Citi Launches More Than $1 Billion in Strategic Initiatives to Help Close the Racial Wealth Gap
NEW YORK--(BUSINESS WIRE)--Citi and the Citi Foundation today announced more than $1 billion in strategic initiatives to help close the racial wealth gap and increase economic mobility in the United States. Citi’s Action for Racial Equity is a comprehensive approach to 1) providing greater access to banking and credit in communities of color, 2) increasing investment in Black-owned businesses, 3) expanding homeownership among Black Americans, and 4) advancing anti-racist practices in the financial services industry.
To support these goals, Citi core businesses as well as the Citi Foundation are committing the following resources over the next three years:
- $550 million to support homeownership for people of color and affordable housing by minority developers
- $350 million in procurement opportunities for Black-owned business suppliers
- $50 million in additional impact investing capital for Black entrepreneurs
- $100 million to support Minority Depository Institutions’ growth and revenue generation
- $100 million in Citi Foundation grants to support community change agents addressing racial equity
“Addressing racism and closing the racial wealth gap is the most critical challenge we face in creating a fair and inclusive society and we know that more of the same won’t do,” said Citi CEO Michael Corbat. “We are bringing together all the capabilities of our institution – our people, our lines of business, our balance sheet, and our philanthropy – like never before to combat the impact of racism in our economy. This is a moment to stand up and be counted, and Citi is committed to leading the way and investing in communities of color to build wealth and strong financial futures.”
According to the recently published Citi GPS report “Closing the Racial Inequality Gaps,” if the U.S. had closed key racial gaps for Black Americans in wages, housing, education and investment 20 years ago, $16 trillion could have been added to the U.S. economy. If these gaps are closed today, $5 trillion could be added to U.S. GDP over the next five years.
“We are in the midst of a national reckoning on race and words are not enough. We need awareness, education, and action that drive results,” said Mark Mason, Citi’s CFO and one of the industry’s most senior Black executives. “The commitments we are announcing today are just the starting point. By harnessing the central role Citi plays in local economies and the financial lives of Americans, we are determined to help close the racial wealth gap and help build an anti-racist economy and society.”
As part of Action for Racial Equity, Citi’s businesses are focused on four key outcomes:
GOAL #1: EXPAND BANKING AND ACCESS TO CREDIT IN COMMUNITIES OF COLOR
Why it matters:
Many communities of color lack access to traditional banking services that are the foundation of financial stability and thriving communities. Economic security is also hampered by insufficient access to credit, which makes it hard to qualify for affordable mortgages and small business loans.
What Citi will do:
- Provide Minority Depository Institutions (MDIs) with up to $50 million in growth capital to strengthen their ability to serve racially diverse households and entrepreneurs.
- Generate revenue for MDIs by inviting them into up to $50 million in loan participation opportunities between the Citi Community Capital division in the Institutional Clients Group and its clients to finance affordable multi-family rental housing.
- Provide pro-bono technical assistance and training to MDIs – through a collaboration with Deloitte and others – to help MDIs navigate the changing economy, improve operational efficiencies and support talent development.
- Partner with community organizations serving racially diverse households through Citi’s U.S. Consumer Bank to expand access to the Citi® Access Account Package, which includes low-cost checking and savings products and new digital financial education.
- Alleviate one of the biggest barriers to banking by expanding the Citi ATM Community Network program that removes out-of-network fees at Citibank ATMs for customers of participating minority-owned banks and community development credit unions. Since 2016, Citi’s U.S. Consumer Bank has removed these fees for 440,000 customers of 28 institutions.
- Put 1 million youth on the path to higher education by expanding the Citi Start Saving® platform – which initially was developed to power the City and County of San Francisco’s children’s savings program.
GOAL #2: INVEST IN BLACK ENTREPRENEURSHIP
Why it matters:
Black-owned businesses have long faced obstacles in obtaining loans. They are the most likely to apply for bank financing, but get turned down at twice the rate as white business owners. This financing gap is especially pronounced in the start-up world, where studies show that Black entrepreneurs receive only 1% of venture capital funding.
What Citi will do:
- Allocate an additional $50 million to the Citi Impact Fund exclusively to support businesses owned by Black entrepreneurs. Citi kicked off the fund in January with $150 million in capital for businesses that are developing solutions to social and environmental challenges.
- Increase Citi business procurement spend with certified diverse suppliers from $700 million to $1 billion annually, including $250 million with Black-owned firms.
- Launch a new program called Citi Start CreditSM, which will work with Community Development Financial Institutions (CDFIs) to help underserved entrepreneurs increase their credit scores and access more affordable credit...