Published April 07, 2016 03:27
LOS ANGELES COMMUNITIES WILL BENEFIT FROM BANK’S NEW COMMITMENT
APRIL 6, 2016-Los Angeles--- The California Reinvestment Coalition announced today they have negotiated a Community Reinvestment Plan with BBCN and Wilshire banks as part of their merger, providing $8.1 billion of loans, investments and financial services in historically marginalized communities across the bank’s branch footprint in California. The plan, developed in partnership with the bank and local community-based organizations, sets public goals for reinvestment in low and moderate income communities and communities of color totaling 10% of the bank’s statewide deposits in 2017, increasing to 12% by 2021, and 15% by 2025. Over a ten year period, this amounts to at least $8.1 billion worth of reinvestment activity.
Paulina Gonzalez, executive director of the California Reinvestment Coalition, whose members advocated with the banks to increase their commitment as part of their merger, explains: “This plan shows what can be accomplished when banks work with organizations that advocate in the best interest of low income communities and communities of color, and are willing to stretch in their reinvestment goals like BBCN and Wilshire Bank did. BBCN and Wilshire Bank join City National, Banc of California, and Mechanics Bank in making meaningful commitments to meet the needs of the communities they do business in. We hope the new leadership at CIT Group takes notice and sees the benefits of working with local communities, instead of against them.”
Hyepin Im, president of Korean Churches for Community Development, adds: “We appreciate the two bank's continued commitment and leadership to serving the underserved communities. Every day we see low-income families here in Los Angeles who are being affected by the affordable housing crisis. We appreciate the bank’s commitment to addressing this crisis through investments in community development, and exploring financing for affordable rental housing and safe and affordable mortgages for low income Californians.”
Rick Kim, economic development services manager at Korean Youth Community Center, comments: “The banks' philanthropic commitment in the new plan will be very helpful to support local nonprofits who work with families to help them grow and sustain their income and assets. The bank’s philanthropy will help build financial capacity for low income households, support mortgage counseling, and technical assistance programs for local small businesses. All of this is so important for our communities.”
Namoch Sokhom, director of Business Development Center (BDC) at Pacific Asian Consortium in Employment (PACE), says: “This plan is a reflection of the banks working with local communities to craft a commitment that reflects local needs. The Loan Loss Reserve fund in the commitment will help local, mission-led, nonprofit loan funds leverage federal funds including SBA Microloan and CDFI funds to serve the credit needs of the smallest and most vulnerable local small businesses.”
Sherri Jackson, president of the Multicultural Real Estate Alliance for Urban Change, adds: “This plan is a strong testament to BBCN and Wilshire's commitment to Los Angeles communities and its role in helping to grow LA’s economy, especially in neighborhoods that haven’t been historically well-served by banks. We look forward to seeing BBCN and Wilshire Bank’s reinvestment work in the coming years.”
Highlights of the new plan include:
• Philanthropy: Beginning in 2017, the bank’s goal for philanthropic contributions will be equal to 1% of its net income after taxes for the preceding year. In 2018, 35% of this philanthropic commitment will go towards CRA qualified programs; by 2020, 50% will go to CRA qualified programs.
• Community Development: .25% of California deposits will be dedicated to community development investments, including affordable housing development, small business lending, and equity equivalents to CDFIs, CDCs, and in TOD projects.
• Small Business Lending: Starting in 2018, the bank’s goal is for at least half of the bank’s CRA qualified small business loans will be made to businesses with annual revenues of less than $1 million, or loans less than $150,000. Additional goals include investments in CDFI’s, participating in small business referral programs, and exploring other programs, like the state’s Small Business Loan Guarantee Program.
• Supplier Diversity: Within 18 months of the merger, the bank intends to develop a formalized corporate supplier diversity program.
• Consumer Accounts: The bank will promote BBCN’s basic checking that doesn’t allow overdraft at point of sale or ATMs, and will also offer Wilshire Bank’s Rainbow Savings account to encourage first time savers.
• Annual Meetings: The bank will hold annual meetings to review its CRA commitment and progress, and the CEO of the bank will attend.
• Affordable Housing: The bank will explore additional options to invest in affordable housing, including mortgages for low-income consumers; a lending program to support nonprofit affordable housing developers, and investments in transit-oriented developments.
To see a full copy of the plan visit CRC’s website.