By: Ken Chase.
In a press release on May 9, U.S. Bancorp unveiled a proposed community benefits plan (CPB) intended to enhance and support capital access in low and moderate-income communities. According to U.S. Bank, the plan has been developed in coordination with the California Reinvestment Coalition (CRC) and the National Community Reinvestment Coalition (NCRC) and is part of the bank’s planned acquisition of MUFG Union Bank.
The new commitment will expand U.S. Bank’s previous commitments to increasing equitable access to capital in underserved communities and is designed to integrate with MUFG Union’s existing efforts in that area. The CPB commitments are apparently contingent on the success of the merger and conversion of the two banks’ systems and staffing to a unified platform.
The CRC and NCRC had both expressed skepticism about the acquisition to the Federal Reserve and Office of the Comptroller of the Currency when it was first proposed. The groups asserted that U.S. Bank’s planned merger would negatively impact rural, low-income, and minority borrowers. To counteract that alleged harm, they asked the bank to create a plan that would help to minimize bank branch closures while increasing support for local investment.
U.S. Bank then engaged in listening sessions with 208 community organizations, as well as a public hearing that was organized by government regulators. The bank used that feedback to create a plan that will focus investment in key areas of economic development within the target communities, including capital and technical assistance access for small business, increased access to homeownership, branch services in California – where about 60 percent of the committed funds will be focused, and expanded focus on building an even more diverse workforce.
U.S. Bank President and CEO, Andy Cecere, expressed gratitude to the groups that participated in the listening sessions, and said that he looked forward to continuing the bank’s collaboration with them and other community leaders as they worked to provide solutions for the communities they serve. He also expressed hope that their combined efforts could have lasting positive impacts on those communities:
“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 (LMI) communities and communities of color to access capital and build wealth. Our CBP is outcome-focused and blends the best programs and thinking of U.S. Bank and MUFG Union Bank. We want our actions today to create a ripple effect that will lift future generations.”
Meanwhile, the acquisition still awaits approval from federal regulators. Though the two parties had initially said that they thought the deal could be completed before the middle of 2022, a U.S. bank regulatory filing in early May suggested that it may take longer than first expected.