Can community development financial institutions be anti-racist? As financial institutions, CDFIs inherit the very tools of capitalism that have wreaked havoc on communities of color for decades in repeated cycles of cynical wealth extraction. Can any organization overcome that history? CDFIs believe that they can use the tools of capitalism for good. But without deep analysis and interrogation, each tool should remain suspect.
Banks have been permanently shuttering branches for years, but the number of closures hit a record in 2020 as the pandemic accelerated the move by many customers to online banking. Banks closed 3,324 branches last year, according to a tally by S&P Global Market Intelligence. "In the last 60 days, I've had two mayors reach out to me saying, 'Would you bring a bank branch here?' " says Darrin Williams, CEO of Southern Bancorp, which specializes in underserved communities. "In a lot of the rural communities we serve, the bank branch is part of the social fabric," Williams said. "If you go to Truman, Ark., on a payday Friday, there are going to be 10 people deep in the line. People want to come to that bank branch because it's social."
Later this spring, the CDFI Fund will be accepting applications for a new grant program, the Small Dollar Loan Program. The Small Dollar Loan Program was created to encourage Certified CDFIs to establish and maintain small dollar loan programs and provide alternatives to high cost small dollar loans. For this program, small dollar loans are unsecured loans of up to $2,500. The grants may be used for two eligible activities, loan loss reserves and technical assistance activities. More information about the Small Dollar Loan Program, including details about the application and the requirements to apply, will be made available soon. However, organizations interested in applying for FY 2021 funds should start their preparations now by following the “Getting Ready to Apply” steps outlined here.
A hundred years ago, Brooklyn was teeming with mutual savings banks. There was the Brooklyn Savings Bank, the Dime Savings Bank of Brooklyn, the South Brooklyn Savings Bank, the Williamsburg Savings Bank, ... but they are all gone. A mutual savings bank does not have shareholders and is operated on behalf of its depositors. Most, including three of the four remaining mutual savings banks in the city with branches in Brooklyn, Ridgewood Savings Bank and Cross County Savings Bank (founded in 1888 as Bushwick Savings & Loan Association of New York) out of Queens, and Ponce Bank out of the Bronx, were established by local residents for local residents about a hundred years ago to help improve their lot by saving and homeownership. They were, and one could argue, still are the quintessential community banks.
Emma C. Chappell, 80, of Philadelphia, who galvanized Black Americans around the country in 1992 when she opened United Bank of Philadelphia, died Tuesday, March 16, of complications due to sepsis at Riddle Memorial Hospital in Media. Mrs. Chappell lived in Wynnefield Heights. She was the first Black woman to found a bank since Maggie Lena Walker established the St. Luke Penny Savings Bank in Richmond, Va., in 1903. However, Mrs. Chappell was the first Black woman to charter a commercial bank in the country, said Joann Bell, cofounder of the Black Women's Leadership Council.
The Community Development Financial Institutions (CDFI) Fund is issuing a call for well-qualified personnel to serve as application reviewers for the FY 2021 application round of the CDFI Program and Native American CDFI Assistance (NACA) Program. The CDFI Fund has contracted with Areeva/F2 Solutions (AF2) to recruit and process applications on a rolling basis for potential candidates. For more information on the CDFI and NACA programs, visit the CDFI Fund website at https://www.cdfifund.gov/Pages/default.aspx.
Several banks have announced initiatives totaling billions of dollars that are aimed at addressing racial inequalities, but observers say the programs need to be carefully tailored. City First Bank, a lender in Washington, closely cultivates relationships with its borrowers, finding ways to direct capital to promising but fledgling businesses. The bank is seeing an uptick in interest from larger financial institutions, said its chief lending officer, Sonja Wells, “but it’s all still at a smaller scale than it could be.”
United Bancorporation of Alabama, Inc. ("UBAB") today announced that it has signed a definitive agreement to acquire Town-Country National Bank ("TCNB"), a Camden, AL based community bank with approximately $126.2 million in total assets as of December 31, 2020. TCNB shareholders will receive aggregate cash consideration of $28.5 million, with a portion of the consideration paid as a special dividend prior to the close of the transaction. TCNB will rebrand as Town-Country United Bank and operate as a separate banking subsidiary under UBAB. "The Town-Country franchise is complementary to our Alabama footprint, adding an adjacent market presence in Camden, AL, where we are excited to introduce the United brand," explained Robert R. Jones III, CEO, President and Director of UBAB.
Comerica and the Comerica Charitable Foundation announced today a commitment to invest approximately $16 million in 2021 to support small businesses and communities impacted by COVID. This support is in addition to the $11 million in 2020 that was directed toward small business relief and nonprofits providing essential needs, such as food and supplies – as a result of the pandemic – in Comerica's footprint of Texas, Michigan, California, Arizona and Florida. In late 2020, Comerica moved $10 million in deposits to Minority Depository Institutions (MDIs), as well as established mutual mentoring relationships with these institutions. Specifically, Comerica allocated $2.5 million to each selected MDI, including First Independence Bank in Detroit, Mich.; Broadway Federal Bank in Los Angeles, Calif.; Unity National Bank in Houston, Texas; and Commercial Bank of California in Irvine, Calif.
In February, the Clean Energy and Sustainability Accelerator Act was reintroduced to Congress. The legislation would allow for the creation of a national green bank, which would use $100 billion in private and public funds to invest in clean energy projects. This move, together with the fact that 39% of voters said they would take environmental factors into consideration when choosing a bank, seems to point to the financial industry getting greener. "We're living in a time of great societal change, and consumers have made it clear that they want brands to take a stance on things like sustainability and racial justice," said David Reiling, CEO of Minnesota-based Sunrise Banks, a bank that brands itself as socially responsible. "Frankly, companies need to make a commitment one way or the other – they can't remain silent."