In February, 1994 six (6) financial institutions were invited to learn about, discuss, analyze, and determine their interest in investing in an alternative financing vehicle for affordable housing within Cameron County. Two (2) of the institutions were minority owned banks.
A series of meetings were held with the CEO's of each of the six (6) financial institutions. Education on community development corporations, their relation to the banking community, a review of bank regulatory conditions, areas of focus, community involvement, structuring, administration and operations, relation to ongoing community development activities, legal, and political considerations were analyzed and discussed. The six lenders also reviewed loan declinations made to small businesses by their commercial banks and identified the need for a flexible equity investment pool that could leverage more traditional lines of commercial credit.
A preliminary "Investment Proposal", as well as draft Articles of Incorporation, By-laws, and Administrative agreements were prepared based on the CEO's discussions. These were reviewed and revised over a four-month period.
Following the initial education, consultation, and discussion process, each of the institutions was invited to decide on participation in forming a multibank community development financial institution and their potential investment level. Five of the invited financial institutions pledged capital commitments totaling $1.2 million dollars. The Comptroller of the Currency and State of Texas banking regulators granted permission to invest for the four (4) federally chartered, and one (1) State of Texas chartered banks in April, 1995.
Initial capital was paid in April, 1995, and the first Board meeting was held in May, 1995. Initial investing stockholder banks were Mercantile Bank (now Wells Fargo), International Bank of Commerce-Brownsville, Brownsville National Bank (now BBVA), Texas Commerce Bank (now JPMorgan Chase), Bank of America, and the National Cooperative Bank of Washington, D.C. In March, 2001, the Corporation expanded its investment area to include Hidalgo, Starr, and Willacy Counties. Three new equity investors included Frost Bank, Lone Star National Bank, and International Bank of Commerce-McAllen. In 2015 International Bank of Commerce-Zapata purchased $100,000 stock; in 2017 The Community Development Corporation of Brownsville (now cdcb-come dream. come build) purchased $200,000 in stock and in 2019 Falcon Bank and Cameron County Housing Finance Corp. each purchased $100,000 of stock. In 2016 JPMorgan Chase sold their $300,000 initial stock purchased back to the RGVMB for $1.
In 1996, the RGVMB received certification as a Community Development Financial Institution (CDFI) from the United States Department of Treasury and is the largest CDFI operating on the Texas/Mexico border. The Corporation’s most recent recertification was received in 2020. The RGVMB became the first CDFI to become a member of the Federal Home Loan Bank of Dallas in 2013.
Current Financial Position
In 2009 the Rio Grande Valley Multibank had a hard decision to make, do we close our doors or do we expand into the marketplace with new and lofty goals to truly impact the Rio Grande Valley. We decided that the second option was the way to move. At that time the real estate market and national and local economies were at their lowest point, nevertheless, we saw an opportunity where we could make a difference in people’s lives and make the RGVMB successful.
In 2012 our total assets were just $7.6 million, equity stood at $2 million and mortgage loan portfolio was at $5.8 million and shrinking. In order to increase our financial strength, we set out to do two things that no other CDFI had yet perfected; join the Federal Home Loan Bank of Dallas and create a small dollar loan program to compete against high cost payday lenders in the RGV. Using these two strategies we grew Total Assets from $7.6M in 2012 to $14.6M by December, 2019. Grew the loan portfolio to $9 million and more than doubled equity to $4.6 million.