Truist Financial, which is nearing the expiration of a $60 billion community investment plan that was reached as part of the BB&T-SunTrust Banks merger, has begun work on a new agreement.
The company’s 2019 plan, which included pledges to provide mortgages, small business loans and other investments in lower-income areas, came with a three-year timeline. At the time it was announced, it was one of the biggest deals ever inked between a bank and the National Community Reinvestment Coalition.
A Truist executive recently indicated that the company doesn’t see such community investment pledges as one-off deals designed only to grease the rails for the approval of a large merger.
“It’s something that Truist is going to do not because we have regulatory issues or necessarily a merger acquisition,” Anthony Weekly, Truist’s chief Community Reinvestment Act and community development officer, said this month at a conference hosted by the Consumer Bankers Association. “This should be guided by who we are, and how we serve the community.”
A new community investment plan from Truist would offer a way for community groups to benefit years after the BB&T-SunTrust merger was completed. It could also signal to other big banks that have struck similar plans in connection with large mergers that they may be expected to provide further commitments.
“I've had conversations with NCRC, and many others, about what it looks like, that next approach,” Weekly said.
Negotiations over a new deal would give community groups a chance to provide input after
Weekly said the new plan will come with “some teeth,” but he wouldn’t provide details on the mechanics of the agreement or a potential dollar figure.
NCRC has been encouraging banks to renew their community benefit agreements “whether they are merging or not,” the group’s CEO, Jesse Van Tol, said in an email.
“Several of our bank partners — including Truist — have proactively approached us to update their commitments,” Van Tol said. “They see it as a valuable framework to measure their progress in serving the community, including their efforts towards racial equity.”
Charlotte, North Carolina-based Truist, which has $541 billion of assets, isn’t the first bank to negotiate a new agreement with advocacy groups following a previous round of investment pledges.
The $174 billion-asset Huntington Bancshares in Columbus, Ohio, made a $16 billion pledge in 2016 as part of its acquisition of FirstMerit in Akron, Ohio. In 2020, a little over a year after completing the earlier investment plan, Huntington agreed to a
Huntington Community Development Program Director Staci Glenn Short, who spoke on the same panel at the industry conference, said that her team worked ahead of time to develop the 2020 plan with various community groups.
Other banks that have reached community investment agreements in recent years include: PNC Financial Services Group, which rolled out a four-year, $88 billion plan after announcing plans to acquire the U.S. operations of the Spanish banking giant BBVA; and M&T Bank, which last year
Truist is on track to meet its full $60 billion commitment in the 2019 agreement, a spokesperson for the bank said Wednesday.
“In 2022, we’re in earnest dialogue with the community leaders and advocates on our community advisory board regarding new ways to serve and support the communities in which we live and work,” the spokesperson said in a statement. “We’re thoughtfully considering the next chapter and look forward to sharing more in the future.”
