BofA details investments to help Black- and Hispanic-owned businesses
After pledging $1 billion to address racial and economic inequities in the areas it serves, Bank of America is detailing how it plans to spend $300 million of that financial commitment.
The Charlotte, N.C., company said Tuesday that it will invest a combined $200 million in Black- and Hispanic-owned businesses seeking capital and in programs that develop future entrepreneurs in minority communities.
BofA will invest $50 million in minority depository institutions. It will also spend $25 million on community outreach and an additional $25 million on jobs initiatives in Black and Hispanic communities.
“These initiative investments will address access to jobs and support for small businesses by creating more pathways to employment in communities of color and more support for minority entrepreneurs,” Chairman and CEO Brian Moynihan said in a press release.
The company’s financial support is already underway. So far, it has completed investments in three minority depository institutions: First Independence in Detroit, Liberty Financial Services in New Orleans and SCCB Financial in Columbia, S.C. Each of those investments amounted to roughly 5% of the respective bank's common equity. To help communities combat the spread of coronavirus, BofA has also already provided 5 million masks to communities in need.
On deck are investments in additional Black- and Hispanic-owned depository institutions, more donations of personal protective equipment, and grant funding to provide career training for Black and Hispanic individuals. The grants will be facilitated through partnerships with over 20 colleges and universities serving Black and Hispanic students.
BofA said it expects to release more details about direct equity investments at a later date.
In June, Bank of America became the first major bank to announce a financial commitment to help local communities tackle economic and racial inequalities that have been exacerbated by the coronavirus pandemic. Vice Chair Anne Finucane, who is overseeing the plan, told American Banker that the crises of 2020 — the pandemic and recession as well as the unrest after the police-involved killings of George Floyd, Breonna Taylor and others — spurred the company to double its initial pledge.
Other banks have made similar commitments. In June, PNC Financial Services Group in Pittsburgh pledged at least $1.05 billion to fight systemic racism, while U.S. Bancorp in Minneapolis said it would spend $116 million this year, including $100 million in additional capital to Black-owned and operated businesses and organizations within its 26-state footprint.
Last week, Huntington Bancshares in Columbus, Ohio, said it would spend $20 billion over five years to improve economic opportunities across its Midwest footprint. Like its peers, Huntington unveiled a community plan that involves a combination of lending, investments and philanthropic donations.