Banking

Fifth Third commits $2.8 billion to help lift underserved communities

Fifth Third Bancorp in Cincinnati is steering $2.8 billion into programs aimed at advancing racial equity in the United States.

As part of its three-year commitment, the $202 billion-asset company announced this week that it will launch an application process across its 11-state territory in which underserved communities will compete for long-term investments from Fifth Third. The bank says it will award the funds to at least five communities of color.

It also plans to increase mortgage lending by 31%, boost small-business lending by 25% in majority-minority communities and locate one-quarter of all new branches in minority-dominated communities and low- and moderate-income neighborhoods.

As part of its $2.8 billion commitment, Fifth Third will make long-term investments in at least five underserved communities.

Bloomberg

Fifth Third joins a growing list of large and midsize banks making similar pledges in response to this year’s civil unrest over racial inequality and the coronavirus pandemic’s outsize impact on minority communities. Like others, Fifth Third is directing most of the dollars — in this case, $2.2 billion or 79% of the total dollars pledged — into lending opportunities. The rest of the money will go toward community investments, financial accessibility and education, social justice programs and advocacy efforts, all with a goal of helping to close the racial wealth gap.

“As we continue to make meaningful strides in advancing inclusion and diversity in our industry and in our communities, Fifth Third is committed to maintaining and extending its leadership and making a difference for our Black customers, communities and employees,” Chairman and CEO Greg Carmichael said in a news release. “The dedicated investment, philanthropy and lending efforts will help accelerate our progress toward promoting equality, equity and inclusion, both within the bank and in our communities.

Other banks that made similar commitments this year include: Bank of America, which pledged $1 billion over four years; U.S. Bancorp, which committed $116 million this year; PNC Financial Services Group, which said it would spend more than $1 billion; Huntington Bancshares, which pledged $20 billion over five years; and BMO Financial, which pledged $5.1 billion over five years.

JPMorgan Chase has announced the largest commitment to date — $30 billion over five years.

Fifth Third said it would continue to invest in community development financial institutions, or CDFIs, which help get funding into underbanked communities; increase spending with Black-owned suppliers as part of its supplier diversity program; and keep working to make sure its workforce is diverse and inclusive. Recently the bank announced six workforce and diverse-supplier goals to be achieved by 2025, including growing leadership roles at each management level for women and people of color, increasing supply diversity spending to 10% and completing unconscious bias awareness training for all employees.

The bank said the awareness training goal was achieved this year.



 

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