U.S. Bank, a Minnesota-based bank with 25 locations in Florida, including at 44 West Flagler St. and 200 S. Biscayne Blvd. in Miami, announced details last week of its Access Commitment initiative, a long-term approach that combines the efforts of the U.S. Bancorp Community Development Corporation (USBCDC), corporate social responsibility and its business lines, to help build wealth and improve bank service to minority communities.
Access Commitment will focus on three primary areas: supporting businesses owned by people of color, helping individuals and communities of color advance economically, and enhancing career opportunities for employees and prospective employees. The ongoing work builds on a $116 million commitment made by U.S. Bank last year that includes increasing supplier spend, launching innovative products and services, and providing transformative customer experiences and long-term place-based partnerships. The goal is addressing the persistent racial wealth gap, starting with the Black community.
This initial launch includes:
· A new $25 million microbusiness fund focused on businesses owned by women of color.
· A mortgage program focused on homeownership education and hiring.
· A focus on building sustained wealth as part of U.S. Bank’s wealth management business.
· Financial inclusion partnerships.
· Supply-chain financing focused on diverse businesses.
· Customized employee leadership development.
· A change to how U.S. Bank fills open positions within the organization.
“We believe access to capital for minority small business, housing and homeownership, and workforce advancement creates opportunities for systemic change,” said Andy Cecere, chairman, president and CEO of U.S. Bank. “U.S. Bank Access Commitment is our approach to building wealth and supporting individuals and small business owners through a series of business initiatives throughout 2021 and beyond. We are committed to be part of the solution.”
Supporting Black-owned businesses
The U.S. Bank Foundation and USBCDC will provide $25 million in grants and investments through a new microbusiness fund for businesses owned by women of color. The fund is focused on providing access to capital, technical assistance and networking. USBCDC will also provide $20 million in debt capital to Black-led and women-focused community development financial institutions (CDFIs). The foundation will provide an additional $5 million in grants to support expansion, capacity building, technical assistance and mentorship/networking.
The bank’s global trade and supply-chain finance teams will expand existing efforts to provide trade financing to more diverse businesses, with a focus on supply-chain finance. The team will work with corporate and commercial banking customers to optimize their working capital by providing bilateral access to the bank's receivables purchase program so businesses can provide competitive payment terms to their buyers, but be paid earlier than the due date. This will help free up much needed capital by improving cash flow and enhancing sales effort.
USBCDC said it will continue to look across its business for ways to deepen relationships with partners that are Black-owned, Black-led or are prioritizing racial equity in their work. Such efforts include prioritizing patient and lower-cost capital to Black-led CDFIs through a partnership with the African American Alliance of CDFI CEOs; removing barriers and providing stronger support to Black-led affordable housing developers; and using an intermediary community development entity (CDE) model to create opportunities for Black-led CDFIs and CDEs to earn revenue, build experience and receive their own New Markets Tax Credit allocation.
After committing to doubling its Black-owned suppliers within 12 months last year, the bank is reportedly making progress and said it’s on track to achieving that goal. Examples of that progress include new engagements in real estate appraisals, digital, technology and construction.
In the fall of 2019, U.S. Bank joined the Department of Treasury’s Mentor/Protégé program to provide vital support to Minority Deposit Institutions (MDIs). Since then it has been providing developmental assistance and engaged in revenue generating opportunities with First Independence Bank, a Black-owned bank headquartered in Detroit.
Helping communities of color advance
The bank’s planned DREAM program (Delivering Resources that Enable Access to Mortgage) will focus on advancing Black homeownership and increasing Black representation in the mortgage industry for individuals and families across its national footprint, through strategic outreach and engagement with local community partners. The initiative includes enhanced adult financial education, youth outreach and a mortgage loan officer development program focused on attracting underrepresented communities to the mortgage industry as a viable career choice. The DREAM initiative is set to launch in late summer.
Through its technology and operations business, U.S. Bank made an equity investment in Goalsetter, a Black-owned children and family finance app that provides a next-generation, education-first banking experience for children and teens, focused on financial literacy. U.S. Bank is working on ways to use Goalsetter in its everyday business offerings including financial education for its customers and in its scholarship program.
During 2020, the bank launched financial wellness coach programs in Aurora, Colorado, and in the Pullman neighborhood of Chicago, in partnership with Operation HOPE. The goal is to increase credit scores, savings and confidence, with an emphasis on serving people of color and underbanked individuals. Additionally, U.S. Bank will soon begin a new financial wellness pilot in Columbus, Ohio, offering financial education classes to high school students.