Tuesday, August 26, 2008
"WASHINGTON — The Office of the Comptroller of the Currency (OCC) issued a banking bulletin on an interim final rule to implement the changes to national banks’ public welfare investment authority enacted in the Housing and Economic Recovery Act of 2008 (HERA), which the President signed into law on July 30, 2008."
Public welfare investments are investments that promote the public welfare. (Sorry to be circular, but it is what it is.) These are investments that primarily benefit low and moderate income individuals, low and moderate income areas, or other areas targeted for redevelopment. They include debt or equity investments that finance small businesses, provide credit counseling, job training, community development research. We believe the law and resulting regulation timely.
The OCC goes on to state that "This provision in HERA restored national banks’ full authority to make investments designed primarily to promote the public welfare, including in low- and moderate-income communities, communities affected by
foreclosures and targeted for revitalization, designated disaster areas, and underserved rural communities. The OCC recognized the need to implement this provision promptly.
Although there is a 30-day public comment period, the interim final rule became effective on August 11 when it was published in the Federal Register. The comment period closes on September 10, 2008."
Monday, August 25, 2008
Construction Bank, which on Friday posted a 71 percent jump in first-half net income to 58.7 billion yuan ($8.6 billion), said growth in lending would be driven in part by loans to small and medium-sized enterprises and agricultural businesses."
We have created a set of reports covering the financial and social performance of the top five Chinese banks.
Thursday, August 21, 2008
According to the Wall Street Journal, “Andrew Bischel believes green-minded, socially conscious investors don't have to sacrifice returns to have a portfolio they feel good about.”
“‘There's a belief that the effect of shrinking the universe through constraints either causes you to lose return opportunities or it increases volatility because you don't have diversification,’ Mr. Bischel says. ‘We believe we know how to manage within a constrained universe. It is true that good companies can be good stock -- they perform well over the long term because they are less likely to have disasters down the road.’”
“Socially responsible funds came into vogue and prospered through the 1990s, but not necessarily because they were well-managed, Mr. Bischel says. For the most part, such funds were heavily weighted in the then-booming technology and telecommunications sectors because those companies had a sterling reputation among the social-responsibility crowd. When the bubble burst on tech stocks, those funds sank with them.”
“Just 55 per cent of large UK charities had an ethical investment policy in 2006, and charities risk their reputations and income if they do not make investments which are conducive with their objectives.”
“Many charities are concerned that the credit crunch will have an adverse affect on their income, both from monetary gifts and in the form of donated goods to sell in their shops; thus it is more important than ever for charities to insure that they do not jeopardise income by going against the principal foundations of the organisation, the EIRS said.”
Sunrise Community Banks To Offer Remote Deposit Capture Service From Kodak And CFC Technology To Business Customers
“EZ Deposit stands for ‘energy efficient and zero waste,’ which complements Sunrise Community Banks' socially responsible business model.”
“‘Collectively, we're recognized as ‘Minnesota's Socially Responsible Banks®,’ having demonstrated our ability to make a difference in our urban communities,’ said David Reiling, CEO, Sunrise Community Banks. ‘Our Socially Responsible Deposit Fund allows depositors to dedicate funds to be targeted toward affordable housing projects, small business and community investment programs in low and moderate income areas of the Twin Cities.’”
Wednesday, August 20, 2008
Freddie and Fannie became arrogant, in that way that says: we know more that you do, we know more that you ever will, we are smarter, better paid and better looking than you. They were right, for a time. But time always runs out.
They were "socially responsible" companies of long standing, the originals, immune to either criticism or improvement. Their attitude, financial and reputational strength gave them great power, power they misused.
Deregulation supported them on the upside and failed them on the downside. They should have stopped abusive home mortgage market lending practices, as we suggested in 1995 and 2001, but found themselves turning up the heat on a housing market mania that required fraudulent practices. Generating income and increasing "shareholder value," became the order of the day. Managers at Freddie and Fannie were caught up, too. They wanted their share of the American Pie, even if that meant turning the oven up way too high. GSE managers stopped being anything other than greedy. Of course, anything smacking of long term social concern was driven out, also.
With no regulators to fear, with little competition, operating within a maniacal market that forgave all sins (except missing earnings estimates), they forgot their role in setting ethical home mortgage market lending standards.
Ironically, other, more powerful and greedier groups were angling for profit. A new set of players stood at the ready. Hedge funds, eying $5 trillion dollars of potentially distressed MBS and other debt, operating in the dark, took advantage of a lack of both GSE oversight and hedge fund regulation. Enjoying freedom from concern about society, and able to use fraudulent and unethical business practices, hedge funds may drive the companies into bankruptcy. Once there, Funds would have a field day, buying GSE debt and MBS securities for pennies on the dollar, waiting for the housing market to rebound, earning 2 and 20, easily.
Yet and still, we believe in the social mission these companies set out to achieve. The bottom line: Socially Responsible Investors might consider buying Freddie and Fannie stock at these levels.
Friday, August 15, 2008
"Salt Lake City-based Zions' Bancorporation..closed down 14.3%, becoming the top loser among financials after a rapid tumble.. The fall in the bank's share price comes after Moody's Investors Service said it was reviewing the company for a downgrade.
Wachovia reported a second-quarter loss of $9.11 billion, or $4.31 a share, last month. Wachovia ended 12% lower as traders beat down the stock on news that the bank is revising lower its second-quarter loss by $500 million pretax. This was to reflect a hit it is likely to take from settlement discussions with regulators of investigations relating to auction-rate securities."
Thus, small, minority banks will, we believe, outperform their larger, non-minority counterparts for the balance of the year.
At Carver, net interest income declined by $400,000, and non-interest expense climbed by $800,000. Non interest income increased by $600,000, and the bank generated an income tax benefit totaling $500,000.
One worrying sign: Carver increased provision for loan losses - non-performing loans at the bank increased. And bank assets fell to $788.7 million, driven lower by declines in cash and cash equivalents.
Carver Bancorp is the holding company for Carver Federal Savings Bank, the largest African American run bank in the United States.
Thursday, August 14, 2008
According to CityWire.co.uk, “While some advisers may still be warming up to the idea of ethical or socially responsible investment (SRI), research shows clients are increasingly demanding it. But despite what some may fear, investing in line with a client’s principles does not have to mean the death of decent returns, particularly if advisers choose funds with care.”
“Research released by the Association of Independent Financial Advisers in May revealed that close to a quarter of advisers saw increased consumer interest in ethical investments last year. Meanwhile, figures from Ethical Investment Research Services (Eiris) show that as of December 2007, there were nearly 100 green and ethical retail funds available in the UK with investment at a record £8.9 billion.”
“Eiris head of responsible investment development Stephen Hine said experience shows that over an extended period, ethical, SRI and sustainable funds can perform as well, if not slightly better, than their non-ethical, non-green peers.”
Thursday, August 7, 2008
"Green" Sections removed from the Housing Bill, replaced with the "Green Act of 2008" (Amy Rosenthal)
All is not quiet on the clean energy front, however. While the housing bill might serve as a setback, another bill titled the GREEN Act of 2008, sponsored by Colorado Representative Ed Perlmutter and 41 other co-sponsors, focuses on providing incentives to green building. This bill includes an overhaul of the current energy efficient mortgage process to help provide oversight for the current program, as well as expand it. The bill also expands regulations on energy efficiency in building, and provides community reinvestment aid for supporting energy efficient housing.
Wednesday, August 6, 2008
Interested parties must register to be considered. Logon to:
www.mbecapitalcall.com today to register.
James R Taylor, Director
VHCDC-MBE Capital Connect™
Tuesday, August 5, 2008
“Christian W. Magoon, President and Senior Managing Director of Claymore Securities, told SocialFunds.com, ‘Water is the only commodity for which there is no replacement. Can we replace oil? Yes. Oil we can replace. Same with lumber or soybeans. There is only so much water on earth, but the demand for water itself is not affected by inflation or tax rates,’ Magoon said.”
“Water companies span a wide range of sectors and industries including infrastructure, utility, clean water production, efficiency, filtration, purification, monitoring, waste water treatment and pollution control. Sectors that can have a significant impact on water include chemical, steel, manufacturing, and agriculture.”
Monday, August 4, 2008
According to GuruFocus.com, “More environmentally-conscious Canadians are looking at socially-responsible mutual funds as a way to invest using a "green" approach.”
“There are now almost 50 SRI mutual funds and ETFs available in Canada and the major players are starting to realize that there is something happening that merits their attention. Within the past year, three of the big bank fund groups have launched SRI entries. Last July, RBC created the RBC Jantzi Balanced Fund, RBC Jantzi Canadian Equity Fund, and RBC Jantzi Global Equity Fund. Two months later, we got the TD Global Sustainability Fund and in February of this year the Scotia Global Climate Change Fund appeared. If you sense a trend here, you're right.”
“Portsmouth, N.H.-based Pax, a pioneer in the growing socially responsible investing niche, agreed to pay the penalty to resolve civil charges announced Wednesday by the Securities and Exchange Commission.”
“Pax said the portfolio managers that had overseen the two funds at which the SEC found violations are no longer employed by Pax. The firm's head of social research at the time of the failures also has left, along with the chief compliance officer.”
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