News
Federal Deposit Insurance Chairman Jelena McWilliams is nearly halfway through a 50-state listening tour. As a result of meetings with local bankers, state supervisors, and consumer groups, Chariman McWilliams has directed staff to increase efforts to decrease regulations, promote community development banking, preserve MDIs, modernize the CRA, and encourage banks to serve low- and moderate-income househoulds.
When they have a complaint about a negligent or belligerent landlord, many New Yorkers have begun sidestepping their landlords for the bankers that finance the buildings. Many banks have given loans to landlords explicitly designed to activate loopholes that remove units from rent-regulated status. Now residents, led by attorneys and advocates at local non-profits, are convincing banks to make their lending practices more fair and transparent.
The StoryBank Project is a CDBA initiative to capture success stories of various impactful loans from our member banks through the eyes of their customers. These important stories show how underserved communities benefit directly from mission-based banking and financial services. Our latest video highlights Carver State Bank in Savannah, Georgia. The story follows two of the bank's lending projects: Renee's Kids World, a daycare center offering wraparound care to children of working parents, and the Old Savannah City Mission, a nonprofit shelter for homeless and formerly incarcerated local citizens.
Bob Klamp, CEO of GN Bank, has been elected to serve on the Office of the Comptroller of the Currency's (OCC) Minority Depository Institutions Advisory Committee (MDIAC). The committee provides an invaluable perspective on the business environment affecting minority depository institutions, their customers, and the communities they serve. The committee also provides advice regarding the condition of minority depository institutions, potential regulatory changes or steps that may promote their health and viability. The committee includes officers and directors of minority depository institutions and other depository institutions committed to supporting minority depository institutions of all types and sizes. CDBA's membership may contact Bob Klamp by email with thoughts on relevant issues.
Community banks tend to have an aversion to hiring professionals from outside the banking industry, executive recruiters say. The reluctance is understandable, as numerous banking regulations require personnel who understand policies, procedures, risk assessments and vendor management. Furthermore, hiring IT veterans uncommitted to the banking industry can get expensive, as doing so will have employers competing with higher-paying offers from other tech employers. However, if small banks wish to stay competitive, particularly when it comes to their technology, these are issues that will soon need to be addressed.
The Mississippi Delta faces a myriad of financial struggles that will need innovative solutions to resolve. Southern Bancorp is one of the forces doing important work to meet that need. When Bubba O'Keefe, the official tourism director of the small town of Clarksdale, wanted to acquire a local theater, Southern Bancorp stepped in to finance it. And then when the theater's roof fell through and required servicing, Southern's CEO Darren Williams stood by O'Keefe's side. With ventures like this, the financing of a new local hotel, and financial literacy classes, Southern Bancorp goes above and beyond to uplift this small town, and the greater Mississippi area.
Houston-based Fig Loans is now the first FinTech company to receive both B Corporation and Community Development Financial Institution (CDFI) certifications. Fig uses predictive analytics to offer credit building alternatives to predatory loans. Fig's mission is to give working class Americans a second chance at building credit. And with both CDFI and B Corp awards under its belt, Fig has met two of the highest standards for social performance, transparency and accountability. "The definition of a CDFI aligns word for word with the founding vision for Fig," says Co-Founder Jeff Zhou. "We are constantly impressed by the tremendous work our nonprofit partners do for communities underserved by mainstream financial services. Fig's job is to support and enhance the impact of these amazing organizations."
For 45 years, the African American congregation of First Union Baptist Church has worshipped and served together in a historic building on Grand Concourse in the Bronx. However, over the last ten years the church has faced significant financial troubles. Now, Spring Bank is proud to facilitate a redesign of the location, including 45 new units of affordable housing and new retail space to help the church continue its legacy. "This was not a cookie-cutter loan request," says Akbar Rizvi, the bank's Chief Lending Officer. "But at Spring Bank we pride ourselves on making hard deals work if the community benefits."
The Native American Financial Officers Association (NAFOA) has awarded Red Lake the 2019 Small Deal of the Year Award for establishing a grocery store and retail complex in an area that greatly needed one. The new store eliminates a 60-mile round trip for healthy foods and everyday items for the local community. Native American Bank, the lead financing institution for the Red Lake complex, is proud to have played a small part in this success. "Native American Bank was honored to serve as a problem-solver and trusted resource for creative financial solutions," said bank President Tom Ogaard. "We hope to bring our understanding of sovereign governments and regulatory issues to even more community development projects in underserved tribal areas."
Americans seem to be managing their debt well. However, some warning signs, such as an increasing Money Anxiety Index, have appeared in recent months. The Index, developed by Analyticom's Dr. Dan Geller, measures consumer saving and spending habits with the philosophy that consumer behavior may predict economic downturn. And now, the Index appears to be foreseeing another drop. "We are in an economic slowdown," says Geller, who argues banks will need to monitor consumer behavioral trends, like the type of accounts customers use and the spending choices they make, in order to stay afloat. Geller offers further insights in this interview with American Banker.