Community Development Banking News
CDFI Banking: Industry, Policy, and Beyond.
Beneficial State Bank's 2014 Annual Beneficial Banking Report caps a year of major change for the bank. In July, Beneficial launched a major rebranding which included dropping its former name, One PacificCoast Bank. Beneficial State Bank lent $347 million in 2014, 81 percent of which went to mission-oriented causes. In 2014, Beneficial provided $156,900 in sponsorships to community organizations – ten percent of its total profits. Also in 2014, Beneficial launched the Personal Builder Loan, a consumer loan targeted at the underserved offered in partnership with LendUp Technologies. Beneficial has taken major steps to cut carbon emissions, cutting its greenhouse gas emissions 27% per FTE since 2011 and purchasing carbon offsets to become carbon-neutral.
The Federal Housing Administration's new Small Buildings Risk Sharing (SBRS) Initiative could provide a boost to lending for affordable multifamily housing. The program enables lenders to partner with FHA to provide long-term fixed-rate lending products to multifamily property owners with mortgages under $3 million (or $5 million in high-cost areas). The program is intended encourage lending to small buildings by allowing approved lenders to underwrite and service loans in return for FHA assuming 50 percent of the risk. Nearly 60 percent of small rental property owners are individuals, households and estates who face significant constraints accessing financing due to more stringent credit standards than larger property owners and the loss of many local banks after the 2008 recession.
A growing number of CDFI banks, including Virginia Community Capital, Sunrise Banks and Beneficial State Bank, are becoming certified B Corps -- corporations that use business to achieve social impact. For these banks, the B Corp label is an affirmation of their positive work bringing capital to underserved communities. For customers, it acts as a signal that the banks maintain high ethical standards to social and environmental goals. “Being a part of the B Corp community gives us the opportunity to stay focused on our mission to provide innovative capital promoting vibrant local communities and enriching people’s lives throughout Virginia,” said Jane Henderson, President and CEO of Virginia Community Capital.
A new mural painted on OneUnited Bank’s Miami branch was unveiled earlier this month. “Thunder & Enlightening” is the work of local artist Addonis Parker who said it depicts racism and the harsh realities of urban life. Among the images depicted are a church with nine doves symbolizing the Charleston church murders as well as portraits of Trayvon Martin and Michael Brown. Twenty-one students from Miami’s inner city worked with Parker as apprentices on the project. “The OneUnited Mural Project and the unveiling of the mural... helps us bridge the divide between the banking industry and urban communities by recognizing their struggles and hopes for the future,” said OneUnited President & COO Teri Williams. More images of the unveiling are available here.
Minority-owned banks are crying foul after being shut out of this year's round of the New Markets Tax Credit (NMTC) program. The NMTC program provides a tax credit to investors who invest in low income communities by funneling their investments through NMTC allocatees. None of the 76 NMTC allocations made this year were awarded to a minority bank. A 2009 study by the Government Accountability Office found that only about 9 percent of minority entities were successful when applying for NMTC allocations, compared to 27 percent of non-minority applicants. "We need our CDFI Fund to do more; we need a real change that will allow us to receive allocations so we can use these resources to improve our communities," said Preston Pinkett, CEO of City National Bank and chairman of the National Bankers Association.
An internal U.S. Justice Department watchdog has cleared the agency of using the Operation Choke Point probe to unfairly target Internet payday lenders. The probe was launched at the request of Republican lawmakers, who feared operation choke point was being used to stifle controversial but lawful businesses including gun dealers, tobacco sellers and pornography vendors. In a letter to Representative Blaine Luetkemeyer, the Justice Department's Office of Professional Responsibility found no evidence that any attorneys engaged in professional misconduct or improperly targeted Internet payday lenders or other lawful businesses. The report found no evidence of improper enforcement, writing that the probe targeted only a small number of lenders engaged in fraudulent activity.
A report by the Pew Charitable Trusts finds that reloadable prepaid cards are rising in popularity among consumers, particularly the unbanked. Unbanked consumers increasingly treat their cards as checking accounts, using them to receive direct deposits and pay bills. Prepaid card usage increased 50 percent between 2012 and 2014 and 23 million adults in America now use prepaid cards regularly. Much of this growth occurred among consumers with bank accounts who purchased a card at their bank or credit union. Among the risks of the new trend: the report found that many consumers did not fully understand their cards' liability limitations for unauthorized transactions or the binding arbitration clauses mandated by most prepaid cards.
Registration is open for the CDFI Fund's Expanding CDFI Coverage in Underserved Areas Capacity Building Initiative workshops. This series of two-day workshops provides specialized training and technical assistance to certified and emerging CDFIs seeking to expand their reach into underserved communities. Opportunity Finance Network (OFN) will partner with subject matter experts including CDBA to provide three workshops relevant to all types of CDFIs. The final session, Expansion by Existing CDFIs, will be held August 19-20, 2015, Kansas City, Mo. and is nearing full capacity.
Thanks to the Special Needs Assistance Program (SNAP program) offered at Ridgeland, Mississippi-based BankPlus, retired chef Allen Crawford will finally have working hot water and a remodeled kitchen in his home. Crawford had been living without hot water for years after his water heater and stove broke. His kitchen floor was caved-in and there were holes in his walls. After applying for the SNAP Program, which provides grants to assist income-qualified, special-needs homeowners with home repairs, Crawford received $5,806 for repairs from BankPlus and FHLB Dallas. "Over the years, we have worked together to help literally hundreds of families with needed home repairs and modifications," said Mark Ouellette, first vice president and director of Affordable Housing at BankPlus.
Amid a spate of high profile cyberattacks, the FFEIC has released a new cybersecurity assessment tool to help financial institutions identify risks and evaluate their cybersecurity preparedness. The assessment provides a repeatable and measurable process for institutions to track cybersecurity preparedness over time, including determining the institution’s overall cyber risk, assessing the institution’s cybersecurity preparedness, evaluating whether the institution’s cybersecurity preparedness is aligned with its risks and determining needed risk management practices. The assessment is designed to apply to financial institutions of all sizes.