Bank of America Commits $250 Million in Capital, $10 Million in Philanthropic Grants to Community Development Financial Institutions
Mar 30, 2020 01:34PM
By David Dykes
Bank of America said it will provide up to $250 million in capital to community development financial institutions (CDFIs) by funding loans through the newly established Paycheck Protection Program.
In addition, the bank said it will provide up to $10 million in philanthropic grants to help fund the operations of CDFIs.
CDFIs, also known as local loan centers, are small and typically not-for-profit providers of loans and technical assistance with a mission of serving low- and moderate-income communities. The funding and grants announced will be provided to CDFI loan funds and CDFI- and minority-owned banks, Bank of America officials said.
“Small businesses are the backbone of our communities,” said Anne Finucane, vice chairman of Bank of America. “CDFIs are integral to the development and sustainment of small businesses, health care centers, schools and other community facilities, as well as the financing of affordable housing and economic development projects. CDFIs will be critical in the response to the unprecedented challenges our communities are facing as a result of the coronavirus.”
The commitments will help expand access to capital and continued ability to handle financial obligations for more companies and not-for-profits during the humanitarian crisis, bank officials said.
To ensure CDFIs can continue to have the capital and ability to support small business and not-for-profits, Bank of America is working with each institution on a case-by-case basis to provide modifications and payment deferrals for those facing liquidity challenges, the officials said.
Bank of America is the largest investor in CDFIs in the United States – with more than $1.6 billion in loans and investments in over 250 CDFIs.
Last week, Bank of America announced a $100 million commitment to support local communities impacted by the coronavirus.
Bank of America also announced additional support for consumer and small business clients experiencing hardship from the impact of the coronavirus, including through its client assistance program:
- Consumer and Small Business deposit accounts: clients can request refunds including overdraft fees, non-sufficient funds fees, and monthly maintenance fees.
- Consumer and Small Business credit cards: clients can request to defer payments, refunds on late fees.
- Small business loans: clients can request to defer payments, refunds on late fees.
- Auto loans: clients can request to defer payments, with payments added to the end of the loan.
- Mortgages and home equity: clients can request to defer payments, with payments added to the end of the loan.
- In all of these instances, there will be no negative credit bureau reporting for up-to-date clients.
- Foreclosure sales, evictions and repossessions have been paused.