U.S. Bancorp in Minneapolis, which is looking to buy MUFG Union Bank, has agreed to a five-year community benefits plan totaling more than $100 billion.
The $586 billion-asset company reached the agreement with the National Community Reinvestment Coalition and the California Reinvestment Coalition. About 60% of the total will support efforts in California.
“Banks are the economic engines of our communities. As such, we can make meaningful and significant impacts in supporting the ability of low- and moderate-income communities and communities of color to access capital and build wealth,” Andy Cecere, U.S. Bancorp’s chairman, president and CEO, said in the release.
“We want our actions today to create a ripple effect that will life future generations,” Cecere added.
“This plan is a milestone not only because of its overall size but also because of the scale of increases committed for mortgage and small business lending, affordable housing, environmental and social impact lending, and for the plan’s clear focus on racial equity and access to credit directed specifically to communities of color,” Jesse Van Tol, NCRC president and CEO, said in the release.
U.S. Bancorp committed to provide at least a 20% increase in mortgage lending units nationally and a 30% increase in California to low- and moderate-income borrowers and communities, along with communities of color.
U.S. Bancorp pledged to increase lending to small businesses and small farms by 15% nationally (and by 25% in California). It committed to increasing lending and investing by more than 40% nationally, and over 50% in California, in community and economic development, affordable housing, environmental and social impact lending and investments – with a focus on racial equity and access to credit for organizations and developers of color.
The company committed to adopting, enhancing and expanding MUFG Union’s business diversity lending program and to developing a similar program for mortgages. It pledged to provide access to lending capital for minority-led and minority-owned developers in support of affordable housing projects.
There are plans to open five branches in low- or moderate-income communities, or middle-income majority minority communities, in California over five years. The company plans to open or preserve five other branches in those areas.
Finally, U.S. Bancorp said it will keep all front-line branch employees in California, Washington and Oregon.
U.S. Bancorp recently said it was unsure if it would be able to complete the $8 billion acquisition by midyear, as originally planned.