Community Development Banking News
CDFI Banking: Industry, Policy, and Beyond.
Rural America has a robust cultural history that has enriched the nation and its people. However, rural areas are also beset with social and economic challenges. Population migration and persistent poverty are contributing to a widening urban-rural divide in many states. But by utilizing the creative sector, specifically arts and culture, governors have a viable approach for changing the status quo. This new Rural Action Guide shares in depth research, processes, and lessons for just how to lead strategies for success.
Governor Lael Brainard of the Federal Reserve Board recently detailed possible steps forward on reforming the Community Reinvestment Act. These possible provisions include an updated approach to CRA assessment boundaries, revising how banks are tested for community development activities, and tailoring certain CRA requirements based on bank size. The aim is to recognize activities beyond a bank's branch network, the traditional CRA assessment boundary, while still prioritizing activities within that network. "By creating separate assessment areas for retail and community development activities, we believe that banks would continue to place their community at the center of their retail lending and service activities while participating in meaningful community development opportunities," said Brainard in a speech to the National Community Reinvestment Coalition.
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. This month's video highlights M&F Bank in Durham, North Carolina -- the second-oldest minority-owned bank in the United States. Its featured client, UDI Community Development Corporation, is a nonprofit that reinvests in low-wealth communities.
The CDBA office would like to introduce you to the newest member of our team. As CDBA's Membership Director, Anna will lead the development and execution of education and peer networking opportunities for member banks. Anna joins CDBA from Partners for the Common Good, a national CDFI loan fund based in Washington, D.C. With a background in CDFI Fund programs, social impact analysis, and investor relations, Anna is excited to work with CDFI banks to build capacity and continue to serve low- and moderate-income communities. Anna is originally from Flowery Branch, Georgia and holds a Bachelor of Arts in History from Princeton University. Please join us in welcoming Anna.
B Corps are businesses that have been certified by the nonprofit B Lab as being committed to the ideal of using "business as a force for good." As community development banks already have that ideal built into their foundations, these banks make a great fit for the B Corp movement. "It's in our DNA to serve our community, particularly low- and moderate-income communities," says City First Bank CEO Brian Argrett. "Our approach to being a community bank was already fully aligned with what B Lab was doing." CDBA's Spring Bank and Sunrise Banks are also identified as stellar examples.
Today, the U.S. House of Representatives Subcommittee on Financial Services and General Government conducted a hearing on the impact of Community Development Financial Institutions. The video of the entire hearing is now available for online viewing and review.
Bob Jones, President and CEO of United Bank and Chairman of CDBA's Board of Directors, testified before the Subcommittee on the value of CDFI-certified banks and the community impact and effectiveness of the CDFI Fund's Bank Enterprise Awards. "The BEA Awards allowed us to present opportunities and continue to make loans to help people build credit," said Mr. Jones. "We all understand that until you get a credit score and you get into the mainstream financial system in America, you are operating off the grid. That's a place that's not sustainable to take advantage of all the opportunities we offer in this country for homeownership and upward mobility. So we see [the BEA Awards] as something critical to what we do."
Other witnesses included Annie Donovan, former CDFI Fund Director and Senior Fellow for the Center for Community Investment, Grace Fricks, President and CEO of Access to Capital for Entrepreneurs, and Joe Neri, CEO of IFF.
When trying to create new, innovative digital customer experiences, many banks struggle to pinpoint where customers are most dissatisfied. To help banks better identify these pain points, European firms such as Glassbox and ContentSquare step in to help. These companies offer high-end tools such as session replay, digital experience analytics, customer engagement tracking, and audit trailing to help banks see where customers are and are not engaged. In the simplest terms, the software allows banks to see what clicked with consumers and what did not.
City First Bank is pleased to announce several new board and executive team appointments, including The Honorable Marie C. Johns, Ms. Shannon Herbert, Mr. Tom Nida, and more. "The last several years have seen robust growth at City First Bank. Adding this level of leadership to our already very talented team allows us to better serve our clients and community," says City First Bank President and CEO Brian E. Argrett. "Our talented leadership team members help us to equitably advance our communities. We are delighted to have them on board."
Southern Bancorp has announced its opposition to a proposed rule change by the Consumer Financial Protection Bureau. Some consumer advocates say the change would water down the rules that prevent payday loan operators and other predatory lenders from pushing high-interest loans on unwitting borrowers. "As a CDFI, Southern Bancorp focuses our efforts in [the] rural, low-income communities in which we see the devastating effects of predatory loans," said Southern Bancorp CEO Darrin Williams. "We support the original rule and encourage the CFPB to reconsider rescinding it so that families in Arkansas, Mississippi, and beyond can access credit responsibly."
Many cite regional inequality as the cause of many problems facing the United States. However, the problem may more accurately stem from inequality within, not between, each region. According to new findings pulling from Census data and extensive research, regional inequality contributes very little to total inequality. In other words, the differences between people within a city like Los Angeles are a lot sharper than the differences between residents of California and residents of Mississippi.