The technology giant Apple has begun deploying $25 million of deposits at minority-owned banks, community development financial institutions and other mission-focused lenders.
To spread the funds among various U.S. depository institutions, the iPhone maker is partnering with CNote, an Oakland, California-based fintech firm. CNote operates a platform through which corporations and other institutional investors can place their deposits into historically underserved communities and generate returns.
Apple’s deposits are part of a $100 million commitment to combat systemic racism. The Cupertino, California, company announced a “racial equity and justice initiative” in June 2020 after the murder of George Floyd.
CNote has already distributed some Apple deposits to 12 minority-owned banks, CDFIs and low-income designated credit unions, including Bank of Cherokee County in Hulbert, Oklahoma; Carver State Bank in Savannah, Georgia; and Hope Credit Union in Jackson, Mississippi.
“Corporations have an enormous opportunity to help communities across the U.S. thrive by changing the way they manage their cash reserves, and we’re excited to see Apple at the forefront of this emerging trend,” CNote Chief Executive Catherine Berman said in a press release.
CNote would not say how much of Apple’s $25 million commitment it has distributed, or how much in total deposits it has placed so far through its platform. A CNote spokesperson said in an email that the company is “well underway in deploying Apple’s commitment.”
Apple is one of five major corporations using CNote’s platform to invest deposits at scale in fixed income and time deposit products in an effort to close the racial wealth gap. The fintech company has similar partnerships with Mastercard, Netflix, Patagonia and PayPal Holdings.
Recipients of the deposits are selected based on their ability to “put deposits to work right away” and meet each corporation’s specific criteria, the CNote spokesperson said.
There is no set deadline by which to deploy the deposits, but CNote does aim to distribute the dollars “as swiftly as possible using a needs-based approach,” the spokesperson said.
Several minority depository institutions and CDFIs have received an influx of deposits from corporations since 2020, when Floyd’s murder ignited discussions about the longstanding U.S. racial wealth gap and corporate America’s role in closing the divide.
The National Bankers Association, which represents minority-owned banks, has said that while such deposits are appreciated and can be useful, adding deposits without first increasing capital can dilute the capital bases of the financial institutions that receive them. That’s because deposits are liabilities on bank balance sheets.
The National Bankers Association has encouraged corporations to consider making
