Banking

Wells Fargo invests in six Black-owned banks

Wells Fargo made equity investments in six Black-owned banks as part of a broader $50 million pledge to support minority-focused lenders.

The San Francisco-based bank will assign dedicated teams to provide the lenders with financial, technology or product expertise, it said in a statement Monday. Wells Fargo didn’t disclose the amounts of each investment.

The lenders are: Broadway Federal Bank in Los Angeles; Carver Federal Savings Bank in New York; Citizens Savings Bank & Trust in Nashville, Tenn.; Commonwealth National Bank in Mobile, Ala.; M&F Bank in Durham, N.C.; and Optus Bank in Columbia, S.C.

Carver Federal Savings Bank is one of the six Black-owned banks Wells Fargo is supporting.

Bloomberg

“It’s not just: ‘OK, here’s our money, call us if you have a question,’ ” Bill Daley, vice chairman of public affairs at Wells Fargo, said in an interview. “We’ve taken our time to try to understand these institutions,” and depending on their needs, Wells Fargo will advise on areas such as digital transformation, branch access and loan origination, he said.

There will be more investments coming in future months, Daley said Monday in a separate interview on Bloomberg Television.

“These institutions, many of which have been around for over 100 years, are really vital to these communities, and if we’re going to begin to address the inequity that’s in many of our communities these institutions need to be healthier and need to be able to grow, to be more competitive,” Daley said.

Black-owned banks have dwindled since the financial crisis. Bank of America has taken equity stakes in 12 minority depository institutions, while Citigroup recruited more than a half dozen lenders to be part of a mentoring program to help them learn the ropes of underwriting bigger loans.

Corporate America is increasingly responding to the growing awareness of systemic racism in the U.S. after the killings of African Americans, including George Floyd, by police officers. While bank leaders have denounced racism and offered overtures to minority groups, critics say the industry has created and prolonged economic disparities.

Wells Fargo CEO Charlie Scharf hired Kleber Santos to lead the firm’s diversity efforts late last year as part of a push to “drive meaningful change throughout the organization and better serve our diverse customer base and underserved communities,” according to a statement at the time. Scharf came under fire in September over comments he made tying the struggle to find experienced Black executives to a limited talent pool.

The investments “reflect our dedication to helping African American communities, many of which continue to fight the destructive economic impact of the pandemic,” Santos said in the statement Monday. “Wells Fargo wants to help drive stabilization and recovery by using our financial resources and our ability to act as a partner in order to generate better outcomes.”



 

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