Banks invest in LA to reduce racial inequalities

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OneUnited’s Kevin Cohee said the ways in which creditworthiness is assessed are also changing.

Los Angeles banks have invested millions and pledged billions in the past two years to advance initiatives and institutions aimed at narrowing the country’s racial wealth gap, and most signal that support stays here.

New York City-based JPMorgan Chase announced earlier this year that it had donated more than $ 40 million to support minority depository institutions through a multi-billion dollar
Dollar Efforts to Combat Racial Inequality. Bank of America, based in Charlotte, NC, latest quarterly financial report shows that it has fulfilled similar commitments by investing more than $ 36 million in MDIs and an additional $ 300 million in 100 stock funds that raise capital for Provide funds to various entrepreneurs and companies. San Francisco-based Wells Fargo followed a similar strategy, investing $ 50 million in 13 MDIs in June while removing overdraft fees that disproportionately affected minority borrowers.

Protests following the murders of George Floyd and Breonna Taylor in 2020 are consistently cited in media reports as the main motivator for initiatives like this one. Kevin Cohee, chief executive of MDI OneUnited Bank, which has two corporate offices in Baldwin Hills / Crenshaw and Boston, said progress is due in equal parts to societal and technological advances.


He cited artificial intelligence as a prime example of the role technology plays as a great balancer in the financial sector.


“It takes us beyond traditional methods of determining credit,” Cohee said. “Historically, the factors in credit decisions have been very narrow, very limited. We didn’t have the technology to address thousands, if not tens of thousands, of different factors that are changing the way we do business. “


For “the new Black Wall Street,” Cohee said the Internet has provided minority lenders and borrowers with a similar venue as Tulsa, Oklahoma, the original.
“Why would Tulsa of all places be where you’d found a place called Black Wall Street?” Cohee said. “You’d think places like New York, Philadelphia, or a big south city like Atlanta would be where you’d find that source of entrepreneurship and ingenuity. But in Tulsa this community called Greenwood developed, and it’s the only place I know where actual reparations have been made, “said Cohee, whose great-great-grandfather Charles Cohee Jr. was part of the group that successfully lobbyed Congress in 1894 for redress for freedmen in Oklahoma.

“People actually have their 40 hectares and a mule. It was a place that showed that black Americans were given a fair chance. “

Tom Nida, executive vice president of CityFirstBroadway, with two headquarters in downtown and Washington, DC, said MDIs, which are focused on community development, have addressed the intergenerational nature of the wealth gap.


“Many African Americans do not own a home and cannot benefit from appreciating home values, building equity that could fund education, retirement, or starting a small business,” said Nida.


As real estate prices continue to explode, the dream of owning a home without additional help has only become even more impossible. This is where MDIs can play a crucial role, he added.


“We cannot address such problems alone, but we can forge private-sector and private-public partnerships to harness the resources available,” said Nida.


Here are examples of how such partnerships and efforts are taking shape in regional and national banks in the form of various outreach initiatives and offers to customers.


OneUnited Bank

The bank’s primary business activity is making and buying mortgage loans – with an emphasis on urban and low-to-middle income communities – and funding those activities through the collection of affordable mortgage loans provided by the Federal Deposit Insurance Corp. insured deposits. Cohee estimates the Los Angeles organization has provided more than $ 100 million in loans to these communities since March.

In honor of Cohee’s ancestors and other early pioneers in minority finance – and to celebrate the creation of a “new Black Wall Street” – OneUnited recently launched the Greenwood Visa Debit Card, a no-fee option for low- to middle-income customers.


With a physical presence in California, Massachusetts, and Florida, the company’s operations are becoming increasingly digital, Cohee said.


“It is unique to be able to offer this type of service nationwide – it is the only black-owned company with the capacity to serve hundreds of millions of people across the country,” Cohee said.


JPMorgan Chase

In addition to announcing earlier this year that it has invested $ 40 million in support of MDIs and various financial institutions for community development, the bank has pledged to invest $ 30 billion by 2025 to address racial inequalities in finance Their “Advancing Black Pathways” initiative to combat a range of business services, personal financial resources and professional training.

In February, Bank launched Empowering Change, a program supported by Google in partnership with MDIs and CDFIs to provide economic opportunities for underserved communities. The program aims to enable MDIs and CDFIs to offer their clients new investment products, strengthen their technological capabilities and generate new income through fund sales.


City group

Citigroup Inc.’s $ 1 billion Racial Justice Initiative, announced in April, was lauded by Los Angeles City Council President Nury Martinez, who hailed it as a direct investment in the future of the city.

In addition to helping MDIs in the area, Citi will partner with the city to provide college savings accounts for public school students, while also working with the National Urban League to offer toll-free options across the national network.


Citi said its Action for Racial Equity plan offers a comprehensive approach to increasing access to banking in colored communities and increasing black home ownership and investment in black-owned companies.


Bank of America

The bank has directly funded more than $ 400 million of its five-year engagement, according to its latest quarterly report, much of which will benefit MDIs and equity fund investments in California. These include Vamos Ventures, based in Los Angeles, MaC Ventures, and Broadway Financial Corp. as well as a variety of things to do in San Diego, the Bay Area, and throughout the Central Valley.

The company represents the Pacific Coast Regional Small Business Development Corp. and the Greater Los Angeles African American Chamber of Commerce continue to provide capital investments and grants to support resources, microcredit, and technical assistance for local black businesses.


Last year, the bank launched a jobs initiative that provides $ 25 million to 21 higher education institutions, including traditionally black colleges and universities, Hispanic institutions, and community colleges, to support professional skills and placement.

That included a $ 1 million grant to LA Trade-Tech College and $ 1 million to Riverside City College last year, as well as a new college partnership in Orange County that was finalized.


Comerica Bank

Comerica announced in May that it will expand resource and financial assistance programs to minority and women owned small businesses with a $ 5 billion pledge of small business lending over the next three years.

In 2020, Comerica directed $ 10 million to MDIs, including $ 2.5 million each to downtown Broadway Federal Bank and the Commercial Bank of California of Irvine

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