Bank of America announced May 19 that it provided $168.5 billion in community development loans and investments in 2010, benefitting low- and moderate-income (LMI), minority and underserved customers and communities. This capital translates, on average, to approximately $661 million every business day throughout the past year and continues the progress against a 10-year, $1.5 trillion community development goal Bank of America initiated in 2009. Despite adverse economic conditions, the company exceeded the annual run-rate in both 2009 and 2010, providing nearly $337 billion toward the 10-year goal.
“One of the keys to our nation’s economic recovery is strengthening our underserved communities and customers with direct capital investment,” said Andrew D. Plepler, Bank of America’s Global Corporate Social Responsibility and Consumer Policy executive. “By working with neighborhood partners across the country to bring funding and resources to bear locally, Bank of America was able to once again exceed its community development goals and continue the momentum that leads to greater economic opportunity and job creation.”
The $1.5 trillion goal is the largest of its kind ever established by a U.S. financial institution. It tracks lending and investments across four key community development categories: affordable housing, small business, consumer lending and economic development.
Second-year lending and investing results include:
- Affordable Housing, $151 billion: This includes single family mortgages to LMI and minority families; loan modifications to existing mortgages; and financing for predevelopment, construction, and term- and equity-financing for single- and multi-family housing that are affordably priced or located in designated LMI communities.
- Small Business, $11 billion: This includes conventional small business loans, loans and lines of credit for companies located in designated LMI communities; small business loan modifications; funding to small business investment companies (SBICs) and minority and inner-city business venture capital funds.
- Consumer Lending, $3 billion: This includes the full range of consumer financial services for low- and moderate-income individuals and families, such as auto loans and personal loans and lines of credit. Credit card borrowings are not included.
- Economic Development, $3 billion: This includes investments in nonprofit lenders such as Community Development Financial Institutions (CDFIs), Community Development Corporations (CDCs), financial intermediaries and tax-exempt entities for lending and direct investments that promote neighborhood revitalization in communities designated as LMI, urban, rural and Native American.
“Bank of America understands that increased job creation through stronger small businesses is key to our economic recovery, and has put resources and expertise behind this,” said Bob Davenport, Chairman, Grow America Fund. “Through investments, loan repurchases and strategic grants to CDFI small business lenders and microlenders, Bank of America helps bring lending capital directly to the small business segment that needs it most. Grow America recognizes the tremendous efforts Bank of America has led in funding underserved business communities across the country.”
The goal also contains a dedicated commitment for underserved rural and Native American communities of $50 billion over the same period. In 2010, the bank achieved $7.4 billion in loans and investments, for a two-year total of $15.2 billion toward that goal.
Hundreds of individual loans and investments in nearly every state and major metropolitan area across the country contribute to Bank of America’s community development goal. Examples include:
- Nearly $48 million in financing and equity investments to national nonprofit developer Mercy Housing to renovate two properties in Chicago. In addition, Bank of America Merrill Lynch served as underwriter and marketer of $33 million in tax exempt bonds issued by the City of Chicago to finance the project that will provide nearly 275 units of affordable housing and on-site social services such as employment training and mental health services to low-income residents.
- Increased to $14 million funding to the Grow America Fund, a national CDFI and Small Business Administration lender providing loans to small businesses in underserved communities. Bank of America’s most recent capital provided funding for loans in Los Angeles, Seattle and Cleveland.
- More than $20 million in financing and equity investments to LINC Housing Corporation for the Seasons at Compton, an 84-unit affordable senior housing development with features and services to support senior citizens with developmental disabilities and those caring for a developmentally disabled family member. Located south of Los Angeles on three acres, the Seasons will include 11 new residential buildings, a new community center, green space and an onsite support services program supporting residents, nearby senior centers, healthcare providers and other agencies.
- $13 million in credit to national nonprofit ROC USA Capital, including a $10 million revolving line of credit for short-term liquidity needs and a $3 million Program Related Investment to meet longer term capital requirements. ROC USA Capital provides financing to residents of manufactured home communities to purchase the land underneath their homes from private community owners. Bank of America financing enabled ROC USA to lend to seven manufactured home communities with 420 homes in five states.