The departure of a senior C-level official at Pacific Capital prompts speculation that the bank is on the verge of a shake-up.  Stephen Masterson, who serves as both Chief Financial Officer and Chief Operating Officer, announced on Friday last week that he will resign, effective March 12, 2010.

Masterson’s replacement was not named.

Pacific Capital has been the subject of some internet rumors that suggest it might be acquired by a number of West Coast banks. Pacific Capital has some valuable branches and a long-standing role in its local communties. In that scenario, Pacific Capital’s shareholders would see some value for their existing shares.

Another possibility is that the FDIC might seize the assets of PCBC. Shareholders would be out of luck.  Indeed, (more…)

The inability of retrained workers to make good on their student loans is a problem that should trouble anyone who has faith in the current wisdom surrounding how we tell people to get back on their feet.

It is boilerplate policy for any workforce development plan to funnel laid-off workers into job training classes.  The routine is a familiar one: the factory shuts down, the mill closes, or the branch plant moves on, but the worker remains.  All too often, the problem lies not with the worker but with a job function that is no longer viable in a global economy.  State policy often sees to it that these workers can get help paying for their new career training. Here are sum links to various iterations of the retraining idea in Washington state,  North Carolina, and Michigan.

All of this retraining requires a lot of classrooms.  It is hard to find space to build new classrooms on many of our existing state university campuses.  Maybe they are so full because they had to make room for more labs for technology transfer research, or for football game parking.  Whatever the reason, a great share of this retraining is taking place at community colleges and at private (“proprietary”) for-profit universities.

The largest universities in the United States are not Michigan, Minnesota, or Arizona State.  They are the University of Phoenix and DeVry University.  More than 100,000 students finished coursework at the University of Phoenix in 2007 alone.

These schools play an outsized role in educating our workforce. The private model works because it understands the needs of these laid-off workers.

DeVry and the University of Phoenix are both private, for-profit universities.  They have witnessed significant increases in demand for their courses as more workers are displaced by globalization. They have met that (more…)

I made a map that compares the number of tax filers who used a refund anticipation loan with the number of tax filers who made an IRA contribution, on a county level, for North Carolina in 2006.

It is possible that a filer might do both.  I cannot account for a double counting. I do not think that there were many instances of double counting, though.  That is due to the nature of who gets a RAL.  RALs (refund anticipation loans) generally go to filers who have very little in the way of liquid assets.  They are not the kind of people who can afford to put money away for forty years.  Heck, their decision to use a RAL tells us that they can’t even wait 9 days to use their money.

The two smaller maps, in the insets, show the distribution of poverty and wage income.  Poverty is on the left, wage income on the right.  The poverty map counts the percent of households in poverty.  The wage income map shows the percentage of households with wage income.

A glance at the maps would seem to say that there is a much closer correlation between poverty and RAL use than between wage income and RAL use. That makes sense, although it is not a slam dunk – most RAL filers do have jobs because most RAL filers are getting the earned income tax credit.  In North Carolina, about 40 percent of EITC recipients get a RAL, and another 20 percent get a refund anticipation check (RAC).  There are fees for both, although the RAL fees are much higher.

This map shows the dynamics of our economy.  In a large section of eastern North Carolina, many people are living on the margins. They are not saving for the future.  They can’t save for 9 days.  The rest of the state is hardly better. Most of this map is pink or red – meaning that fewer people are getting ahead than are trying to catch up.  The grey areas show were family finances in order.  These, for the most part, are the growth areas in the new North Carolina along I-85.  There is also a concentration of wealth building in some of the areas that have attracted many retirees.

How do these folks bank?

• 
• Mobile banking?
• Internet banking?
• ATM/point of purchase banking
• Branch banking?

OK…ha ha.  But there is a point…as our banking system is duplicated in other countries, what assumptions about US banking are relevant, and what notions should be dropped?

I believe that mobile banking is the way of the future.  Already, mobile banking is the preferred mode of banking for new customers in India and China.

The Indian experiment

India is a developing country, but it is one that is rapidly adding to its currency reserves.  India remains a country with too much of its population living in villages.  The village in India is a bit like the family farm in (more…)

CRA-NC is meeting with BB&T CEO Kelly King and a group of other senior staff today.  We will be discussing their participation in community lending.

BB&T is a rare bank these days.  They have actually increased their small business lending in the last year.

Their mortgage lending is up, too.  They made about $10.4 billion in mortgage loans in 2007, but $11.8 billion in 2008.  They have increased their mortgage lending in low income census tracts, to more than $1.5 billion, and their mortgage lending to low-income borrowers to just over $1.07 billion.

BB&T is still weak in a few markets.  They don’t make enough loans in Jacksonville (NC).  Oddly, they seem to struggle in Charlotte.

Any questions, please ask…