U.S. Bank Aims to Build Wealth Among Black Americans
The death of George Floyd on May 25 in Minneapolis police custody forced Americans to examine racial equity gaps, particularly among Black people.
U.S. Bank, which pledged in June to provide $100 million a year in additional capital to African American owned and led businesses or organizations, announced a comprehensive plan Wednesday to help Black families build wealth.
The U.S. Bank Access Commitment is targeted to “diverse communities,” but the Minneapolis-based bank says it will initially place an emphasis on wealth building among Blacks.
“We believe access to capital for minority small business, housing and homeownership, and workforce advancement creates opportunities for systemic change,” U.S. Bank CEO Andy Cecere said in a prepared statement. “We are committed to be part of the solution.”
The bank’s leaders intend to pursue a series of initiatives in 2021 and beyond that address three areas.
Business support: A new $25 million microbusiness fund will provide grants and make investments in businesses owned by women of color.
Funding for this effort is coming from the U.S. Bank Foundation and the U.S. Bancorp Community Development Corp. The latter will provide $20 million in debt capital to Black-led and women-focused community development financial institutions, known as CDFIs. The remaining $5 million from the foundation will be awarded as grants, and used to support expansion, capacity building, technical assistance, mentoring, and networking.
As a large corporation, U.S. Bank can make a difference by choosing to do business with more companies led by people of color. The bank reported Wednesday that it’s on track to meet its goal of doubling its business relationships with Black-owned suppliers. U.S. Bank also is expanding global trade financing to diverse businesses.
Wealth building: Among its efforts to build wealth is the DREAM (Delivering Resources that Enable Access to Mortgage) Initiative. U.S. Bank aims to boost Black homeownership and also increase the number of people from underrepresented communities working as mortgage loan officers.
U.S. Bank recently made an equity investment in Goalsetter, which is a Black-owned finance app that focuses on financial literacy for American children and teens. After surveying minority communities on their needs, U.S. Bank is currently developing other responses to expand wealth building efforts.
In a recent TCB interview, Greg Cunningham, U.S. Bank’s chief diversity officer, said, “The two fundamental things that drive wealth are small businesses and homeownership. Owning a home is a path to self-respect and self-worth, and it’s the most efficient way to build wealth and pass it along.”
Only one in four Black households own their homes in Minnesota, in contrast to 77 percent of white households, according to Minnesota Compass.
Career opportunities: U.S. Bank is taking multiple steps to increase hiring and promotions of people of color.
“The company offers leadership development for all employees and will expand opportunities for both early- and mid-career employees and Black executives in partnership with the McKinsey Black Leadership Academy,” the bank said in a Wednesday statement.
U.S. Bank also has overhauled its hiring practices to ensure diverse candidate slates. For each job opening, at least one woman or person of color will be interviewed.
In the past month, U.S. Bank announced the selection of people for three prominent roles. All of the new leaders are Black.
In late January, U.S. Bancorp reported that Kimberly Ellison-Taylor had been elected to the board of directors. She is executive director of finance thought leadership for Oracle Corp.
The bank issued news releases this month on two external hires, both Black men.
Scott Ford was hired to become president of Wealth Management Affluent. He previously served as a wealth management regional director for JP Morgan Chase. He also has held a leadership position within Citibank.
Marcus Martin was appointed managing director and head of U.S. Bank’s Environmental, Social and Governance (ESG) for its Fixed Income and Capital Markets business. Martin has 20 years of industry experience, including six years as the founder and CEO of Global Oak Capital Markets.