In an effort to boost access to commercial mortgage credit and promote economic growth for African American communities across the country, Wells Fargo has made a move to invest $50 million into African American Minority Depository Institutions (MDIs). The San Francisco-based banking company made the announcement this past Tuesday that their latest investment is part of a plan to benefit local Black banks in America providing mortgage credit, small business lending, and other banking services to Black communities.
Jonathan Weiss, CEO of corporate & investment banking and interim CEO of wealth & investment management at Wells Fargo, stated in a recent news release:
“Our industry is stronger when we work together, shepherding resources for underserved individuals and small businesses to create economic opportunities that will strengthen the long-term success of 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, serve their communities, and expand their sphere of influence by providing capital, connections and expertise.”
For years MDIs have provided financial services to minority residents living in low and moderate-income areas. The biggest challenge facing MDIs is raising capital, which threatens their ability to serve residents who don’t rely on traditional banks for services.
Wells Fargo’s investment into these programs will be a valiant effort in helping to build Black financial power. African Americans have often been disproportionately denied access to resources and tools that can help advance their wealth and lead them to economic independence. With this $50 million investment, Wells Fargo is starting a noble initiative to encourage economic inclusion and financial participation. Organizations like the NAACP have partnered with Wells Fargo in order to bring economic empowerment tools and financial literacy to African American communities in support of young Black entrepreneurs.
“We think other banks may create similar initiatives, as Citigroup did with its $150 million impact fund,” Cunningham said.
In January, Citi announced the Citi Impact Fund heralded as “the largest fund of its kind to be launched by a bank using its own capital.”
The magnitude of these types of investments has the potential to benefit the Black community in the long run. Reaching these consumers and measuring the impact of Wells Fargo’s investment will be the next steps for the major move.