News
Ross Alan Hill, founder and CEO of Oklahoma City based Bank2, tells a story of hope and redemption in his new book Broken Pieces: Nothing is Wasted. Hill explains that he takes inspiration from Redento Raffinato, a style of blown-glass art in which broken glass fragments are reused to create elegant vases. Hill says that he sees his vase as a spiritual symbol, a physical reminder of redemption in his own life — and of the redemption that is part of Bank2's mission. “We respect our employees, customers, our friends and our community,” Hill said. “We know that brokenness is part of life, and when people are going through broken times, we try to be a friend.”
The House Financial Services Committee has renewed its look at regulatory relief for small financial institutions, pressing bankers and credit union representatives for details about their compliance burdens. “We are losing more than one [community bank] a day and they are not perishing of natural causes,” said Rep. Jeb Hensarling (R-Texas), chairman of the committee. “The sheer weight, volume, cost, complexity and uncertainty of federal regulation is a burden that is killing them off,” he warned. Although Democrats have said they are wary of any relief that undermines Dodd-Frank and have cautioned against placing too much blame on the measure, some support the need for targeted reform.
The CDFI Fund is soliciting comments on its evaluation of the Bank Enterprise Award (BEA) Program. The BEA helps banks provide credit and financial services in areas with high poverty. The BEA Program Evaluation assesses the effectiveness of the BEA Program as a mechanism for providing performance-based awards, the influence of the BEA Program on bank behavior and the impact of BEA Program-eligible investments in CDFIs and in distressed communities. The deadline for comment submission is May 18, 2015.
Mission Valley Bancorp plans to close an underused branch in Valencia, California at the end of the month with the intention of replacing it with a new, streamlined “branch of the future” nearby. Chief Executive Tamara Gurney said the decision to close the branch reflects changing technology in the banking industry. “A branch of 4,000-square-feet is probably twice the size of what the branch of the future will look like. Some of them are down to kiosks of 1,000-square-feet now, because we don’t need big vaults and people don’t use safe deposit boxes like they used to,” she said. “The bank is doing extremely well. In 2014 we grew our net loans by over $20 million,” Gurney said. Last week, the bank also approved its first-ever dividend payment to stockholders.
A new startup called Bankjoy wants to make it easier to provide modern mobile banking by rolling out a customizable banking app aimed at small banks and credit unions. Bankjoy founder Michael Duncan hopes to differentiate his product from offerings of other mobile banking vendors with a sleek, intuitive user interface and innovative features. The app will include many hallmarks of big banks' mobile offerings -- including the ability to log in using a PIN on your smartphone, make remote deposits using a smartphone camera, manage debit cards, set financial savings goals, make person-to-person payments and pay bills from your phone. The appearance of the app will be brand-conscious with customizable bank logos and color schemes.
A campaign of concentrated financing by Southern Bancorp is showing positive outcomes in Helena-West Helena, Ark. Southern Bancorp has loaned about $14 million to fund renovations and new construction on 17 properties in downtown Helena-West Helena over the past 10 years — about $2 million of that in the past two years alone. The city’s development strategy has included financing new business and schools as well as tourist sites that celebrate the city’s rich civil war and blues heritage. “It’s hard to keep up with all the stuff that’s going on,” said Dominik Mjartan, executive vice president of Southern Bancorp. For Mjartan, Helena-West Helena’s development is part of the bank’s mission of economic equality: “Should your ZIP code really determine whether you have a chance at a decent life?”
The New York City Department of Consumer Affairs is partnering with financial institutions including Carver Federal Savings Bank to offer an affordable bank account for unbanked New Yorkers. The New York City SafeStart Account has no upfront fees, no overdraft fees and accepts a minimum balance of $25. The accounts are major improvement over check cashing services, which collect an estimated $225 million from New Yorkers each year. Individuals can open a SafeStart account at participating bank and credit union branches throughout the city or schedule a free one-on-one financial counseling session at one of the city’s financial empowerment centers to learn about opening an account.
A new study by the Carsey School of Public Policy at the University of New Hampshire finds that CDFI lending accomplishes its mission of filling market gaps for key underserved low-income populations. The authors found that CDFIs deliver between two-thirds and ninety percent of all loan volume to borrowers living in CDFI Fund-designated investment areas. The report said that CDFIs provide borrowers that may not qualify for loans from mainstream sources with loan terms and interest rates that are comparable to mainstream products, but tend to entail less risk to borrowers. Among the study’s recommendations are standardization of impact metrics, greater reporting to the CDFI Fund’s Community Investment Impact System, and new financial supports for innovative financial practices.
The Philadelphia-based Center for Health and Literacy will share $26 million in New Market Tax Credit funding through City First Bank of D.C. The center is a cooperative project between Children’s Hospital of Philadelphia and the city of Philadelphia that will offer medical care, recreation and literacy programs in one central location for children and adults. The New Markets Tax Credit Program will also enable City First Bank to finance the renovation and expansion of a Washington, D.C. charter school campus and a medical research facility in Baltimore. “Through these programs, we have been able to finance socially impactful projects that have created jobs and provided critical community services,” said Brian Argrett, president and CEO of City First Bank.
Rep. Randy Neugebauer (R-Texas) has announced plans to introduce legislation that would replace the CFPB’s director position with a bipartisan, five-member commission appointed by the president. Republicans argue that the agency has stifled economic growth with too many regulations and lacks accountability. But Democrats have raised concerns that a commission would politicize the agency and reduce its power. House Financial Services Committee Chairman Jeb Hensarling (R-Texas) offered support for the proposal, which failed to gain traction when Democrats controlled the upper chamber in the last Congress. "The bureau regrettably remains unaccountable to the American people," Hensarling said. "That is why we need the CFPB on budget and led by a bipartisan commission."