Community Development Banking News
CDFI Banking: Industry, Policy, and Beyond.
A plan to modernize the Community Reinvestment Act should theoretically be welcomed by community development financial institutions, but many such organizations are raising alarm about a key component of the proposal written by two federal regulators. The framework drafted by the Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. would place a new emphasis on the dollar amount of CRA projects for banks to be in compliance. This worries CDFI loan funds, which specialize in making relatively small credits and worry the new plan will lead to less capital from bank partners.
Urban and rural America lost branch banks at a similar rate from 2012 to 2017, according to the Federal Reserve. But the loss could have graver consequences for a larger proportion of rural areas.About 40 percent of rural counties experienced a net loss of branch banks from 2012 to 2017, according to a new report from the Federal Reserve System. The study found that 39 of these rural counties were "deeply affected" by the loss of banking services, meaning they had 10 or fewer bank branches in 2012 and lost at least half that number over the five-year period.
Americans desperately need help saving money, and fintechs are stepping up with intuitive apps that make saving simple and automatic. As consumers now funnel billions of dollars into these apps, banks and credit unions that don't join the crowd could be missing out on a big opportunity.
United Bank is proud to announce the addition of Elmo “Douglas” Ziebach, Jr. to their Board of Directors. The Monroeville, Alabama business owner and community leader begins his term body following service as a member of United Bank’s Monroe County Advisory Board. “We are very pleased to have Douglas join our board.” said Bob Jones, United Bank President and CEO. “His commitment to community service as well as his success in business make him eminently qualified as a bank director. Douglas’ business interest fit nicely with our service area and growth plans. United Bank’s dedication to forestry and rural land financing coupled with Douglas’ timber expertise, strategically align with our footprint and mission. We welcome his guidance in this emerging market.”
Arkadelphia's Southern Bancorp Inc. has joined the ranks of Certified B Corporations, an Arkansas first. The $1.4 billion-asset lender is among 10 banks and thrifts in the nation to gain the designation, which denotes the highest standards of social performance, transparency and legal accountability, balancing profit and purpose. Southern Bancorp changed its legal structure to become a benefit corporation in 2017. The move solidified its legal empowerment to pursue societal impact alongside profit. Arkansas was among seven states to enact B Corporation legislation in 2013.
Few of us think about how our banking affects the environment but, in reality, putting your money with a green-minded financial institution may be one of the best things you can do to help conserve land, protect air and water, save endangered wildlife and mitigate climate change. Banks (owned by shareholders) and credit unions (owned by the customers) lend and invest some of the deposited funds they are holding, which is how they're able to pay interest back to you. A bank or credit union that limits its investments to sustainability-oriented companies and institutions is well on its way to being considered green. Responsible options include Amalgamated Bank, Sunrise Banks, City First Bank of DC, Beneficial State Bank, and Southern Bancorp.
Teri Williams is President & COO and owner of OneUnited Bank, the largest Black owned bank in the country and supporter of the #BankBlack and #BuyBlack Movement. She is responsible for the Bank's strategic initiatives, as well as the day to day operations, including all retail branches, marketing, compliance, lending, information technology, customer support, legal, and human resources. Ms. Williams brings 30 years of financial services expertise including Bank of America and American Express, where she was one of the youngest Vice Presidents.
The Credit Insecurity Index is a new tool that helps to provide a more comprehensive view of credit access and community credit health. By moving beyond metrics that traditionally focus on residents without a credit file or score, this Index incorporates an additional assessment of residents who are "credit constrained," that is, unlikely to obtain credit at choice to manage emergencies, take advantage of opportunities, or invest in one's future. The report, Unequal Access to Credit: The Hidden Impact of Credit Constraints, explains how the Index provides a more complete picture of communities' financial security by scoring credit insecurity for states and counties over time.
Sourced from the above New York Fed article, this map is a vivid depiction of credit inequality in the United States. The dark areas show counties where a large proportion of the population has no access to credit, while the lighter areas are considered "credit-assured" or "credit-likely."
Proposed changes to the Community Reinvestment Act could serve as a catalyst for banks to become more active in financing projects inside Opportunity Zones, according to some development experts. Opportunity Zones provide tax incentives to investors in development projects located low and moderate-income neighborhoods. Under proposed changes to the 42-year-old Community Reinvestment Act, any type of lending conducted in a low- or moderate-income census tract located within an in Opportunity Zones would qualify for CRA credit. Jeannine Jacokes, the CEO of the Community Development Bankers Association, said her biggest concern is that banks will focus only on projects that promise the highest and fastest return on investment. "This will encourage banks to do things in Opportunity Zones, but it will exacerbate the concerns about gentrification," she said.