S&P Global: More banks are inking community benefits agreements after striking M&A deals

S&P Global, June 13, 2022, More banks are inking community benefits agreements after striking M&A deals

Since 2021, the National Community Reinvestment Coalition, a group that advocates for fairness in lending, has helped strike nine benefits agreements with financial institutions after working on seven such agreements from 2016 through 2020.

The coalition’s CEO, Jesse Van Tol, said he understands that banks are going to pursue M&A deals in an effort to boost their bottom lines. Van Tol said his group wants to ensure that communities do not lose access to financial services after companies are sold and consolidated.

“The reason we engage in bank mergers is to ensure that, when it comes to serving the community, that one plus one doesn’t equal less than two,” Van Tol said. “In the ideal world, one plus one should equal more than two … that they’re able to do more with the size and scale.”

Along with increased lending in certain areas, other goals the National Community Reinvestment Coalition seeks in the agreements include expanding banks’ philanthropy and diversity among staff and suppliers, according to Van Tol.

“Bank mergers are not always beneficial to communities, and that’s why we engage at that time to make sure that they are,” he said.

Print Friendly, PDF & Email

Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

Complete the form to download the full report: