U.S. Black Chambers (USBC) President Ron Busby released the following statement regarding Wells Fargo $50 million investment in African American community-based banks”
“We’re on the front lines of advocating for access to capital for Black business owners, Black business owners are historically and presently blocked from opportunites to obtain business loans and access to capital.
We applaud Wells Fargo for its $50 million investment in Black community-based banks. Wells Fargo has demonstrated an ongoing commitment to supporting economic growth in the Black community. Whether its their sponsorship of our chambers or small business initiatives, like our Entrepreneur Training & Financial Education Program, Wells Fargo is a leading example of broadening access and opportunites that support economic growth in the Black community,” says Ron Busby, President & CEO of the U.S. Black Chambers
Wells Fargo announces it is seeking to commit up to $50 million in capital for Minority Depository Institutions
The investment furthers the company’s commitment to help African American communities succeed financially.
Wells Fargo has announced it is seeking to invest up to $50 million in capital for African American Minority Depository Institutions, or MDIs, as part of its commitment to supporting economic growth in African American communities.
MDI support fits in among other efforts to empower diverse communities:
In 2018, Wells Fargo funded $15.3 billion in new purchase loans to low- and moderate-income households.
In 2019, Wells Fargo announced a $1 billion commitment to address the housing affordability crisis in the United States through 2025.
Wells Fargo pursues opportunities to engage the diverse supplier community, increase diverse spend, and build capacity and expertise for high-potential diverse suppliers.
The NeighborhoodLIFT® program, Wells Fargo’s signature sustainable housing collaboration with NeighborWorks® America, has assisted more than 20,000 homeowners.
Wells Fargo works with organizations, such as United Negro College Fund, Rainbow Push, NAACP, Thurgood Marshall College Fund, 100 Black Men of America, and U.S. Black Chambers, Inc., to conduct free financial capabilities seminars and workshops.
Wells Fargo delivers resources and guidance to support financial health, including Hands on Banking®, a noncommercial program that teaches people about the basics of responsible money management, and Path to Credit, a site that offers interactive videos, tips, infographics, and quizzes that can help consumers learn ways to build and rebuild their credit.
What is an MDI?
MDIs are FDIC-insured depository institutions where either (i) minority individuals represent at least 51% of voting stock or (ii) a majority of the board of directors is minority and the community that the institution serves is predominantly minority.
“MDIs are a key part of the lending ecosystem for underserved communities, playing an important role in neighborhood revitalization, and we look forward to helping African American MDIs grow,” said Jonathan Weiss, CEO of Corporate & Investment Banking and interim CEO of Wealth & Investment Management at Wells Fargo.
MDIs — often community-based banks — play an important role in providing mortgage credit, small business lending, and other banking services.
MDIs have received increased focus recently with Congresswoman Joyce Beatty and Congressman Gregory Meeks sponsoring legislation to enhance MDIs. MDIs have recently struggled to attract new capital and remain reasonably profitable, making it more challenging to achieve their mandate. The overall number of MDI charters have decreased by over 30% since 2008. Over this time, African American MDI charters in particular have declined at an even faster rate than their peers.
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With the investment, Wells Fargo aims to help stimulate economic growth and opportunities in the communities MDIs serve. The investment will contribute capital, connections, and expertise to help MDIs grow, serve their communities, and expand their sphere of influence.
“An infusion of capital in these smaller, community-based banks is truly a meaningful investment, because the ultimate beneficiaries are minority members of low- to moderate-income communities, a demographic that Wells Fargo is committed to supporting,” said Gigi Dixon, Wells Fargo’s senior director of external relations for national constituents. “Their success is tied to the success of our broader communities.”
Investing in MDIs is one more step in Wells Fargo’s long history of helping African American communities succeed financially.
This investment complements the Wells Fargo Diverse Community Capital program, a five-year, $175 million program working with Community Development Financial Institutions to empower diverse small business owners with greater access to capital and technical assistance so they can grow and sustain local jobs. The DCC program is a collaboration with Opportunity Finance Network and CDFIs across the country. To date, the CDFIs in this program have made 124,000 loans, delivered 322,000 hours of technical assistance, and benefited 49,000 small business owners who collectively sustain more than 183,000 jobs in rural and urban markets nationwide.
It also aligns with Wells Fargo’s 10-year initiative to work with the National Urban League and the National Association of Real Estate Brokers to create 250,000 African American homeowners and invest an additional $15 million in homeowner education and counseling. Wells Fargo has helped to create 42,947 African American homeowners in the first two years of the commitment with $10.6 billion in financing and provided $4.7 million in homebuyer education and counseling.