed to promote sustainable urban ecology by promoting social justice, sustainable building and economic opportunity. The designers hope the building will pave the way for more wooden high-rises, creating demand for Oregon’s local lumber harvest, milling and pre-fabrication industries. The building will include office space for Beneficial State Bank and Albina Community Bank, an Albina Community Bank branch and socially motivated retail businesses at street level.
Bank consolidation may have the strongest yearly showing in 2015 since the financial crisis. The banking industry agreed to 34 deals in October collectively valued at $8.2 billion, marking the best single month for M&A this year. Those deals boasted an average premium of 152% of tangible book value. While M&A has largely been dominated by small banks in recent years, some large institutions may begin looking into M&A. Since January 2014, banks have agreed to 11 deals valued at more than $500 million. The heightened activity comes as many bankers revisit the notion of building scale, particularly at institutions that are around $50 billion in assets. That threshold triggers more regulatory scrutiny, which would add more challenges to an existing low interest rate environment.
By inserting individual arbitration clauses into a soaring number of consumer and employment contracts, corporations are increasingly circumventing the courts and barring people from joining together in class-action lawsuits. Over the last few years, it has become increasingly difficult to apply for a credit card, use a cellphone, get cable or Internet service, or access an array of services without agreeing to private arbitration. More than a decade in the making, the move to block class actions was engineered by a coalition of credit card companies and retailers who said that class actions were not needed because arbitration enabled individuals to resolve their grievances. But court and arbitration records show that once blocked from going to court as a group, most people dropped their claims entirely.