News
The MS Economic Council published an article highlighting the seven CDBA member banks who received CDFI Program awards last week, as well as the role of CDBA as a trade association for community development banks.
This article from Next City features CDBA’s position on Section 1071 of the Dodd-Frank Act, which gives federal regulators the authority to collect and disseminate specific information with regard to small business lending from banks. “CDBA recommends that the CFPB keep Section 1071 simple and streamlined,” CDBA said in a letter to CFPB. “CFPB should only ask for data that is mandated by Congress or critical to fulfillment of its statute. Every data point collected for every customer is a real cost.” A quote from CDBA CEO Jeannine Jacokes is included.
Virginia Community Capital has surpassed the $1 billion mark in total project impact. The threshold is based on a calculation that for every dollar it lends to a project, an additional $1.44, on average, is leveraged from public and private sector resources and social investors. The project that enabled VCC to hit this milestone is a 240-unit affordable senior apartment community under development in Reston, VA. VCC provided a $1 million pre-development loan for the project.
The CDFI Fund awarded $24.3 million to 27 community development banks through its CDFI Program Awards. These banks will invest the awards in distressed communities to support small business lending and promote affordable housing, neighborhood revitalization, and expansion into new geographic markets. “The CDFI banks recognized today by the Treasury Department are economic engines, working to fight poverty and create opportunity in the places that are struggling with growing income inequality,” said Jeannine Jacokes, Chief Executive Officer of the Community Development Bankers Association. “These banks are part of the solution. We need mission-focused banks like these, and more resources to support the communities."
On September 19, the Treasury Department’s CDFI Fund announced $24.3 million in CDFI Program Awards to a record-breaking 27 banks, including 22 CDBA member banks! Among recipient states, Mississippi received the highest proportion of funds nationwide, with Arkansas ranking second and Louisiana third.
According to a massive new dataset compiled by researchers at the Urban Institute, there are many financially-neglected areas that CDFIs have yet to reach. The study found that CDFIs lent over $34.3 billion between 2011 and 2015, and 64% of this lending went to census tracts with one or more indicators of being underserved or distressed. However, CDFI activity was not distributed equally across the country, even among economically comparable places. In order to expand, the sector needs additional support mechanisms.
Chicago is entrusting $20 million to the last black-owned bank in the city, Illinois Service Federal Savings and Loan Association, thereby bolstering a lender that began in the Great Depression as officials join a nationwide movement to steer idle funds to underserved communities. “If we’re going to be serious about supporting those communities and community banks and what they do for small business, we have to look for opportunities like this,” said city treasurer Kurt Summers.
Bob Jones, president and CEO of United Bank in Atmore, Alabama, has been appointed by President Trump to serve a four-year term as a member of the US Treasury Department’s Community Development Advisory Board as the representative of insured depository institutions. The board advises the director of the CDFI Fund on policies regarding the activities of the fund.
The traditional narrative about banks and FinTech startups is one of rivalry between old and new. However, the teams at FinTech startup LendUp and Beneficial State Bank in Oakland think very differently about the relationship. LendUp CEO Sasha Orloff and Beneficial State Bank Co-CEO Kat Taylor said that banks and FinTechs need each other, and a very large segment of the population living on the margins of financial services in the US need these two groups to work together as well.
The FDIC and two other federal bank regulators have proposed revising certain definitions in Community Reinvestment Act rules to be consistent with new Home Mortgage Disclosure Act requirements. Under the proposal, terms such as “home mortgage loan” and “consumer loan” would be updated.