- U.S. Bank pledged Friday to boost loans to black-owned businesses by $100 million — one of several initiatives the bank introduced in response to last month’s death of George Floyd and the subsequent civil unrest. Floyd, who was black, was killed by a white police officer May 25 in Minneapolis, where U.S. Bank is based.
- The company also promised to establish a $15 million fund to award community grants to organizations dedicated to addressing economic and racial inequality. “George Floyd’s life had meaning and purpose. We need to do what we can to give the heartbreak that has followed meaning and purpose, as well,” Andy Cecere, chairman, president and CEO of U.S. Bank, said in a statement. “If we are truly going to draw strength from diversity, we have to do better. We have to create opportunities that bridge gaps, that generate economic prosperity, and that allow people to achieve their potential.”
- The commitment comes days after Bank of America said it would donate $1 billion over four years to help communities address economic and racial inequality exacerbated by the coronavirus pandemic. The funds will be directed to programs that focus on health, jobs, small businesses and housing in areas with high numbers of nonwhites, the bank said.
The bank’s new initiatives follow internal comments Cecere made to employees one day after Floyd’s death. He said he expected to be held personally accountable for the bank’s “core value of drawing strength from diversity.”
“We talk about the importance of diversity, equity and inclusion as a society, but it is hard to say progress is being made when these are the headlines dominating the news,” Cecere wrote to employees, according to the Minneapolis Star Tribune. “We have to do better, and I believe we can start right here at the bank.”
U.S. Bank said it would also give its employees an extra day of paid time off to volunteer in their communities during the next two months.
The bank said it will also refine its talent management strategy to develop and promote people of color to leadership roles.
“We need to be more intentional about creating conditions in which all of our employees can develop leadership, demonstrate creativity and advance professionally,” U.S. Bank’s chief diversity officer, Greg Cunningham, said in a statement last week. “We are steadfast in our commitment to placing equal value on the potential contributions, unique leadership skills and creativity that come with the black experience. We are making progress but need to continue to improve in this area.”
The bank said it also plans to rebuild branches that were damaged during protests against police brutality, adding that it would break ground as soon as possible on several branches in Lake Street and North Minneapolis — areas of the city that were damaged or burned during riots.
“We chose to serve these communities, and we will not turn our backs or abandon the neighborhoods where so many are hurting right now,” Cecere said. “We will continue to provide jobs, banking services and financial education in the areas that have been traumatized during the past week.”
The coronavirus prompted banking executives to spotlight inequality in recent weeks. JPMorgan Chase CEO Jamie Dimon said last month that the pandemic should be a “wake-up call.” But the national focus on race in the wake of Floyd’s death and the resulting protests has spurred some to ponder how to narrow the opportunity gap between whites and people of color.
Bank of America’s $1 billion commitment, for example, may include partnerships with historically black colleges and universities, aid for small nonwhite-owned businesses and hiring in low and moderate-income communities. The effort is also meant to support virus testing and other health services.
Berkshire Bank last week hosted virtual town halls with panels to discuss improvements that could be made to bolster black and Latino-owned businesses.
“When we looked at the wealth gap, we found a couple ways families get on that ladder: home equity, homeownership and business ownership,” Malia Lazu, Berkshire’s chief culture and experience officer, said last week, according to American Banker. “How do we grow capital in order to support minority businesses, in order to think about homeownership? One leads to the other.”
Berkshire worked with the nonprofit Runway Project to launch a Friends and Family loan pilot program to boost entrepreneurship among people of color.
“When COVID hit, I knew that a nationwide Katrina-type catastrophe was about to happen to poor people, to black people, to brown people,” Lazu said. “We needed to start levying dams so we can at least have something to salvage.”