Warner, Crapo, Adeyemo applaud $1 billion in deposit commitments for minority & community lenders

U.S. Senators Mark Warner (D-VA) and Mike Crapo (R-ID), co-chairs of the Community Development Finance Caucus, joined Deputy Secretary of the Treasury Wally Adeyemo and leaders from the corporate and banking sectors for a significant announcement on Capitol Hill. Members of the Economic Opportunity Coalition revealed that they have successfully secured $1 billion in committed deposits for Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs). This milestone represents a major step toward expanding lending capacity and economic opportunities for underserved communities and small businesses recovering from the impact of the pandemic.

The infusion of private sector funding will complement the federal investment of $12 billion, secured by Senators Warner and Crapo as part of the bipartisan COVID relief package approved by Congress at the end of 2020. This joint effort aims to strengthen and enhance the lending capabilities of CDFIs and MDIs. The additional deposits announced during the event will help these institutions improve their loan-to-deposit ratios, allowing for increased lending while maintaining adequate liquidity.

Senator Warner emphasized the significance of empowering minority and community lenders as a means to unlock economic potential in often overlooked communities. By leveraging returns on public investment and investing in entrepreneurs and small businesses in financially underserved areas, the private-sector partnership exemplifies the commitment to fostering economic growth and addressing inequality.

Senator Crapo expressed his enthusiasm for the milestone achieved by the Economic Opportunity Coalition, highlighting the critical role played by private sector investment in supporting underserved and rural communities. The partnership between the public and private sectors is instrumental in ensuring the long-term sustainability and economic advancement of areas in greatest need.

Deputy Secretary of the Treasury Wally Adeyemo underscored the importance of bridging economic inequalities across the nation. He emphasized that the collaborative efforts of the public and private sectors showcased the impact of coordinated partnerships in addressing economic disparities and maximizing the unprecedented investments made by the Biden-Harris Administration in underserved communities.

Michael Roth, Co-lead of the Economic Opportunity Coalition and Co-CEO of Next Street highlighted the role of CDFIs and MDIs in supporting small businesses, aspiring homeowners, community infrastructure, and affordable housing. Moving deposits to these community-based lenders facilitates access to credit in areas where traditional financial services are limited, unavailable, or unaffordable. While the milestone of $1 billion in deposits is significant, Roth emphasized that it is just the beginning and called for further action to continue supporting underserved communities.

The Economic Opportunity Coalition, launched by Vice President Harris in July of last year, comprises over two dozen corporations and philanthropies committed to making substantial investments in communities of color. The coalition aims to address economic disparities and accelerate economic opportunities for these communities. Representatives from Wells Fargo, Next Street, KeyBank, TIAA, Citi, and Bank of America were present at the event.

Martin Eakes, CEO of Self-Help Credit Union, praised the leaders and their associates for their actions, noting that the Emergency Capital Investment Program (ECIP) had been a game-changer. The program provided equity investments that mission-based financial institutions could leverage to attract additional deposits and debt, resulting in billions of dollars of lending capital that will create opportunities for homeownership and businesses in communities of color across the country.

Dominik Mjartan, President and CEO of Optus Bank, emphasized the significant growth and impact that the bank has experienced through transformational investments from the private sector. These investments have allowed the bank to double its loan portfolio in 2022, with over 90% of loans directed to mission-aligned communities.

Darrin Williams, Southern Bancorp, Inc. CEO, highlighted the importance of the commitments made to CDFIs and MDIs in significantly expanding their impact on working Americans who have historically faced challenges in achieving economic prosperity. He emphasized the capacity of the industry to finance positive economic change in underserved areas, from rural America to urban centers.