BMO Financial pledges $5 billion to tackle U.S. racial wealth gap
BMO Financial Group in Toronto is commiting $5.1 billion over the next five years to help reduce the racial wealth gap in the United States and advance a more inclusive economic recovery.
In the latest instance of a bank pledging billions of dollars to try address systemic racism in the U.S., the parent company of BMO Harris Bank announced the launch of BMO EMpower, a plan to address economic barriers faced by minority businesses, communities and families. The commitment comes two months after BMO Financial set new five-year diversity goals to increase the representation of Blacks, Indigenous, People of Color, Latinos and LGBTQ2+ in its workforce, its customer base and within the communities it serves.
“The barriers that disproportionately affect minorities — and in particular Black and Latinx communities — have only intensified during the COVID-19 pandemic,” David Casper, BMO Financial's U.S. chief executive, said in a press release. “The bold commitments outlined in this pledge are designed to help tackle barriers to inclusion in the financial services industry and create more opportunity for our clients, communities and colleagues to succeed in business and in life.”
BMO Financial is steering its investments in several areas, including $3 billion for community reinvestment in affordable housing and neighborhood revitalization. Another $500 million was committed to provide commercial loans to Black- and Hispanic-owned businesses. The rest will provide mortgage loans in low- and moderate-income communities and advance supplier and business diversity initiatives.
The company also pledged to add more third-party Black- and Latino-focused firms to its wealth management platform.
Since June, several large and midsize banks have made major financial pledges in response to civil unrest over racial inequality and the pandemic’s outsize impact on minority communities. Bank of America pledged $1 billion over four years, U.S. Bancorp committed $116 million this year and PNC Financial Services Group said it would spend more than $1 billion.
In September, Huntington Bancshares in Columbus, Ohio, pledged $20 billion over five years to improve economic opportunities throughout its footprint. A month later, JPMorgan Chase announced the largest commitment — $30 billion over five years — to provide economic opportunity to underserved communities, especially Black and Hispanic communities.
BMO Financial’s pledge is part of a “continued focus on creating a society with zero barriers to inclusion,” the company said. Its diversity workforce goals include increasing the number of Black and Latino employees in senior leadership roles to 7% for each group in the U.S. while increasing the number of Black and Latino interns and entry-level employees to 30% in the U.S.
The company also introduced a new goal to bring LGBTQ2+ representation up to 3% of the total workforce.