News
The acquisition of First Tuskegee Bank in Alabama by CDFI bank Liberty Bank & Trust Co. of New Orleans should have been routine. The deal would combine two small minority-owned institutions in the Southeast, giving them additional heft to cope with new regulations. It would also help Liberty expand its originations of consumer, mortgage and commercial loans while adding more low-cost deposits. But federal and state regulators still have not approved the application they received nearly a year ago, marking an unusually long delay for an acquisition of this size. The companies have remained tight-lipped on the status of the deal, but they have not withdrawn the agreement. Kenneth Pickering, an attorney advising Liberty Bank on the acquisition, said the deal is still on and is awaiting regulatory approval.
United Bank of Atmore, Ark. has announced a pledge of $17,000 to help the Atmore YMCA alleviate recent shortfalls that threatened to close the organization. United Bank’s commitment of $1,000 per month through December 2015 will allow the YMCA to continue providing recreational services to children, families and senior citizens. In addition to its financial commitment, the bank is helping the YMCA draft a grant application from the Alabama Historical Commission for capital enhancements. “Our commitment today will meet an immediate need, but it’s also reflective of United Bank’s commitment to help the YMCA find a long-term solution to its funding issues,” said Robert Jones, President and CEO of United Bank.
Urban Partnership Bank has extended $38.7 million of credit to commercial borrowers so far in 2014. The bank's newsletter highlights several of the loans, including $1.1 million in financing for investment rentals in the Park Boulevard development, a new mixed-income community located in Chicago's South Side. The project is a regeneration of the area that was once the site of the Chicago Housing Authority's heavily distressed Stateway Gardens highrise public housing project. The Park Boulevard development will create much-needed affordable student housing for the nearby Illinois Institute of Technology. It will contain over 400 units and feature new shops including a Starbucks and a Jimmy John's sandwich shop.
Sunrise Banks of Minneapolis-St. Paul is exploring new ways of providing credit and financial services to the unbanked and underbanked through technology, says CEO David Reiling. The bank now offers microloans offered through employers as an employee benefit. The program is backed by software that quickly accepts an application for a microloan and provides an immediate decision, depositing funds in an employee’s bank account the next day or making them available on a prepaid card. “If you are really going to be in this business, you need to leverage technology in order to keep the cost as well as the compliance in-check,” Reiling says.
In a recent interview, OneUnited Bank President Teri Williams discussed her career path, her new children's book, and OneUnited's efforts to foster financial comebacks for customers with damaged credit. Williams' new book, "I Got Bank," is a child-friendly guide to financial concepts. For Williams, who once aspired to be a teacher before entering finance, the book builds upon a long-held interest in education and helping disadvantaged communities. Education is also at the heart of the bank's Unity Visa card, which provides financial literacy training alongside safe credit. "[I wanted] to take this financial services experience that I had and figure out ways to give back." Williams said.
The CDFI Fund and Opportunity Finance Network will be hosting a training workshop July 30-31 at Kaiser Town Hall in Portland, Oregon as part of its Financing Community Health Centers Capacity Building Initiative series. The workshops help CDFIs develop the skills to finance and provide services to community health centers in medically underserved communities. CDFIs without community health center lending experience that have relevant community facilities or real estate activities, or CDFIs with existing CHC lending programs looking to expand, are encouraged to participate. The deadline for applications is this Tuesday, June 8. Click here for the application form.
An in-depth look by the CFPB into its consumer complaint database has yielded some surprising insights, including a lower-than-expected number of payday loan complaints. While 34% of complaints in the database regarded mortgages, 20% regarded debt collection and 14% concerned credit card products, just 1% were for payday loan products. The discrepancy may be due to the comparatively late rollout of the payday lending complaint system or to lower awareness of the CFPB complaint system among consumers targeted by payday lenders. The CFPB is set to introduce new payday lending regulations later this year.
According to a new survey of 100 bank executives, U.S. banks are increasingly setting their sights on underbanked customers. About 23% of bankers said underbanked customers present the greatest growth opportunity for their bank, up from 12% a year ago. Banks are interested in those customers because they spend more money on fees for cashing checks or ATMs than other customer segments. The survey also found that despite the growth of mobile banking, roughly 41% of bankers polled intend to increase the number of physical branch locations over the next 12 to 19 months, which could broaden their reach to larger segment of underbanked customers.
Although big banks tend to be ahead of the curve with online and mobile offerings, small banks have some advantages — such as better postcrisis reputations — that could put them streets ahead with millenials. "Does technology play a role? It is the role," said Joe Sullivan, chief executive of consulting firm Market Insights. Glen Fossella, a tech industry executive, says that millennials tend to tie brands to their self-image. For example, they may buy an iPhone in order to seem cooler or smarter than those who purchase an Android. Chicago-based Liberty Bank for Savings conducted a series of focus groups aimed at understanding the banking needs of young people. To better connect with millenials, they now offer debit cards which can be customized to feature iconic local landmarks.
The White House Rural Council has announced the creation of a new fund through which private entities can invest in rural infrastructure projects across the country. Target investments will include hospitals, schools, sewage systems, energy projects, broadband expansion, food systems and other rural infrastructure. CoBank, a national cooperative bank serving rural America and a member of the Farm Credit System, is the fund's anchor investor with an initial commitment of $10 billion. Capitol Peak Asset Management will manage the fund and work to recruit more investors. The U.S. Department of Agriculture and other federal agencies will identify rural projects that could be beneficiaries of the financing.