Wells Fargo announces it is seeking to commit up to $50 million in capital for Minority Depository Institutions
The investment furthers the company’s commitment to help African American communities succeed financially.
Wells Fargo has announced it is seeking to invest up to $50 million in capital for African American Minority Depository Institutions, or MDIs, as part of its commitment to supporting economic growth in African American communities.
“MDIs are a key part of the lending ecosystem for underserved communities, playing an important role in neighborhood revitalization, and we look forward to helping African American MDIs grow,” said Jonathan Weiss, CEO of Corporate & Investment Banking and interim CEO of Wealth & Investment Management at Wells Fargo.
MDIs — often community-based banks — play an important role in providing mortgage credit, small business lending, and other banking services.
MDIs have received increased focus recently with Congresswoman Joyce Beatty and Congressman Gregory Meeks sponsoring legislation to enhance MDIs. MDIs have recently struggled to attract new capital and remain reasonably profitable, making it more challenging to achieve their mandate. The overall number of MDI charters have decreased by over 30% since 2008. Over this time, African American MDI charters in particular have declined at an even faster rate than their peers.
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With the investment, Wells Fargo aims to help stimulate economic growth and opportunities in the communities MDIs serve. The investment will contribute capital, connections, and expertise to help MDIs grow, serve their communities, and expand their sphere of influence.
“An infusion of capital in these smaller, community-based banks is truly a meaningful investment, because the ultimate beneficiaries are minority members of low- to moderate-income communities, a demographic that Wells Fargo is committed to supporting,” said Gigi Dixon, Wells Fargo’s senior director of external relations for national constituents. “Their success is tied to the success of our broader communities.”
Investing in MDIs is one more step in Wells Fargo’s long history of helping African American communities succeed financially.
This investment complements the Wells Fargo Diverse Community Capital program, a five-year, $175 million program working with Community Development Financial Institutions to empower diverse small business owners with greater access to capital and technical assistance so they can grow and sustain local jobs. The DCC program is a collaboration with Opportunity Finance Network and CDFIs across the country. To date, the CDFIs in this program have made 124,000 loans, delivered 322,000 hours of technical assistance, and benefited 49,000 small business owners who collectively sustain more than 183,000 jobs in rural and urban markets nationwide.
It also aligns with Wells Fargo’s 10-year initiative to work with the National Urban League and the National Association of Real Estate Brokers to create 250,000 African American homeowners and invest an additional $15 million in homeowner education and counseling. Wells Fargo has helped to create 42,947 African American homeowners in the first two years of the commitment with $10.6 billion in financing and provided $4.7 million in homebuyer education and counseling.