Community Development Banking News
CDFI Banking: Industry, Policy, and Beyond.
New York City's Carver Federal Savings Bank announced two appointments designed to strengthen the Bank's lending and community development team. Blondel A. Pinnock, formerly the president of Carver Community Development, was promoted to Chief Lending Officer, Senior Vice President. In her new role, Pinnock will be responsible for the leadership and day-to-day management of the bank's loan production department. Takisia Whites was appointed President of Carver Community Development and will also continue in her current role as Non-Profit Team Leader in the Bank's Lending Department. Whites will be responsible for the Bank's New Markets Tax Credit program and will oversee community engagement.
The Winthrop Rockefeller Foundation highlighted the work of Southern Bancorp, Inc. CEO Darrin Williams as part of their Forty Years Forty Leaders For Arkansas series. The videos highlight impact-oriented leaders in Arkansas who increase prosperity, encourage educational attainment, strengthen communities and build the state's nonprofit infrastructure. "So many of the communities that we serve have been abandoned by traditional financial institutions as big banks consolidate and leave small towns and as small banks are burdened by regulatory pressures... Southern wants to fill that void," Williams said. "We want to be the bank for all of America. We want to be the bank in the Delta that will provide responsible and responsive capital to our communities."
A cap on the amount payday lenders can charge their customers has been announced by the United Kingdom's financial regulator, the Financial Conduct Authority (FCA). Payday loan rates will be capped at 0.8% per day of the amount borrowed. In total, no one will have to pay back more than twice what they borrowed, and there will be a £15 ($24) cap on default charges. The new cap means borrowers who fail to pay back on time can be charged a maximum of £15, plus a maximum of 0.8% a day in interest and fees. “For people who struggle to repay, we believe the new rules will put an end to spiraling payday debts," said FCA chief executive Martin Wheatley.
Employees and customers of Industrial Bank celebrated the Washington-based lender's 80th anniversary Monday night. To commemorate the anniversary, Industrial is offering five grants totaling $80,000 for new small businesses angling for long-term success. The effort is being supported by the U.S. Black Chambers Inc., FSC First of Prince Georges County, Operation HOPE and the D.C. Chamber of Commerce. "The mission is still the same," said Industrial Bank President and CEO Doyle Mitchell. "There are still a lot of people who are underserved for a variety of reasons, whether it's income, race or small business owners."
The Treasury Department and financial crime-fighting agency Financial Crimes Enforcement Network sought to assuage critics who say their blunt enforcement actions against money laundering have caused banks to cut ties with entire business sectors, such as check cashers. The regulators said banks should evaluate the risks associated with opening their doors to money service businesses on a case-by-case basis. Critics say the money-laundering enforcement, along with the so-called "Operation Chokepoint" fraud crackdown, have fueled the "de-risking" trend. Treasury has promised a deeper level of engagement with the banking industry on the enforcement actions, including a Jan. 13 public forum on money services businesses and banking access.
Mark Ricca, President and CEO of First American International Bank, has announced the appointment of new CFO Neil Hecht. "[Neil] brings over 30 years of banking experience to First American International Bank, with proven skills in strategic business planning, financial management and investments. Prior to joining First American International, Neil worked at First National Bank of Santa Fe as CFO, Treasurer and Chief Investment Officer where he led all aspects of the bank’s financial management and investments... Previously, Neil worked with CIT, Inc. as CFO of its Energy Group, and at SMBC Leasing and Finance, Inc. as Chief Investment Officer and Treasurer. We are very pleased and excited to have Neil as part of our team."
Urban Partnership Bank, launched in 2010 to take over the assets of ShoreBank after its failure, suffered a $28 million loss through the first nine months of 2014. The primary reason: a $24 million writedown this year on the value of the bank's 10-year agreement with the FDIC to share losses on bad ShoreBank loans. Despite the losses, the bank has maintained sensitivity to its community as it works through ShoreBank's bad loans. That has meant restructuring loans that in other circumstances might have been resolved more quickly with seizure of collateral. The bank has also expanded its new lending program, committing about $200 million to new borrowers since 2010.
OneUnited Bank CEO Kevin Cohee has urged regulators to take a more nuanced approach to evaluating minority-owned banks in the wake of the bank's recently announced “Needs to Improve” Community Reinvestment Act rating. In its report, the FDIC knocked OneUnited, which operates in Boston, Miami and Los Angeles, for insufficient lending in its Boston and Miami markets. Cohee argued that minority-owned banks should not be measured the same way a large bank is judged on community lending. “We do not think the report is fair or accurate,’’ Cohee said. Loans in low income areas, “while appropriate to support the economic development of these communities... have unique, riskier profiles.”
Fannie Mae CEO Timothy Mayopoulos has provided new details on regulators’ plans to boost mortgage lending, expanding on Federal Housing Finance Agency Director Melvin Watt’s comments that Fannie and Freddie would back loans with down payments as low as 3 percent of the home's value. Mayopoulos expects Fannie’s low-down-payment mortgages to cost the borrower less than Federal Housing Administration loans. But he also said Fannie’s loans would require private mortgage insurance on top of the down payment, which could limit the size of the program. It is not clear whether private mortgage insurers will want to take on the riskier loans. The program could also introduce higher default rates, since the 20 percent down payment has previously acted to filter applicants who were likely to default.
Boyd “Bo” Megginson has been named the new Vice President for Business Lending Services at United Bank. Megginson will drive business development efforts for the bank with an emphasis on small business lending. He brings more than 20 years of business consulting experience to the position. “[Megginson] understands the challenges businesses face when getting started and when looking to expand... our clients will appreciate the consultative approach he brings to business development," said United Bank President and CEO Robert Jones.