EOC ANNOUNCED OVER 1 BILLION DOLLARS IN COMMITMENTS TO CDFIs AND MDIs
For Immediate Release: June 8, 2023
Contact: Damara Catlett, dcatlett@rabengroup.com, 215-828-9628
MEMBERS OF THE ECONOMIC OPPORTUNITY COALITION ANNOUNCED OVER 1 BILLION DOLLARS IN COMMITMENTS TO COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS (CDFIs) AND MINORITY DEPOSITORY INSTITUTIONS (MDIs)
Roundtable hosted by Deputy Secretary Wally Adeyemo, Senators Warner and Crapo, brings together CDFIs and MDIs with Private Sector Leaders to discuss increasing deposits to community lenders
Economic Opportunity Coalition Releases Playbook for Private Sector to Make Increased Community Lender Deposits
Washington, D.C. – Today, U.S. Senators Mark Warner (D-VA) and Mike Crapo (R-ID), Deputy Secretary of the Treasury Wally Adeyemo, Community Development Financial Institution (CDFI), and Minority Depository Institution (MDI) leaders from across the country, and members of the Economic Opportunity Coalition (EOC), announced over 1 billion dollars in committed deposits to CDFIs and MDIs by EOC members. This historic achievement marks the coalition’s first key milestone in expanding access to capital for underserved communities and small businesses.
“Our economy works best when capital is unlocked across races and regions,” said Deputy Secretary of the Treasury Wally Adeyemo. “Today’s announcement reflects the impact of a coordinated partnership between the public and private sectors to address economic inequality across the nation and maximize the impact of the Biden-Harris Administration’s unprecedented investments in underserved communities.”
Vice President Kamala Harris and Secretary Janet Yellen issued a call to action to the private sector in October 2022 to catalyze and align public and private investments to address disparities and accelerate inclusive and equitable economic opportunity. Treasury’s authorization of 9 billion dollars in capital investments to expand community lender loan activity, combined with the EOC’s over 1 billion dollars in deposits that can be leveraged multiple times over as loans throughout communities, is a powerful example of high-impact public-private partnership. The committed deposits announced today will help to bring down loan-to-deposit ratios at these institutions, which will allow them to increase their lending further while ensuring they maintain adequate liquidity. Black-owned Optus Bank has exponentially grown its balance sheet and, more importantly, its impact on high-potential underestimated communities, said Dominik Mjartan, President and CEO of Optus Bank. “With transformational investments from the private sector, we have been able to leverage the recent ECIP investment to more than double the bank’s loan portfolio in 2022 while directing more than 90% of our loans to mission-aligned communities.”
“This milestone is a testament to the power of public-private partnerships in accelerating economic opportunity,” said Dan Schulman, president, and CEO, PayPal. “Continued investment in CDFIs and MDIs is critical to building thriving communities and creating transformative change. PayPal is proud to be a founding member of this effort and we look forward to the continued collaboration.”
“CDFIs and MDIs are proximate to communities. They exist to support small businesses, aspiring homeowners, community infrastructure needs, and the development of affordable housing,” said Michael Roth, Co-lead of the Economic Opportunity Coalition and Co-CEO of Next Street. “Moving deposits to these kinds of community-based lenders facilitates access to credit in communities where traditional financial services are limited, unavailable, or unaffordable. That’s why this EOC milestone is really also a call to action. We know 1 billion dollars isn’t enough; it’s just the start.” said Roth.
Today’s announcement is a great example of aligning private-sector funding to boost public efforts. The $1 billion of deposits will allow CDFIs and MDIs to leverage a record $12 billion federal investment to help underserved communities access affordable capital secured by Sens. Warner and Crapo as part of the bipartisan COVID relief package approved by Congress at the end of 2020.
“This exciting benchmark is just the beginning of support for underserved and rural communities across the country,” said Senator Crapo. “The private sector’s partnership in investing in these communities is crucial for the long-term sustainability and economic growth of areas most in need.”
“Strengthening minority and community lenders will help unlock the economic potential of some of our most overlooked communities,” said Sen. Warner. “I’m glad to see the private sector working with us to leverage returns on public investment while investing in entrepreneurs and small businesses in communities of color and other financially underserved areas.”
Today marks the first milestone of more than 1 billion dollars in deposit commitments made by Bank of America, BNY Mellon, Citi, KeyBank, Mastercard, Micron, McKinsey, Moody’s, Next Street, PayPal, Upstart, TIAA, and Wells Fargo. These EOC members met today to celebrate achieving the first milestone, discuss strategies for accomplishing more, and call on other private sector actors to move toward 2 billion dollars in deposits and beyond.
In conjunction with today’s announcement, the EOC released a guide illustrating the impact of increasing deposits with high-performing CDFIs and MDIs. The guide also serves as a playbook for institutions and individuals who want to learn more about moving deposits to CDFIs and MDIs.
“Today’s one billion dollar funding announcement reflects the Coalition’s commitment to taking meaningful actions to accelerate economic opportunity in underserved communities across the country,” said Nat Hoopes, Vice President and Head of Public Policy and Regulatory Affairs at Upstart. “Upstart is proud to contribute both dollars and our AI technology to support CDFIs and MDIs in their important work to expand access to affordable credit.”
“Public and private investments are essential to closing wealth gaps in America and enabling lasting financial health and resilience, including throughout retirement. As a founding member of the EOC, TIAA is proud to contribute to this critical funding milestone and to advance collective engagements that unlock resources for innovators, business owners and other leaders in underserved communities,” said W. Dave Dowrich, CFO at TIAA. “Supporting the holistic financial well-being of communities to help achieve longer-term equitable growth goes hand-in-hand with our efforts to ensure all Americans can retire with dignity and financial security. As too many Americans navigate economic challenges, these investments demonstrate that bipartisanship and cross-sector collaboration can deliver scalable and sustainable solutions that can meaningfully change lives and improve communities.”
“There is a multiplier effect that happens when we work in coalition,” said Rip Rapson, president & CEO of The Kresge Foundation, which helped underwrite the EOC in its first year. “EOC’s achievement of this over $1 billion milestone demonstrates that effect, but we know it will take much more to create and scale economic opportunity in all communities, especially in communities of color. We believe this partnership will ultimately change the fabric of communities across the country that have long been left out.”
“KeyBank embraces the opportunity to partner with Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) through the Economic Opportunity Coalition,” said Chris Gorman, CEO and Chairman of KeyCorp. “At Key, our purpose is to help our clients and communities thrive. In partnership with CDFIs and MDIs, we are bringing that purpose to life by expanding banking services in our neighborhoods and bringing more capital-building tools to underserved communities. We appreciate the leadership of Senators Warner and Crapo, and the Treasury Department’s commitment to an inclusive economy.”
“These are communities that are hurting, but we also see a spirit of innovation among community leaders, institutions, and corporations,” explains Crystal German, an executive vice president at Self-Help, an MDI and one of the largest community development-designated financial institutions in the country. “This nexus of action is coming at a moment when the communities we work with are still dealing with the impacts of the pandemic, growing disparities in homeownership rates, eroded savings, and the psychological trauma of concentrated death and illness during COVID. Yet those in our communities never stopped seeking opportunities to become homeowners or build companies that are the backbone of their communities. We support them. These dollars are investments in their resiliency and recovery.”
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The Economic Opportunity Coalition (EOC) is a historic effort to catalyze and align public and private investments to accelerate inclusive economic growth. The corporations and foundations that are members of the EOC have committed to aligning major investments in communities of color with investments made by the Biden-Harris Administration.
The founding members of the EOC include Ariel Investments, Bank of America, BNY Mellon, Capital One, Citi, Discover, Ford Foundation, Goldman Sachs, Google, Key Bank, Kresge Foundation, Mastercard, McDonald’s, McKinsey & Company, Micron, Momentus Capital, Moody’s, Netflix, Next Street, PayPal, PNC, The Rockefeller Foundation, TIAA, and Upstart.