NEW YORK, Oct 4 (Reuters) – Financial institution of America Corp plans to deposit a further $100 million into banks that target minority communities, the corporate mentioned on Tuesday.
This system doubles Financial institution of America’s earlier pledge to deposit $100 million in minority depository establishments, or MDIs, which can be principally owned by minority people. The second-biggest U.S. lender has expanded its racial equality initiatives in recent times, making $42.5 million in fairness investments in 22 MDIs and Group Improvement Monetary Establishments, and taking fairness stakes of lower than 5% of every lender.
For the smaller lenders, the inflow of deposits “expands their capability to make loans” for housing or companies, D. Steve Boland, Financial institution of America’s chief administrative officer, mentioned in an interview. “What we’d hope is our instance attracts in others” to make comparable strikes, he mentioned.
The deposits will in all probability vary from $1 million to $10 million, Boland mentioned. Optus Financial institution, Southern Bancorp and Metropolis First Financial institution are among the many lenders that can obtain deposits.
“MDIs are a crucial useful resource to minority and underserved communities,” offering banking companies, creating jobs and serving to companies, Boland mentioned individually in a press release.
U.S. banking giants have expanded their racial-equity pledges within the years after 2020, when the killing of George Floyd, a Black man, by a police officer sparked world protests.
Reporting by Lananh Nguyen; Modifying by Muralikumar Anantharaman and Chizu Nomiyama
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