News
Urban Partnership Bank of Chicago is in discussions with the FDIC on a buyout of two agreements under which the agency shares losses on hundreds of millions of old ShoreBank loans still on UPB's books, according to sources familiar with the matter. Urban Partnership hopes the buyout will allow it to secure enough cash to shore up its capital base. When the FDIC seized ShoreBank and transferred its assets and deposits to newly created Urban Partnership in 2010, the agency agreed to share losses on ShoreBank's commercial and residential loans, an arrangement scheduled to expire Sept. 30 exposing the bank to full future losses. Urban Partnership still has well over $300 million in loans covered by the FDIC agreements.
A new profile of The Bank of Kilmichael tells how a family owned community bank is bringing tailored financial services to small towns in Mississippi. The Bank of Kilmichael was formed in 1904 and has been in the hands of the Mortimer family for four generations. It is the kind of Southern hospitality bank where employees know their customers by name. “The bank’s employees have remained loyal to that friendly customer service,” said Buddy Mortimer, president and CEO of the bank. “As a certified CDFI, we have demonstrated a track record of effectively serving these un-banked areas with loan and deposit services.” Bank of Kilmichael intends to expand to a fourth branch in Eupora, Mississippi later this month.
CDBA member Virginia Community Capital seeks a community programs and impact manager to oversee the implementation, management and supervision of the bank’s advisory services and community programs. This position works to identify, build and implement programs to support VCC’s mission based lending. Among other duties, this person also manages research projects evaluating VCC’s community impact.
National Community Investment Fund (NCIF) has opened registration for the 2015 NCIF Development Banking Conference to be held November 19 and 20 in Chicago, Illinois. The conference will bring together representatives of mission based banks, involved regulators and interested investors. The topic of this year's conference is "The Impact We Make" and will revolve around defining the future of the mission-oriented banking industry, reimagining business models, social impact metrics and innovative strategies for success. Register for the conference here.
Housing mobility, the idea of moving poor families into wealthier neighborhoods where they have access to better schools and services, has been gaining traction in recent weeks. The Supreme Court upheld a decision that forced the state of Texas to shift the construction of affordable housing to areas where little such housing exists. President Obama released a new rule for the way HUD distributes housing money, requiring regions to more carefully integrate their housing stock. But housing integration has downsides. Building new affordable housing in wealthy areas takes investment away from the downtrodden areas that most need it. Moving poor children to better schools can help those individual students, but does nothing to improve the sub-par schools they left behind.
A federal judge has overturned a New York City law that required banks to disclose their investments in local communities. The law was designed to pressure banks by asking for data relating to small-business lending, efforts to prevent foreclosures, affordable housing lending and branches in low-income communities – requirements that went beyond the Community Reinvestment Act. The law applied to 21 banks eligible to hold the city’s municipal deposits. The New York City Banking Commission considered the information when deciding where to park deposits, incenting banks to invest more in underserved neighborhoods. U.S. District Judge Katherine Failla said the act was impermissible as it “[secured] compliance through public shaming of banks.”
The CDFI Fund will co-host a webinar discussing how CDFIs can engage in the emerging field of Pay for Success programs on August 13, 2015 at 4:00 PM EST. Pay for Success programs aim to address social issues such as homelessness, recidivism and educational disparities. Through the Pay for Success platform, private investors such as CDFIs, commercial investors or individuals pay up-front for social services. The government pays investors a return if and only if these services deliver their intended results. Advance registration for the webinar must be completed by August 11. Register for the webinar here.
New York City's Carver Federal Savings Bank highlighted its efforts to expand wealth enhancement opportunities in low income communities in its 2014 Annual Report. Carver is the largest African-American bank in the country. The bank expanded lending in 2014, with an overall 5% growth in loans to $410 million. Carver has helped create 2,597 jobs using $149 million in New Markets Tax Credit allocations. The bank has focused on providing financial services to those who need it most with 90% of loan originators within Carver’s assessment area and a $3.34 million lending total for Minority and Women Business Enterprise.
A CFPB report finds that consumers who closed their mortgage using electronic platforms (eClosing) not only found the electronic process more efficient, but also were better educated about their mortgages than borrowers who used paper forms. The report shows that the electronic tools accessible in the eClosing process have the potential to educate consumers and give them more time to review their documents, resulting in increased comprehension of the mortgage product. The report found that eClosing had a particular advantage over paper forms in providing early document review and integrating educational materials, two key goals of the CFPB's Know Before You Owe mortgage disclosure rule, which will take effect in October.
Finance and Thrift Company of Porterville, California and fellow CDFI bank Pan American Bank of Los Angeles have announced the completion of their merger in an all stock transaction. The combined entity will operate under the Pan American name and be headquartered in Los Angeles. The merger will create a bank with total assets of $155.2 million and total capital of $36.9 million. The bank will maintain a fully bilingual staff and operate six branch offices in Southern California. “The new Pan American Bank reflects our continued commitment to building value for our shareholders and to expanding our services—both in product offerings and locations,” said Robert Hughes, CEO of the combined organization.