Wells Fargo Invest in Five Additional Black-Owned Banks
Wells Fargo & Company today announced equity investments in five African American Minority Depository Institutions, or MDIs, as part of its March 10, 2020, pledge to invest up to $50 million in Black-owned banks. As part of the equity capital investment, Wells Fargo is also offering access to a dedicated relationship team that can work with each MDI on financial, technological, and product development strategies to help each institution strengthen and grow.
“The country’s MDIs are vital to minority communities, but over the last two decades, many have declined or have closed. The capital investment we are announcing is important, but it’s our relationship approach that will make the difference in their futures. We want to be a partner to these important institutions and, in turn, have a positive effect on local communities,” said William Daley, vice chairman of Public Affairs at Wells Fargo.
Today’s announcement includes investments in the following institutions:
Carver State Bank in Savannah, Georgia
Citizens Trust Bank in Atlanta, Georgia
First Independence Bank in Detroit, Michigan
Liberty Bank in New Orleans, Louisiana
Unity National Bank in Houston, Texas
These investments follow Wells Fargo’s Feb. 8, 2021, announcement regarding its investments in six African American MDIs and takes the Company’s total investment to 11 MDIs to date. In addition, Wells Fargo will be making its nationwide ATM network available for customers of these 11 MDIs to use without incurring fees.
“Guided by our founding principles to promote financial stability and equality for all communities, Citizens Trust Bank is proud to partner with Wells Fargo in expanding these efforts. The partnership enhances our ability to deploy more capital in our markets and beyond. We appreciate Wells Fargo for its commitment and alliance in providing solutions to the very important challenge of addressing inequalities that disproportionately impact communities of color,” said Cynthia N. Day, President and CEO of Citizens Trust Bank.
Wells Fargo’s financial commitments are in the form of critical equity capital, which is foundational to the MDIs’ ability to expand lending and deposit-taking capacity in their communities. The investments, primarily non-voting positions, are designed to enable the banks to maintain their MDI status. Wells Fargo is also supporting each MDI’s development through a banking relationship in the form of a single touchpoint coverage model that will help them access Wells Fargo’s expertise and pursue strategic priorities like entering new markets, expanding locations, designing new products, and hiring staff to support loan growth.
External partners that assisted Wells Fargo include the National Bankers Association and Sullivan & Cromwell. External advisory committee members are Kim D. Saunders, president and CEO of NBA; Aron Betru, managing director of the Center for Financial Markets at Milken Institute; and John W. Rogers Jr., chairman, co-CEO, and CIO of Ariel Investments.
Wells Fargo’s financial commitment announced today complements additional initiatives that aim to serve all of our customers and communities:
On March 30, 2021, Wells Fargo closed on a $5 million patient capital loan to Hope Enterprise Corporation (HOPE), a 501(c)(3) and a certified Community Development Financial Institution that is dedicated to strengthening communities, building assets, and improving lives in the Delta and other economically distressed areas of the Deep South. HOPE plans to use the funds as secondary capital for its credit union, providing financial services to underserved markets and people in the Deep South. Based in Jackson, Mississippi, HOPE serves Alabama, Arkansas, Louisiana, Mississippi, and Tennessee
On March 25, 2021, Wells Fargo was one of several U.S. banks and payment technology companies named as investors in Greenwood, the digital banking platform for Black and Latino individuals and business owners, as part of Greenwood’s $40 million of Series A funding. Greenwood is partnering with FDIC-insured banks to give customers the ability to spend and save securely and will feature best-in-class online banking services, innovative ways to support minority-owned banks, and give-back programs focused on Black and Latino causes and businesses.
Wells Fargo was one of the first banks to sign the Office of the Comptroller of the Currency’s Project REACh MDI Pledge, which encourages banks to develop meaningful partnerships with MDIs to help them remain a vibrant part of the economic landscape and better promote fair, equal, and full access to financial products and services in their communities.
The company’s Open for Business Fund donates all gross processing fees we received from the Paycheck Protection Program in 2020 — approximately $420 million — to non-profits helping small businesses navigate the pandemic, with an emphasis on small businesses owned by Black, African American, and other small business owners of color.
The Wells Fargo Diverse Community Capital program is a $175 million program with Community Development Financial Institutions, or CDFIs, to provide capital and technical assistance for diverse small business owners in the U.S. Approximately 75% of awardees are led by leaders from underrepresented communities. The DCC program has enabled CDFIs to lend nearly $350 million to Black and African American small business owners across the country since the program launched in 2015, according to Opportunity Finance Network.
In the 10 years spanning 2009 to 2018, Wells Fargo was the No. 1 financier of home loans to African Americans and originated more mortgages to help Black home buyers purchase homes than the four other largest bank lenders combined.
In 2017, the company pledged to create 250,000 Black homeowners by 2027 through lending $60 billion for home purchases, increasing the diversity of the sales team, and supporting homebuyer education and counseling. In the first three years of the commitment, 60,527 African American homeowners have been created with $15.2 billion in financing.
Wells Fargo is donating $5.4 million in grants to 15 legal assistance organizations across the U.S. that work to keep people and families housed through services and advocacy efforts. This first-of-its-kind effort seeks to enable these non-profit organizations to provide free or low-cost legal representation to people at risk of eviction. These organizations have track records of serving, on average, more than 60% of people of color.