City National Bank has agreed to commit $11 billion in Community Reinvestment Act spending over the next five years in connection with its proposed sale to Toronto-based Royal Bank of Canada.
Its commitment was announced Friday by the California Reinvestment Coalition, whose members had urged the bank to increase CRA spending as a condition of the deal, said Paulina Gonzalez, the nonprofits executive director.
RBC announced in January that it is buying City National for about $5.4 billion. City National is expected to retain its name, operating as a unit of RBC, once the deal closes later this year.
The nonprofit said that City National has agreed to provide $4.2 billion in small-business loans, $4.4 billion in community redevelopment loans, and $1.6 billion in qualified CRA investments over five years. It also plans to originate $700 million in residential mortgages to minority borrowers and make $30 million in charitable contributions.
City National will increase its Small Business Administration lending to $140 million a year, with half of that amount each year directed at low-and moderate-income census tracts. That commitment would place City National among the top 30 SBA lenders in the country; currently it is not ranked among the top 100, according to SBA data.
The bank also will invest a minimum of $14 million a year in Community Development Financial Institutions that provide financing for affordable housing.
City National also has agreed to develop a checking account for unbanked or underbanked communities. The bank has even agreed to reconfigure its ATMs to waive out-of-network surcharges for California public assistance recipients that use Electronic Benefit Transfer cards.