Nashville, TN (TN Tribune)—Wells Fargo is making capital investments in six black-owned banks across the county including North Nashville-based Citizens Savings Bank & Trust.
Wells Fargo has announced investments in the following institutions:
- Broadway Federal Bank, in Los Angeles, California
- Carver Federal Savings Bank, in New York, New York
- Citizens Savings Bank & Trust, in Nashville, Tennessee
- Commonwealth National Bank, in Mobile, Alabama
- M&F Bank, in Durham, North Carolina
- Optus Bank, in Columbia, South Carolina
Others are expected to join the list further in 2021.
In addition to the capital investments, Wells Fargo banking teams will be working with MDIs to provide financial, technological, and product development expertise.
The recent equity investments in African American MDIs are part of Wells Fargo’s pledge to invest up to $50 million in Black-owned banks.
“This is not a ‘check-the-box’ investment,” said Jonathan Jacob, senior vice president of Wells Fargo Corporate Development. “Evaluation of these investments includes collaboration with senior management to identify ways that we can deliver the capabilities of Wells Fargo to address the MDIs’ key strategic priorities. We’re very grateful that their leadership teams have dedicated a lot of time and energy with us to make sure we are finding the most appropriate and sustainable forms of investment.”
Small, local banks with aspirations to drive wealth and build up neighborhoods populated by people of color started appearing across the U.S. in the 1900s. Often founded by visionary and civic-minded people focused on the best economic interests of their communities, these banks are now known as Minority Depository Institutions or MDIs.
Although African American banks have proliferated at several points in history, they have also struggled disproportionately due to recessions and other impacts, not unlike the people within the low- and moderate-income neighborhoods they serve. According to a Federal Deposit Insurance Corporation MDI Study, from 2001 to 2018, the number of African American MDIs declined by more than half.
From a height of more than 100 Black-owned banks, only about 20 exist now.
In recent months, a growing movement to bank with Black-owned financial institutions has taken hold, with promotion of MDIs coming from places as disparate as the FDIC and the rap music industry.
From within the banking industry, Wells Fargo has been a leader in empowering MDIs. The company is taking a strategic approach by infusing Black-owned MDIs with equity investments. In addition to the capital investments, Wells Fargo banking teams will be working with MDIs to provide financial, technological, and product development expertise.
“MDIs are a viable and very important sector of the banking industry that can directly support the financial health of communities where typically there are gaps in banking services,” said Gigi Dixon, head of External Engagement for Wells Fargo’s Diverse Segments, Representation & Inclusion group. “By working together with MDIs, Wells Fargo can address some of the issues where these banks are located and help reach the unbanked. These investments will complement our community development efforts while positively impacting people in many communities we serve.”