Bank of America is injecting more capital into minority-led community development financial institutions, the latest move by the megabank to address social and economic inequalities.
The Charlotte, North Carolina-based company said Thursday that it will provide $25 million of capital to the National Alliance of Latino CDFI Executives and the African American Alliance of CDFI CEOs. The groups said they will use the capital — which will be split at $12.5 million each — to help their minority-led member CDFIs make more low-cost loans in disadvantaged communities.
Combined, the two groups represent more than 130 CDFIs led by people of color. The receipt of outside capital is critical to such organizations, whose median asset size is significantly smaller than the asset size of white-led CDFIs, according to a
"We are working across our company to address important societal priorities, including racial equality and economic opportunity," Dan Letendre, CDFI executive at Bank of America, said in a press release. The two groups "are uniquely positioned to understand the issues faced by their communities and bring to bear the necessary financial and cultural skills to serve them."
The capital will be distributed over the next six to 12 months, a bank spokesperson said.
Bank of America is a major investor in CDFIs in the United States. The $3.1 trillion-asset company has a portfolio of more than $2 billion of loans and investments currently spread among more than 250 CDFIs across all 50 states and the District of Columbia, it said Thursday.
A new bipartisan senate caucus organized around community development financial institutions is just the latest sign that the sector's political influence is reaching new heights.
Most of the bank's CDFI investments are $1 million to $20 million, the spokesperson said.
In June, the bank
The $25 million injection was highlighted Thursday at the National Association for Latino Community Asset Builders' 2022 conference in Washington, D.C. The association launched the National Alliance of Latino CDFI Executives, the first consortium of Latino CDFI leaders, in May.
"CDFIs are one of the most impactful vehicles for equitable economic investment in traditionally underserved communities, yet the very CDFIs that are most qualified to serve our communities struggle to be equitably capitalized," Marla Bilonick, president and CEO of NALCAB and chair of the National Alliance of Latino CDFI Executives, said in Bank of America's press release.
In the same release, Lenwood Long Sr., president and CEO of the African American Alliance of CDFI CEOs, said the investment "promises a path to larger future investments in developing the pipeline of Latino and African American-led CDFIs."
"This is a historic investment from Bank of America that recognizes the importance of minority-led CDFIs and advances economic empowerment in their communities," he said.
