Community Development Banking News
CDFI Banking: Industry, Policy, and Beyond.
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.
JPMorgan Chase is partnering with The Harbor Bank of Maryland as part of The Financial Agent Mentor Protégé program sponsored by the U.S. Department of the Treasury. The mentor program enlists large banks that currently serve as Financial Agents to the Treasury to mentor small, highly capable banks. This program helps prepare the new generation of financial institutions to succeed in responding to the dynamic and diverse challenges that arise when working with the Treasury. "We're excited about the opportunity to help black-owned community banks expand their capabilities through this program," said Eva Robinson, Head of Treasury Services Public Sector Sales for North America, J.P. Morgan.
Banking has radically changed in recent years with technology giving rise to mostly virtual, impersonal interactions. However, community banks, and their characteristic personal touch, are still vitally important to many across the nation. And they should be, because even though they are traditionally smaller banks, they make up a staggering 92 percent of all banks in the nation. So what is it about these institutions that make them so popular? Here, Abrigo's Kylee Wooten seeks to answer that question in five ways.
Fifteen years ago, the Senate passed a resolution recognizing the month of April as a time to "highlight the importance of financial literacy and teach Americans how to establish and maintain healthy financial habits." However, research may now suggest that such programs may not be that impactful. Moreover, for many people the issue is not lack of financial knowledge, but rather the conditions of extreme inequality and income volatility that keep them down. The reality is, people who have money woes tend to already be keenly aware of their problems. For this reason, Jennifer Tescher, CEO of the Center for Financial Services Innovation, argues that we need more than uplifting content to guide people back to financial health.
Earlier this month, Next City and CDBA member Community Bank of the Bay joined forces to host the annual Spaces and Places conference. This event, designed as an "unconference," intends to shine a light on community development issues affecting communities of color. These are issues often ignored by urban planners and design communities, but are nonetheless in dire need of attention. This year's workshop explored collective and cooperative power, affordability in housing, homelessness, climate change displacement and environmental justice, and the needs of black cultural districts. The recorded stream of the event is available here.
The Community Development Financial Institutions (CDFI) Fund was created under the Clinton Administration, but its roots are much deeper than that. No one knows those roots better than Clifford Rosenthal, who recently completed "Democratizing Finance: Origins of the Community Development Financial Institutions Movement," a 556-page history of mission-driven lending and investing in the United States. "What is totally unique about the CDFI Fund in policy history is that it provides capital — not loans, but discretionary capital — to build your balance sheet," says Rosenthal.
The recent #BankBlack social media campaign has brought black banking back into the national consciousness. The movement has inspired thousands of people across the country to transfer or deposit millions of dollars into black-owned banks for the first time. With this support, black-owned banks invest in urban communities, employ African Americans, and inspire black home ownership. For those considering making the change, here is a list of 13 banks to consider, including CDBA members United Bank, Industrial Bank, Harbor Bank of Maryland, Broadway Federal Bank, OneUnited Bank, Carver State Bank, First Independence Bank, GN Bank, and Metro Bank.
Washington, DC's historic U Street has served a long tenure as the vibrant heart of African American culture and entrepreneurship in the city. And after countless historical turning points and ensuing riots, three black-owned businesses have weathered decades-long hurdles to offer a glimpse into the tight-knit community and bustling neighborhood as it once stood. Ben's Chili Bowl, Lee's Flower Shop and CDBA member Industrial Bank all opened their doors in the mid-1900s and are still run by the second, third, and fourth generations of the same families. They maintain tight, intertwining bonds as they've grown and endured challenges on U Street over the years.