BofA Backs Black-Owned Banks in $300 Million Equality Drive

Bank of America Corp. signage is seen with street reflections on a window in New York, U.S., on Wednesday, Oct. 12, 2016. Bank of America Corp. is scheduled to release earnings figures on October 17. (Photographer: Mark Kauzlarich/Bloomberg)

Bank of America Corp. invested $50 million in three Black-owned banks as part of its $1 billion pledge over four years to advance racial equality.

The second-largest U.S. lender took equity stakes of about 5% in three minority depository institutions: First Independence Corp. in Detroit, New Orleans-based Liberty Financial Services Inc. and SCCB Financial Corp. in Columbia, South Carolina, it said in a statement. Bank of America also is in talks with other lenders owned by African Americans and Hispanics and serving low- and moderate-income communities that are expected to be completed within a year.

The deals were announced as part of a $300 million allocation that also includes job programs, community outreach and direct equity investments in Black- and Hispanic-owned businesses.

“The idea is to create more jobs, more lending to businesses that will flourish in the longer term, and to create wealth for minorities and people of color,” Bank of America Vice Chairman Anne Finucane said in an interview.

Other commitments include:

• Direct equity investments totaling $200 million in Black- and Hispanic-owned businesses over four years.

• Grants of $25 million, which have already been completed, for jobs initiatives for 11 community colleges that serve predominantly Black and Latino students, and 10 public historically Black colleges and universities and Hispanic-serving institutions.

• Community outreach totaling $25 million, including providing 5 million masks to communities in need in the past 60 days.

“These initial investments will address access to jobs and support for small businesses by creating more pathways to employment in communities of color and more support for minority entrepreneurs,” Chief Executive Officer Brian Moynihan said in the statement.

Corporations are increasingly responding to public outcry over the killings of African Americans including George Floyd by police officers, which prompted global protests and growing awareness of systemic racism in the U.S. While bank leaders have denounced racism and offered overtures to minority groups, critics say the industry has created and prolonged economic gaps. The reckoning over race has spurred the #BankBlack movement, which calls on consumers to support Black-owned lenders, which have dwindled since the 2008 financial crisis.

“You can have very strong emotions, you can think in terms of the injustices, but it all comes down to what you’re doing about it,” Finucane said. “The $1 billion was intended to demonstrate that we take this very seriously.”

(Updates with BofA comments starting in third paragraph.)

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