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Council places $2 million with Neighborhood National Bank to support local lending
Summary
Council approved placing $2,000,000 in CDARS CDs at Neighborhood National Bank (a certified community development financial institution) to keep city deposits local and help seed lending for small businesses and low‑ and moderate‑income borrowers; staff noted slightly lower yields than county pool but cited community reinvestment benefits.
The council voted unanimously to authorize a $2 million placement with Neighborhood National Bank, a Community Development Financial Institution (CDFI) that is relocating its headquarters to National City. Staff presented the placement as an eligible investment under the city’s policy (CDARS product) and said the city would accept a modestly lower yield in exchange for local lending benefits and community reinvestment.
Scott Andrews, CEO of Neighborhood National Bank, described the bank as mission‑driven and said the bank will deploy the deposits into local loans and community investments. Finance staff and the bank presented indicative yields and said the difference versus county investment pool returns was small; councilmembers asked staff to follow procurement and ethics checks required under the city investment policy.
Action taken: Council authorized the CD placement with Neighborhood National Bank; staff will follow investment‑policy due diligence and report any conflicts or needed disclosures.
Notes: Council emphasized the local economic development and community‑banking benefits; staff cited a mid‑3% range for the CD yield vs. higher pooled yields but noted the placement is a small portion of the overall portfolio.
