Community Development Banking News
CDFI Banking: Industry, Policy, and Beyond.
Andy Anderson has been named President and CEO of Bank of Anguilla. He succeeds Fred Miller, Jr., who was elected chairman of the bank’s board of directors. Anderson has been with the Bank of Anguilla since 1983. He previously held the title of chief financial officer and compliance officer and is a director of the bank. Anderson holds BBA and MBA degrees from the University of Mississippi and graduated from LSU Graduate School of Banking of the South in 1988.
New York City-based Spring Bank, in partnership with healthcare nonprofit BOOM!Health, has launched the Employee Opportunity Loan to help workers bridge the gap between their income and cost of living. Spring Bank designed the Employee Opportunity Loan to provide access to affordable small dollar loans through partnerships with local employers. The product allows employees to access small credit securely and conveniently as part of their voluntary benefit package. Loan amounts range from $1,000-$2,500 and have no minimum credit score requirement. "The product demonstrates that responsible lenders in New York City can offer alternatives to the predatory products available in person or online,” said Spring Bank President Eric Pallas.
Teri Williams, president of Boston-based OneUnited Bank, is optimistic about the future of black banking despite the struggles black banks have faced since the financial crisis. The recession was particularly difficult for black banks who served a larger percentage of moderate-to-low-income customers. But the economy is on the upswing, and OneUnited is poised to take advantage of the economic situation with a forward-looking tech strategy and new community outreach initiatives, including partnerships with local youth art programs. “It’s important for anyone to bank with institutions they trust and they feel is there to help them build wealth and financial stability,” said Williams. “Black banks have a history of servicing the communities we’re in and being a trusted source.”
The FDIC, OCC and Federal Reserve are hosting the Interagency Minority Depository Institution and CDFI Bank Conference to help preserve and promote the missions of minority depository institutions and CDFI banks. The conference focuses on the unique positioning of these institutions to make positive change in their communities. Senior officials including FDIC Chairman Martin Gruenberg, Federal Reserve Board Governor Jerome Powell and Comptroller of the Currency Thomas Curry will be featured speakers. The conference will take place at the OCC Conference Center in Washington, D.C. July 13-15. Registration is open to board members and staff of minority depository institutions and CDFI banks.
M&F Bancorp of North Carolina, one of the nation’s oldest black-owned banks, is launching an effort to revamp its business model to counter the challenges MDIs are facing. With about 60% of its customers over 60 years old, M&F is rebranding and working to reach new customers in order to serve a wider community base. "I just don't think we're going to have more African-American banks open," Sills said. "I think it is incumbent on the ones that are remaining to make sure they're relevant and they're trying to reach out to as many groups or market segments in their various communities to make sure their bank is around for the next 15 or 20 years. I just don't think you can rely totally on one segment of the community."
Amidst growing pressure towards more robust risk-management procedures, many community banks are facing difficult decisions when it comes to choosing when to use outsourced labor and when to increase their own staff to handle risk-management tasks. Outsourcing risk-management tasks such as cybersecurity can be tempting for small banks because of the expenses associated with hiring experts. But outsourcing can also carry risks related to managing the vendor relationship and monitoring the quality of work. Regulators have also been paying close attention to banks' oversight of vendor relationships. Federal Reserve Board Gov. Daniel Tarullo cautioned in a recent speech that outsourcing to vendors can increase risk by removing functions from the bank’s control.
Secretary of Education Arne Duncan announced on Monday that the Education Department would forgive the loans of tens of thousands of students who attended Corinthian Colleges. The for-profit college company closed and filed for bankruptcy last month amid charges of fraud. The company has been accused of falsifying placement rates, publicizing deceptive marketing and engaging in predatory recruiting by targeting the most vulnerable low-income students. For-profit colleges get the majority of their revenue from federal student loans -- and account for nearly half of the defaults on these loans. If all 350,000 Corinthian students over the last five years applied for and received the debt relief, the cost could be as high as $3.5 billion.
The American Bankers Association has issued a call for entries for its Community Commitment Awards, which recognize and promote the ways banks of all sizes contribute to economic growth, community development and enhancing customers' quality of life. Winners will be announced during ABA’s Annual Convention, held Nov. 8-10 in Los Angeles. Winners will receive a complimentary registration to the convention and will be presented with an award at the ceremony. Awards will be made in seven categories covering a range of community development activities including affordable housing, financial education and more. Banks can submit entries in multiple categories. All applications must be submitted by July 1, 2015.
The Consumer Financial Protection Bureau is leaning against subjecting banks to new rules that would cap the size and frequency of overdraft charges, according to sources briefed on the agency’s work. Instead, the CFPB is likely to limit its action to barring lenders from reordering transactions, a practice in which the order of transactions is manipulated to maximize the number of overdrafts applied to an account. The CFPB may also require better disclosure of overdraft policies to consumers to help them avoid these fees. The CFPB hopes to balance its new consumer protection measures with the concerns of banks who assert that some consumers rely on the flexibility overdrawing their accounts provides.
BankFirst Capital Corporation will merge with Newton County Bancorporation, Inc. under a plan approved by the boards of both companies. BankFirst will acquire all six of Newton County Bank's branches, giving it total assets in excess of $875 million. It will now run 18 branches across 10 Mississippi counties, making it the 11th largest Mississippi-based banking institution. "This transaction attractively expands our footprint in central Mississippi and provides additional operating scale across our bank," said Moak Griffin, BankFirst's President and CEO. "We are excited about continuing to offer high-touch, community banking service to Newton County Bank's customers while introducing a broader product offering to better meet their banking needs."