Community Development Banking News
CDFI Banking: Industry, Policy, and Beyond.
"Former US President Donald Trump's victory and anticipated Republican control of the Senate and possibly the House should lead to a shakeup of some key legislative and regulatory positions affecting the bank sector.
Financial stock investors seemed pleased overall the day after Election Day, as the KBW Nasdaq Bank index closed up 10.69%, while the S&P 500 closed up 2.53%. The bounce was driven by expectations for regulatory relief.
'In general, we expect aggressive actions by the next group of financial regulators, who will feel emboldened to undo many Biden-era rules,' Ian Katz, managing director at Capital Alpha Partners LLC, wrote in a note on Nov. 6."
"Today, I'm excited to speak with Brian Argrett, Chair of the Board Directors and President and CEO of Broadway Financial Corporation and its banking subsidiary City First Bank, the largest Black-led minority depository institution (MDI) in the nation.
Impact investing is an increasingly important topic for enterprise families and family offices. Our conversation today focuses on a truly unique and attractive avenue for positive impact available to enterprise families and family offices, which is made possible thanks to the Advancing Communities Together Deposit Program, or ACT – an innovative program that provides an easy and fully insured way for family offices to invest their excess cash directly in the financial institutions dedicated to lifting up communities in need."
"The Bank Policy Institute, the Kentucky Bankers Association and a community bank in Lexington, Kentucky, filed a lawsuit late Tuesday against the Consumer Financial Protection Bureau and Director Rohit Chopra, challenging the agency's open banking rule.
The 56-page lawsuit, which was filed on the same day that the CFPB released its final rule on open banking, alleges that the bureau exceeded its statutory authority. The lawsuit also claims the CFPB is jeopardizing the safety and soundness of the banking system by limiting banks' discretion to deny third parties access to sensitive financial information."
The following are remarks on entrepreneurship from Lisa. D Cook of the Board of Governors of the Federal Reserve System at the 2024 Women for Women Summit in Charleston, South Carolina:
"Today I would like to talk with you about the important role startups, new businesses, and entrepreneurship play in our economy from the perspective of a Federal Reserve policymaker. I also want to share a bit of my story. Just like many of you—including those who have started a business or those who dream of doing that someday—I have faced and overcome hurdles along a winding path."
"We need more housing supply in America. It is the most important thing we can do to lower the cost of housing. It is true that accomplishing this goal is going to take more than federal money; it is also going to require state and local governments to put in place reforms that make it easier to build housing. But we should not underestimate the important role federal dollars can play buying down the cost of capital as well as creating incentives for local and state governments to support housing construction."
"A new working paper by FinRegLab sheds light on efforts to scale the impact of mission-based lenders on small business lending markets. 'Transforming Small Business Credit: Technology and Data Adoption in Mission-Based Lending' dives into the adoption of technology and data in mission-based lending by community development financial institutions (CDFIs) and minority depository institutions (MDIs). Findings were derived from the experiences of five lenders that FinRegLab is studying as they pilot new lending innovations–Allies for Community Business, Ascendus, LiftFund, Ponce Bank, and Texas National Bank–as well as dozens of interviews with other mission-based lenders, intermediaries, vendors, and other stakeholders in the financial services, technology, and civil society sectors."
"The rule will be implemented in phases, with larger providers subject to the rule sooner than smaller ones. Financial firms will be required to comply based on their size; the largest institutions will have to comply by April 1, 2026, while the smallest covered institutions will have until April 1, 2030. Certain small banks and credit unions (those with assets below $850 million) are not subject to the rule."
"Bankers also are concerned that fintechs will use venture capital funding to subsidize lower rates on loans and other products while sending marketing blitzes to steal customers from big banks. Fintechs promise a wide range of financial benefits to low- and moderate-income consumers that bankers say may or may not be real . . . The rule will initially impact the largest banks that for now have just six months to comply. The timeline of staggered four-year compliance dates depending on a bank's size could change in the final rule, some experts say."
"In Congress' last action before Election Day, the Senate cleared a stopgap funding bill Wednesday night that heads off a government shutdown next week, bucking the demands of former President Donald Trump.
President Joe Biden is expected to quickly sign the measure, preventing a funding lapse Tuesday and delaying the government shutdown deadline to Dec. 20. It also punts a potentially bitter funding fight to just before Christmas, with the results hinging on the November elections and which party wins control of the House, Senate and White House."
- Final guidance maintains enhanced scrutiny for:
- Transactions involving nonbanks.
- Pro forma institutions with over $100 billion in assets.
- Institutions with adverse Community Reinvestment Act (CRA) ratings.
- Changes from the proposal include:
- Removal of a statement under the financial resources factor to prevent misinterpretation that a strong IDI would be unable to absorb a weaker one.
- New language clarifying that a merger must reduce financial risk to receive a favorable assessment.
- Slight modifications were made to the convenience and needs factor:
- The final guidance emphasizes that a merger should enable the resulting IDI to better serve the community.
- Clarification on public statements about withdrawn applications:
- FDIC Board retains the discretion to issue public statements on withdrawn applications to promote transparency, but such statements are rare and will comply with confidentiality laws.
- Opposition from FDIC Board members:
- Vice Chairman Travis Hill and Director Jonathan McKernan voted against the final policy, with Hill expressing concerns that the proposal went in the wrong direction.