This Week in ESG and Impact Investing

According to Black Enterprise Magazine , "Liberty Bank (No. 5 on the BE 100s bank list with $373 million in assets) has assumed all of the $13.5 million retail deposits of Home Federal Savings Bank and has purchased approximately $14.9 million of its assets. Home Federal, which was founded in May 1947, was 'critically undercapitalized and in an unsafe and unsound condition to transact business,' according to the OTS. Its two branches and eight employees reopened under the Liberty Bank and Trust Company banner on Monday. Liberty Bank was founded in 1972 and has expanded into seven metropolitan areas and six states while offering banking services and mortgage lending. 'The expansion of our banking network to Detroit is a significant benchmark in our development. We want to broaden our reach and provide our services to a larger audience,' said Alden J. McDonald Jr., Liberty Bank and Trust Company’s president and CEO, in a news release. 'This acquisition is anothe...

On Friday, November 6, 2009, state and federal regulators closed several minority banks, reducing the total number of minority owned banks in the US to 236 from 239. According to Marketwatch.com, "The failed institutions included (Asian-owned) United Commercial Bank of San Francisco, the main subsidiary of UCBH Holdings. The bank had $11.2 billion in total assets and was the seventh largest failure during the 2008-2009 crisis. The FDIC was appointed receiver and sold the failed bank's deposits and $10.2 billion of its assets to East West Bank of Pasadena, Calif., which also has operations in China and is a subsidiary of East West Bancorp. The Office of Thrift Supervision shut down (Black-owned) Home Federal Savings Bank of Detroit and appointed the FDIC receiver. The FDIC arranged for Liberty Bank and Trust of New Orleans to assume the failed thrift's deposits and its $14.9 million in total assets. The Missouri Division of Finance took over (Black-owned) Gateway Bank of St...

According to The Hill , "Now we learn that while many kids, hospitals and pregnant women cannot get enough of the swine flu vaccine, the major banks and Wall Street firms were given a private allocation. At best, this is a ridiculous distribution strategy; at worst, these firms gave some vaccines not to high-risk people but to high-profit traders and senior managers." And you were wondering where your $700 billion went. Pitchforks, anyone?

According to the Responsible Investor and SEC websites, in a major policy reversal, "the Securities and Exchange Commission (SEC) (will) allow shareholder resolutions (concerning) companies’ environmental and social risks.. Similar resolutions had previously been blocked under policies dating back to the Bush administration. The move was unveiled in new guidance by the SEC’s Division of Corporation Finance under new director Meredith Cross. As a result, companies will no longer be able to automatically exclude resolutions seeking information on the risks of environmental, human rights and other social issues." Shareholder resolutions are now sure to include executive compensation, community development, diversity, gender, SRI, ESG and CSR issues. See: http://www.sec.gov/interps/legal/cfslb14e.htm

According to the New York Times, "A Swiss investment company plans to raise awareness about the shortage of women on corporate boards around the world, and generate returns for its investors in the process. Naissance Capital, based in Zurich, is to start the Women’s Leadership Fund in January, which will invest exclusively in companies whose boards include women, or take minority stakes in companies that do not 'understand the need for greater female representation' and use it as leverage to push through changes. R. James Breiding, a co-founder of Naissance Capital and a former director of Rothschild Corporate Finance, said the fund was created after several studies showed a correlation between the number of female directors and a company’s performance. 'We feel companies that select and recruit people on merit should do better,' Mr. Breiding said. 'Having greater diversity and independence of opinions helps.' The fund’s board includes Kim Campbell, the for...

On Sept 10th, the US Senate Committee on Banking, Housing, and Urban Affairs held a hearing on Oversight of the SEC’s Failure to Identify the Bernard L. Madoff Ponzi Scheme and How to Improve SEC Performance. Testifying were H. David Kotz, Esq. - Inspector General SEC, Harry Markopolos- Chartered Financial Analyst and Certified Fraud Examiner, Robert Khuzami, Esq - Division of Enforcement SEC, John Walsh, Esq - Office of Compliance Inspections and Examinations SEC The testimony is summarized below and copies of the written statements are available at; http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=7b38b6a3-f381-4673-b12c-f9e4037b0a3f Madoff's alleged Ponzi scheme is the biggest fraud held by a person in the US history. By definition, a Ponzi scheme is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned. Although investo...

According to the New York Times , "The Federal Insurance Deposit Corporation imposed(new rules governing investments by) private equity firms seeking to buy failed institutions, although they eased more onerous proposals in hopes of luring them to the table." The new rules are designed to address concerns that "private equity buyers might engage in aggressive practices that could put its deposit insurance fund at risk." "The rules..require private equity-controlled banks to pour enough capital into a failed bank so that it has a cushion of at least 10 percent of its assets for three years. The F.D.I.C. dropped a requirement that private equity firms supply additional capital in the event of a severe downturn, required private equity firms not sell an acquired bank for at least three years, imposed restrictions barring the acquired bank from lending to companies affiliated with the private equity buyer, and exempted private equity firms from complying with the h...