Bank of America Says Its Support for Minority Lenders Exceeds $2 Billion
Bank of America Says Its Support for Minority Lenders Exceeds $2 Billion
(Bloomberg) -- Bank of America Corp. said its portfolio of loans, deposits and equity investments benefiting minority-focused lenders has grown past $2 billion.
The total included $100 million in deposits and $36 million of equity in minority depository institutions, or MDIs, Bank of America said Tuesday in a statement. The bank said its investments to community development financial institutions are part of a broader effort to support small businesses and underserved clients.
“Our work with CDFIs is crucial to our ability to provide access to capital for thousands of individuals and small businesses who are the backbone of our local communities” Chief Executive Officer Brian Moynihan said in the statement. The Charlotte, North Carolina-based company said it provides capital to more than 250 CDFIs across every U.S. state.
U.S. banks have long been accused of contributing to race-based inequalities through exclusionary policies. And lenders have been pushed to do more to work with minority-run firms since last year’s murder of George Floyd by a police officer in Minneapolis. Banks have responded by boosting community lending, taking stakes in lenders with diverse leadership and seeking to broaden their own workforces.
CDFIs provide loans and other assistance to low-income and otherwise underserved communities. Bank of America supports the organizations through funding including access to Paycheck Protection Program loans, and is one of the largest private investors in those firms.
In response to increased demand for small-business support during the height of the pandemic last year, Bank of America committed $250 million in new capital to CDFIs. It has also pledged to spend $1.25 billion over five years to support racial equity.
“We are focused on providing capital in areas where opportunity gaps exist, and CDFIs are able to provide relief and make a real impact -- quickly responding and adapting to deploy capital and hands-on guidance when small businesses need it most,” Moynihan said.
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