Western Alliance Bancorp in Phoenix has invested $2 million in a Lake Forest, Calif., community development financial institution.
Clearinghouse CDFI, a nondepository loan fund, said in a press release last week that the $18.7 billion-asset Western Alliance had become one if its biggest investors. The CDFI said it would use the capital to support affordable housing and economic development projects in communities and Native American reservations in California, Nevada and Arizona.
“We are pleased to leverage these dollars tenfold to significantly and positively impact communities throughout the western United States,” Douglas Bystry, Clearinghouse’s president and CEO, said in the release.
Clearinghouse’s biggest shareholder is CIT Group in Pasadena, Calif., which invested $2.5 million in August.
Western Alliance and CIT are among more than four dozen banks that own Clearinghouse stock. Banks typically receive Community Reinvestment Act credit for such investments, said Janine Jacokes, CEO of the Community Development Bankers Association in Washington.
The investment “is a pretty respectable amount,” Jacokes said in an interview. “It’s something bank regulators typically look favorably on. … I would think it would help [Western Alliance], no doubt.”
Western Alliance has received “satisfactory” ratings on its three most recent CRA exams.
“We applaud [Clearinghouse] for its efforts to make a real impact in communities where help is most needed,” Barbara Boone, Western Alliance’s senior vice president and CRA officer, said in the press release.
With roughly $400 million in assets, Clearinghouse is one of the nation’s biggest CDFI loan funds, Jacokes said. Over 21 years, it has funded more than $1.5 billion of loans for about 1,800 projects.