Community Development Banking News
CDFI Banking: Industry, Policy, and Beyond.
BankPlus is taking advantage of the University of Mississippi Medical Center’s new corporate telehealth program. The program aims to cut down unnecessary medical visits by allowing real-time, same-day virtual appointments. BankPlus has made the program available to all 725 employees at 60 of its locations. Just four weeks into operation, the program has already treated nearly 50 patients. “Historically, we have always embraced emerging technology, not only in our products and services, but internally as well," said Bill Ray, president and CEO of BankPlus. "Telehealth allows us the opportunity to bring these two passions together, while saving our employees time and money.”
In a new book, the Federal Reserve Bank of San Francisco and the Urban Institute explore data collection trends in the community development field. The book, What Counts, brings together essays on data collection and use from a wide range of authors, including community development practitioners, regulators and academics. Among the recurring themes in the essays are the promise of the massive troves of data now available to the public — and the challenges of harnessing it safely and usefully. Authors describe a trend toward standardization in the collection of community development impact data, balancing nuance with practicality. Authors also expressed optimism for the promise of data sharing via open data policies.
Southern Bancorp is calling foul on a recent move by the Citizens Bank of Batesville, which has hired 10 lenders and support staff away from Southern’s office in Hot Springs, Ark. Citizens CEO Phil Baldwin, who had been CEO at Southern from 2002 until 2011, denied a raid on his former employer and said the hires were instructed not to bring information with them. Nevertheless, Southern Bancorp has notified regulators of their concerns. “We believe that proprietary information may have been misappropriated,” said Southern Bancorp CEO Darrin Williams. Meanwhile, Southern Bancorp Bank is proceeding with plans to expand in Hot Springs and is rapidly moving to hire staff for it and replacements for the bankers who left.
Banks are urging some of their largest customers to take their cash elsewhere or be slapped with fees, citing new regulations that make it onerous for them to hold large deposits in accounts that were previously free. The new measure requires the banks to maintain enough high-quality assets that could be converted into cash during a crisis to cover a projected flight of deposits over 30 days. Because large, uninsured deposits would be expected to leave most quickly, the rule requires that banks maintain reserves that they cannot use for profitable activities like making loans. Some bankers said they are advising corporate clients to break up large deposits across several banks, including smaller ones not affected by all of the new rules.
International regulators are gearing up to make significant changes to capital requirements over the next few years, a shift that some are already referring to as Basel IV. The Financial Stability Board has detailed a slate of likely changes over the next three years, including raising the risk-based capital ratio, revising risk weightings and moving away from model-based assessments as part of a revamp of the capital requirements for operational, market and credit risk. The Basel Committee will likely raise the risk-based capital ratio to 10% from 8%. A key principle of the new guidelines is reducing reliance on internal or external models in favor of tougher capital standards. The overall result would be a shift away from risk-based capital rules and toward simple, hard-line capital ratios.
Chicago's Urban Partnership Bank is taking on the currency exchanges and payday lenders with new check-cashing and prepaid-card services for individuals who aren't bank customers. The services come at prices well below those of typical currency exchanges -- check cashing will be over 30 percent cheaper. The bank will charge 1.25 percent to cash Social Security checks, paychecks, tax refund payments and the like, compared to 2 percent at many currency exchanges. “We work to give people great value but make a nominal profit while doing so,” said Darryl Hendricks, the bank's director of consumer banking.
Washington-based City First Enterprises, the nonprofit holding company of City First Bank of D.C., is building an online crowdsourcing platform for investors who want to put their money to work in underserved communities. "At present, it is extremely difficult for [investors and CDFIs] to get together," said City First Enterprises president John Hamilton. "The design of this platform is to streamline and make this much easier. A CDFI can borrow money for itself or host projects as investor opportunities." Hamilton hopes the site will go live by July. The platform got a big boost last month when Promontory Financial Group picked it as a winner in its inaugural Empowerment Awards.
The U.S. Treasury Department has announced that Annie Donovan will become the new CDFI Fund director, filling the position vacated by Donna Gambrell at the end of last year. Donovan is an experienced CDFI practitioner who most recently served as CEO of CoopMetrics, a firm that provides business intelligence tools to small businesses and nonprofits. Previously, Donovan was a senior policy advisor at the White House, working to advance impact investing with the Office of Social Innovation and the Council on Environmental Quality. Donovan has also served as the chief operating officer of Capital Impact Partners, a certified CDFI focused on education, healthcare, long term care and affordable homeownership finance.
The First, A National Banking Association has opened a new full-service banking center in Baton Rouge, LA. The First now has banks in 32 locations in Mississippi, Louisiana and Alabama. “Expansion into the Baton Rouge market is a major part of our company’s strategic plan," said The First President & CEO Hoppy Cole. "We are excited about the combination of Market President Jarrett Nicholson and our team of experienced local bankers... We believe this is an excellent entry into the Baton Rouge market and look forward to expanding our business in the Baton Rouge area.”
Promontory Financial Group has announced the winners of its first annual Empowerment Awards, a new program that recognizes promising projects that provide or encourage access to safe, fair financial services in underserved communities. Among the winners and finalists are a number of CDBA members, recognized for the innovative work CDFI Banks and Bank Holding Companies do to bring financial services to the unbanked and underbanked.
The award winners are BankPlus of Ridgeland, Mississippi and City First Enterprises, the nonprofit CDFI bank holding company of City First Bank of D.C. Both BankPlus and City First Bank of D.C. are CDBA members.
Promontory also recognized CDBA members Beneficial State Bank, Carver Federal Savings Bank and Start Community Bank as finalists in the Community Development Banking category.
Award Winners
The Access Category
Online Investment Platform
City First Enterprises is a Washington, D.C.-based CDFI nonprofit bank holding company that promotes social justice through economic-access programs and its CDFI Bank, City First Bank of D.C. City First Enterprises is developing a new online investment platform designed to link mission investors to community enterprises. The program will take advantage of crowdfunding provisions of the JOBS Act to address a severe shortfall in the financing available to CDFIs — $650 million in the past 12 months alone. Using the platform, CDFIs and their customers can access community-oriented capital, while investors have a valuable signal that their investment is directed toward community needs. The platform also will create a secondary market in community-investment notes backed by CDFI-issued loans and make smaller offerings of notes feasible through lowered administrative and transaction costs.
The Community Development Banking Category
CreditPlus
CDBA member BankPlus is an independent community bank with 65 banking offices in 34 Mississippi communities. Their CreditPlus program offers small-dollar, short-term loans at a fixed rate of 5% for up to two years. Unlike most small dollar credit products, all CreditPlus loans come with a required financial literacy course based on the...