This issue, we’re highlighting how our members have been advancing racial equity, focusing on areas with longstanding disparities through substantial commitments and initiatives, and providing affordable homeownership options by financing sustainable housing units and grant programs.
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Kevin Fromer, President and CEO, Financial Services Forum
Penny For Your Thoughts
“We can’t let the urgency around racial equality and economic opportunity quiet down.” – Bank of America’s Racial Equality and Economic Opportunity Initiatives Executive, Ebony Thomas.
How is Bank of America working to advance racial equality and economic opportunity?
None of us could have anticipated the devastating health and social impacts of 2020. Racial injustice and the disproportionate impact that these health and humanitarian crises are having on communities of color created an urgency to do more, now. At Bank of America, we feel that urgency and have taken action.
Building on our longstanding focus of advancing racial equality and economic opportunity, in June 2020, we announced a $1 billion, 4-year initiative to create opportunity for people and communities of color—specifically focused on areas where systemic, long-term gaps have existed, including workforce development, healthcare, housing and small-business assistance. Since then, we’ve made significant progress deploying those funds and making sure we maintain a sense of urgency around these challenges. In March 2021, we increased our commitment to $1.25 billion over five years. This effort further accelerates work already underway to address racial equality and economic opportunity through direct actions, investments and work to catalyze similar efforts across the private sector.
How are the funds from Bank of America’s $1.25 billion commitment being deployed?
Our commitment is a mix of philanthropic and business opportunities, with the majority of funds being delivered at the local level. Already, we’ve allocated more than $350 million— or one-third of our initial $1 billion commitment—across 91 U.S. markets and globally.
This includes investing in jobs and skills training at 21 historically Black colleges and universities (HBCUs), Hispanic-serving institutions (HSIs) and community colleges; delivering more than 25 million masks and other personal protective equipment (PPE) to community partners across the U.S.; investing in 12 Minority Depository Institutions (MDIs) to help them grow and serve their communities; increasing our overall commitment to Community Development Financial Institutions (CDFIs) to $1.8 billion—making Bank of America the largest private sector CDFI funder; and committing to invest $200 million in private equity funds focused on minority entrepreneurs and predominantly led by diverse fund managers across the U.S. We have also committed an immediate $1 million in grants, and have taken related actions in support of increased advocacy, dialogue and engagement with the Asian American community.
How else do you plan to deploy your $1.25 billon commitment?
Our $1.25 billion commitment stretches over five years, so we still have a lot of work to do. We’ll continue to address the four pillars of jobs, healthcare, housing and small businesses that we set out to tackle with this commitment. A mantra we have here, which our CEO Brian Moynihan continues to reiterate, is that we can’t let the urgency around racial equality and economic opportunity quiet down. We will continue to focus day in and day out on building that into our business and the work we do in our communities.
Member program spotlight.
Community Homeownership Commitment & Affordable Housing
In February this year, Bank of America tripled its affordable homeownership initiative from $5 billion to $15 billion through 2025 to help 60,000 individuals and families purchase homes. This includes the BofA Down Payment Grant, available in more than 260 cities and counties and provides as much as $10,000 to assist with down payments, as well as America’s Home Grant, which is available in nearly 800 cities and counties and provides as much as $7,500 for closing costs such as title insurance and recording fees.
Recognizing the disparity in homeownership percentages among low- and moderate-income (LMI) individuals in communities of color, this Community Homeownership Commitment is designed to create more equitable access to affordable and sustainable homeownership within these communities. Since launching in 2019 as a $5 billion commitment, Bank of America’s affordable homeownership initiative has already helped more than 21,000 individuals and families purchase a home, and has provided $185 million in grants, with no repayment necessary.
Last year, through Bank of America Community Development Banking (CDB), the company also financed the development of more than 13,000 affordable housing units, including 1,650 units developed by minority and women-owned business enterprises. In 2020, CDB provided a record $5.9 billion in loans, tax credit equity investments, and other real estate development solutions to help build sustainable communities through affordable housing and economic development. These solutions help create affordable housing for individuals, families, seniors, students, veterans, the formerly homeless, and those with special needs.
Access to affordable housing is essential to increasing economic mobility and reducing inter-generational and childhood poverty, and is key pillar in Bank of America’s $1.25 billion, 5-year initiative. Homeownership has historically helped families create a legacy and build long-term wealth. Bank of America commitments in this area are among many demonstrations of the company’s work to address disparities in the communities it serves.
What we’re doing in Washington.
We supported the extension of the 2021 Paycheck Protection Program to give small business owners and banks time to address issues on outstanding applications with the government and to fully implement changes to the program made by the administration. Lawmakers authorized an extension until May 31, giving the Small Business Administration until June 30 to process loans.
Members of the Financial Services Forum have been strong partners of the PPP, facilitating $69 billion in loans to 848,696 small businesses in 2020. More than one-third of those loans were made to businesses in communities in which the majority of the people are minorities, and 91 percent of the PPP loans by Forum members last year were made to businesses with 20 or fewer employees. In addition, Forum members have extended significant support to Community Development Financial Institutions to support their PPP lending in traditionally underserved communities.
Our Two Cents
Research from the Forum.
The BankNotes Blog Spotlighted:
- Large dealers, such as Financial Services Forum Members, actively made markets and provided liquidity to their clients during the pandemic.
- Financial Services Forum members maintained significantly more capital than was needed to both sustain the severe economic shock contemplated in the December 2020 stress tests and continue supporting the economy.
- Large banks in the U.S. are subject to a stricter form of the GSIB surcharge relative to their foreign competitors. As a result, large U.S. banks face an unlevel playing field when competing against large foreign banks both at home and abroad.
Checking the Balance
Members in the News.
Building on Bank of America’s longstanding support for the Paris Climate Agreement and commitment to advancing the United Nations’ Sustainable Development Goals, the company has announced a goal of deploying and mobilizing $1 trillion by 2030 in its Environmental Business Initiative to accelerate the transition to a low-carbon, sustainable economy. This commitment will anchor a broader $1.5 trillion sustainable finance goal by both environmental transition and social inclusive development purposes, spanning business activities across the globe.
BNY Mellon announced a collaboration with the Yale Initiative on Sustainable Finance to address the challenges of integrating sustainability concerns into financial markets and investment decisions. BNY Mellon will support YISF’s ongoing research agenda that includes exploring the relationship between ESG metrics and financial performance, helping to solve issues with ESG data through investor grade ESG metrics. The bank also made a donation to support YISF’s research agenda.
Citi was recognized as the largest affordable housing lender in the country by Affordable Housing Finance Magazine in its annual survey. This is the eleventh consecutive year Citi has earned this distinction. Citi Community Capital, the bank unit through which Citi works to finance all types of affordable housing and community development projects, reported over $7 billion of lending to finance affordable rental housing projects in 2020.
Goldman Sachs announced an investment initiative, One Million Black Women, of more than $10 billion to advance racial equity and economic opportunity by investing in Black women. The bank will commit $10 billion in direct investment capital and $100 million in philanthropic capital over the next decade to address the dual disproportionate gender and racial biases that Black women have faced for generations, which have only been exacerbated by the pandemic.
JPMorgan Chase announced a $350 million, five-year global commitment to grow Black, Latinx, women-owned and other underserved small businesses, help address the racial wealth divide and create a more inclusive recovery from the COVID-19 pandemic. This commitment, which combines low-cost loans, equity investments and philanthropy, will help reduce barriers to capital for underserved small businesses to support their immediate needs and long-term growth.
Morgan Stanley Wealth Management has recognized the achievements of 18 outstanding professionals as part of its partnership with MAKERS – a project dedicated to identifying and celebrating women of accomplishment across multiple fields along with the men who sponsor and champion women’s achievement.
State Street announced its support and participation in the Management Leadership for Tomorrow’s (MLT) Black Equity at Work Certification, a results-driven certification program addressing the persistent inequities faced by Black professionals across corporate America. The Certification, which aligns with State Street’s 10 Actions to address racism and inequality in the workplace and its communities, provides a roadmap to enable employers to take a systematic, results-orientated approach to Black equity in the workforce.
Wells Fargo announced a major step by setting a goal of net zero greenhouse gas emissions — including its financed emissions — by 2050. The bank will measure and disclose financed emissions for select carbon-intensive portfolios; set interim emission reduction targets; deploy more capital to finance climate innovation; and continue to work with its clients on their own emissions reduction efforts. The company will also launch an Institute for Sustainable Finance to manage the deployment of $500 billion of financing to sustainable businesses and projects by 2030.