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A Supreme Court decision that suggests limits on Native American tribes' off-reservation authority has triggered debate over whether online payday lenders who claim tribal exemptions to state law will be affected. The ruling states that although states cannot sue tribes, they could instead pursue individual members for offering loans that violate state laws, including those that restrict payday lending. Consumer advocates hailed the decision as a new tool for stopping online lenders who claim Native exemptions. But other analysts argue the ruling is limited because it does not address the core ambiguity of the practice -- whether or not the lenders are operating on tribal territory when they make online loans.
The redevelopment of a historic 126,000 square-foot building in Detroit's Capitol Park neighborhood is expected to be completed by the end of the year with $38.5 million in financing from a group including Urban Partnership Bank. The building will be turned into new office space for the Archdiocese of Detroit, 56 loft-style apartment units and first-floor retail. The financing is part of a public-private partnership made possible by federal New Markets and historic tax credits and state historic and brownfield tax credits. Beechwood, Ohio-based Liberty Bank NA, Chase Bank, J.P. Morgan Chase, the Chicago-based National Community Investment Fund, Invest Detroit and Lansing-based Develop Michigan Inc. will also participate in the financing.
Preston Pinkett, President and CEO of City National Bank, says the bank is continuing to recover from the financial crisis. Pinkett was brought in about three years ago to plot a new course for the bank, which has been operating under a consent order from the OCC since 2009. Although City National faces challenges in loans and deposits, Pinkett noted the bank's progress in reducing problem assets. "We do see light at the end of the tunnel, and it's not another train," he said. Pinkett is planning a private offering to raise more capital for the bank before the end of the year.
Payday lending trade group Community Financial Services Association of America has sued U.S. banking regulators, accusing them of pressuring banks to stop serving payday lenders. The complaint alleges that under the Department of Justice's Operation Choke Point, regulators at the Federal Reserve, FDIC and OCC have engaged in "a concerted campaign" to drive payday lenders out of business by pressuring financial institutions to terminate relationships with the lenders. According to the suit, more than 80 banks have cut off relations with payday lenders due to warnings that continued interactions “will result in harsh and prolonged examinations, reduced examination ratings, and/or other punitive measures.”
The Batten Institute at the University of Virginia's Darden School of Business profiles Southern Bancorp of Arkadelphia, Arkansas for Forbes. “Rural America is facing increasing challenges in light of the accelerating banking exodus,” says Dominik Mjartan, Senior Vice President at Southern Bancorp and member of the CDBA Board of Directors. “In 30 percent of our markets we are the only bank in town that offers responsible financial services, including transactional accounts, consumer credit and residential mortgages... Without access to a wide range of financial services that meet the unique needs of poor rural communities, their residents are susceptible to predatory lenders."
Hundreds of student-run bank branches and credit unions are opening in schools across the U.S. The school systems hope the branches will help student employees build up their resumes and make money while building financial literacy and providing families access to safe credit. Union Bank has three student-run branches in California, all located in low-income neighborhoods. The bank spends up to $200,000 to build each branch, staffs them with managers and pays student employees stipends and scholarships. Union views the branches as part of their community service and doesn't expect them to make money. The Office of the Comptroller of the Currency is now considering a special designation for school branches, which would pave the way for more.
A new video shows David Reiling, Sunrise Banks CEO and CDBA Director, accepting the Good Leader Award at Minnesota Business Magazine's Community Impact Awards. The awards are intended to recognize leaders and businesses that have a real impact on their communities. The magazine recognized Mr. Reiling for his work in community development finance, highlighting his advocacy on behalf of underserved consumers including Hmong and Somali immigrant communities. "[Leadership] is really about being a servant to those that you lead," Reiling said. "We can accomplish bigger things together and we can go places that we never thought we could before."
Chicago-based Urban Partnership Bank has announced it will add two new employees to its Detroit lending staff and raise its annual lending goal for small business, nonprofits and real-estate investors to $10 million. The bank has already loaned millions of dollars to Detroit-based businesses since opening its Midtown office in 2012. Borrowers in the city so far have included the owners of a 138-unit apartment building who needed a renovation loan and a snack-food manufacturer that revived an abandoned factory and will be creating 50 new jobs. "We're aggressively seeking community borrowers to build businesses and revitalize business districts in Detroit’s neighborhoods," said Brian Berg, Director of Communications for Urban Partnership.
BCB Holding Company, Inc. shareholders have approved the company's merger into The First Bancshares, Inc. BCB is the parent company of Bay Bank, which will be merged with The First, A National Banking Association. The First has now received all regulatory approvals required to complete the merger, which is expected to become effective June 30. Hoppy Cole, President and CEO of The First, commented, “We are excited and look forward to welcoming the staff, shareholders and clients of BCB Holding Company, Inc. and Bay Bank to our team. The combination of these two service oriented community banks will allow us to better serve our customers in south Alabama and the Gulf South Region.”
A growing number of financial start-ups are being introduced, each hoping to usurp the giants of Wall Street by offering better services and lower fees. They see banking as a prime candidate for disruption because it tends to run on bloated, dated technology. Even applying for a loan can take weeks or months, an eternity in the on-demand world of tech innovation. But tech entrepreneurs have found starting a bank to be an arduous ordeal, made more difficult by a maze of regulatory requirements and drawn-out compliance processes. It also requires a tremendous amount of money. These realities have forced many entrepreneurs who hoped to replace banks, such as Simple, to scale back their ambitions and partner with existing banks.