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NEW YORK — Bank of America Corp plans to invest $100 million in banks that focus on minority communities, taking equity stakes of less than 5% of each lender, the company said on Tuesday.
The program doubles Bank of America’s earlier pledge to invest in minority depository institutions, or MDIs, that are mostly owned by minority individuals. The second-biggest U.S. lender has expanded its racial equality initiatives in recent years, making $42.5 million in equity investments in 22 MDIs and Community Development Financial Institutions.
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For the smaller lenders, the influx of deposits “expands their capacity to make loans,” D. Steve Boland, Bank of America’s chief administrative officer, said in an interview. “What we would hope is our example draws in others” to make similar moves, he said.
The deposits will probably range from $1 million to $10 million, Boland said. Optus Bank, Southern Bancorp and City First Bank are among the lenders that will receive deposits.
“MDIs are a critical resource to minority and underserved communities,” providing banking services, creating jobs and helping businesses, Boland said separately in a statement. (Reporting by Lananh Nguyen; Editing by Muralikumar Anantharaman)
