Uber’s $50 Million Pledge Adds to Push for Minority Lending

(Bloomberg) -- Uber Technologies Inc. will invest $50 million to support minority and underserved communities, part of a broader commitment from U.S. companies to address inequity in access to banking and loans.

Uber will earmark $25 million for the Keepers Fund, a vehicle sponsored by the National Bankers Association to support so-called minority depository institutions, and another $25 million in direct deposits with such entities, the company said Tuesday in a statement. 

Since the killing of George Floyd prompted widespread protests of systemic racism, Twitter Inc., Netflix Inc., Bank of America Corp., and several other consumer and finance companies have pledged more than $1 billion to support loans and financial institutions that serve Black and minority communities. They and most of the other largest U.S. companies have also committed to fund advocacy groups such as the National Urban League and NAACP Legal Defense Fund, as well as set hiring targets for minority executives and employees.

Even as fewer big banks serve local communities, the number of Black minority deposit institutions has been falling. The number of Black-owned MDIs or those controlled by Black directors fell to 20 in the second quarter of 2020, from 33 in 2010, according to data compiled by the Federal Deposit Insurance Corp., which certifies MDIs. As many as a quarter of Americans, many of them low income, have no bank account or rely on alternatives such as high-cost payday loans rather than traditional bank financing to pay bills, according to the FDIC.

The Keepers Fund will provide capital to MDIs to increase lending to lower- and middle-income individuals and communities. In addition to MDIs, companies including Goldman Sachs Group Inc. are supporting more than 1,100 Community Development Financial Institutions, which have a similar mandate.

The $50 million is in addition to $10 million Uber committed in July to support Black-owned businesses, as well as promises to double Black leadership in the company and spending with Black-owned suppliers. The company’s food-delivery service also waived fees for small and midsize Black-owned restaurants, which angered other restaurant owners who said the move put them at a pricing disadvantage. Uber said this week that it is continuing the fee-free delivery, despite receiving more than 8,500 complaints.

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