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Wells Fargo announced Monday its final investments in two of 13 African-American Minority Depository Institutions (MDIs): Industrial Bank of Washington, D.C. and The Harbor Bank of Maryland. By making these last two equity capital investments, the company has fulfilled its March 10, 2020, announcement to commit $50 million to Black-owned banks in communities across the country.
“It means a lot for these institutions that represent legacy in the Black community,” said Gigi Dixon, head of External Engagement for Diverse Segments, Representation and Inclusion at Wells Fargo. “Our goal is to help drive them forward very significantly so that there is a long-term impact in the communities they serve.”
As part of the investment, Wells Fargo is offering access to a dedicated relationship team that can work with each Black-owned bank on financial, technological and product development strategies to help each institution strengthen and grow. In addition, Wells Fargo will be making its nationwide ATM network available for customers of these 13 MDIs to use without incurring fees.
“Several of these banks have been around for a very long time, some over 100 years,” Dixon said, “and they were established at a time, quite frankly, when Black people didn’t have access to banking. So, when we look across the landscape, and we understand that disproportionately Black Americans in Black communities have a lack of access to capital, and small and minority small businesses disproportionately lack access to capital, these Black banks serve as another platform for providing that access in a responsible and meaningful way.”
Doyle Mitchell Jr., president and CEO of Industrial Bank, follows in the footsteps of his father and grandfather who founded the bank in 1934 with just six employees and $192,000 in assets. Eighty-six years later, Industrial Bank has six locations, over 140 employees and more than $550 million in assets.
“Industrial Bank is excited to partner with Wells Fargo in expanding these efforts,” Mitchell said. “Being one of only 20 African-American banks in the country, this partnership will enhance our ability to grow and create more opportunities to provide capital to those communities we support. We appreciate Wells Fargo for its commitment to invest in minority institutions and partnering to alleviate the negative impact of financial inequalities on communities of color and closing the racial wealth gap.”
Wells Fargo also made investments in the following MDIs: City First Bank, in Los Angeles, California; Carver Federal Savings Bank, in New York, New York; Carver State Bank, in Savannah, Georgia; Citizens Trust Bank, in Atlanta, Georgia; Citizens Savings Bank & Trust, in Nashville, Tennessee; Commonwealth National Bank, in Mobile, Alabama; First Independence Bank, in Detroit, Michigan; Liberty Bank, in New Orleans, Louisiana; M&F Bank, in Durham, North Carolina; Optus Bank, in Columbia, South Carolina; and Unity National Bank, in Houston, Texas.
Dixon said the bank’s new leadership clearly understood that the institution needed to find a way to “get it right” following the backlash from scandals and other legal troubles over the years. “Our goal is not to necessarily do something to make up for what was done but to provide excellent financial services for the communities we serve.”
The incidents of last year including the COVID-19 pandemic and the killing of George Floyd, Dixon said, “meant we needed to double down even more.” She named the Wells Fargo Open for Business Fund for minority-owned businesses and the Our Money Matters initiative launched at HBCUs as examples of efforts “not to make amends but efforts to be a responsible banking institution that is serving its community and its constituents in meaningful gives people the means to have financial success.”
Dixon said Wells Fargo worked closely with the National Bankers Association to make the opportunity available to its members. The NBA, founded in 1927, and recognized as the voice of minority banking, is chaired by Robert E. James, II, who said, “Wells Fargo has honored their commitment to make meaningful capital investments in Black banks, and they have further extended their resources to help the banks effectively deploy this new capital to the benefit of historically underserved communities.”
Wells Fargo’s investments, primarily non-voting positions, are designed to enable the banks to maintain their MDI status through a banking relationship in the form of a single touchpoint coverage model that will help them access Wells Fargo’s expertise and pursue strategic priorities like entering new markets, expanding locations, designing new products and hiring staff to support loan growth.