Community Development Banking News
CDFI Banking: Industry, Policy, and Beyond.
The FDIC’s Division of Depositor and Consumer Protection will host a webinar, Model Approaches to Community Bank/CDFI Partnerships on July 31, 2014, from 2:00 p.m. to 3:30 p.m. The webinar accompanies the recent release of the FDIC resource guide, Strategies for Community Banks to Develop Partnerships with CDFIs, which lays out strategies for community banks to identify and evaluate opportunities to collaborate with CDFIs. The program includes presentations on model partnerships between banks and CDFIs as well as an overview of U.S. Treasury programs that support bank/CDFI partnerships. Registration is open until July 28.
Simmons First National Corp. will donate a branch to Arkadelphia, Arkansas-based Southern Bancorp upon finalizing its acquisition of Delta Trust & Bank. The branch transfer allows Simmons First to adhere to federal regulations limiting acquisitions in places where banks already hold significant market share while also supporting Southern's community development work. “Our focus is specifically on rural communities just like Eudora, which means we are aware of both the challenges they face and the opportunities that exist," Southern Bancorp Inc. CEO Darrin Williams said.
The First Bancshares Inc. of Hattiesburg, Mississippi has completed its acquisition of Bay Bank and its holding company, BCB Holding Co. Inc. The acquisition brings The First's total locations in Mobile and Baldwin counties to 10 and gives the company the largest market share among community banks in those counties. "We are excited about the opportunities that this merger will create in the Mobile market," said M. Ray "Hoppy" Cole, president and CEO of The First. "The combination of Bay Bank and The First will create a community bank focused on its local markets with the products, services and lending capacity of a $1 billion dollar organization."
The CDFI Fund has released its FY 2013 Year in Review report detailing impact metrics for award programs. In FY 2013, $172.6 million was awarded to 201 organizations by the CDFI Program (including healthy foods) and the Bank Enterprise Award Program awarded $17 million. BEA Program applicants increased spending on community development projects by $493.5 million over the prior year. That includes a $427.8 million increase in loans and investments in distressed communities as well as a $55.4 million increase in loans, deposits and technical assistance to CDFIs and a $10.3 million increase in the provision of financial services in distressed communities.
Urban Partnership Bank's newsletter details the bank's Detroit redevelopment projects. Work is underway on Urban Partnership's redevelopment of a 126,000 square-foot building into rental housing and office space for the Archdiocese of Detroit. The bank's increased presence on Detroit holds promise for boosting the city's economy, says Urban Partnership bank senior business banker Beverley Loyd. "This is a great opportunity to help with the ongoing revitalization of Detroit. Creating good jobs, developing quality affordable housing and helping small businesses grow are essential ingredients of a stronger, healthier city," said Loyd.
Mortgage lenders and investors have been desperately trying to figure out how to originate non-QM loans that offer lenders the kind of profits last seen during the days of subprime lending. At a time when loan volumes have plummeted, lenders can charge consumers significantly higher mortgage rates for these products. The first step for many lenders has been introducing niche-products safe enough to compensate for legal dangers. These lenders have introduced loans for self-employed borrowers, foreign nationals and borrowers with blemished credit from a past short sale or foreclosure. They are also focusing on specific property types like condominiums that do not meet standards set by Fannie Mae or Freddie Mac.
The latest edition of the Pan American Bank Post is out with the Chicago bank's latest community impact news. Pan American employees volunteered at a number of neighborhood events recently, including Saint Anthony’s Health Fair. The event featured carnival games and food from local restaurants, along with health advice, free immunizations and free health screenings for residents. Pan American Bank employees also participated in Neighborhood Housing Service's Neighborworks day by refurbishing Chicago's Unity Park Garden with some planting and grooming.
First Bancshares received a profile in the Hattiesburg American for its continued service to local customers. “Hattiesburg is a very robust economy — we’ve got two medical centers, two universities, a military presence with Camp Shelby,” said M. Ray “Hoppy” Cole, president and CEO of First Bancshares and The First. “All those things help give it a stable, growing economy, and stability and growth is good for banking.”
Despite the notoriety that subprime loans gained during the financial crisis, they are re-emerging as one answer to the tight lending standards that have shut out millions of would-be homeowners. Subprime loans, which accounted for about 15 percent of all new home loans in 2005 and 2006, are now just 0.5 percent of the mortgage market. Only a handful of lenders are offering them, at interest rates from 8 to 13 percent. But the market is picking up. The number of lenders responding to inquiries from subprime borrowers started to catch up to the number responding to prime borrowers beginning in the fourth quarter of last year. Large banks are looking at subprime borrowers because rising mortgage rates have killed off much of their refinancing business.
Some 200,000 households in Louisiana borrow from payday lenders every year; in Baton Rouge, 20 percent of bankruptcy cases involve the loans. But Together Louisiana, a coalition of religious and civic groups, found out just how hard it can be to fight the predatory lenders. The group ran up against a wall of opposition when they launched a campaign for stricter payday lending rules. The number of industry lobbyists at the statehouse jumped from a handful at the beginning of the legislative session to more than fifty by its end. In late April, the state Senate rejected the bill. Advocates in Louisiana are now awaiting new rules from the Consumer Financial Protection Bureau, which is expected to introduce new regulations on the industry this fall.