Citi’s $1 Billion Action for Racial Equity Initiative Demonstrates Early Results in the Fight to Address the Racial Wealth Gap
Collaborating with the Cities of
There is clear momentum behind this work across Citi to address the barriers that impede communities of color from building generational wealth. Among the progress detailed below, Citi is more than half of the way to its
“Action for Racial Equity was meant to be a three-year goal, but our teams have matched the urgency these issues deserve, making incredible progress towards that goal in just over six months,” said
“The financial inequality and other systemic problems people of color face will not go away until we confront them head on – and that’s what we’re working towards here at Citi,”
“Equity investments are critical to our community impact but Citi is much more than an investor in
“Children have unlimited potential, and the last thing that should hold them back is the future cost of education,” said
“Affordable and safe bank accounts are essential for Black households working to build financial security, and we are excited to participate in the new Citi Affordable Access Banking Initiative,” said
"At MoCaFi, our work is focused on closing the wealth gap and reimagining how financial services can transform communities into places where everyone can thrive regardless of socio-economic status,” said
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
What Citi has done so far:
Launched a comprehensive approach to collaborating with Minority Depository Institutions (MDIs), providing equity investments and curated engagement through revenue generating and capacity building opportunities that support sustainable growth.
As part Citi’s
$100 milliongoal in support of MDI growth and revenue generation, allocating nearly $50 millionin growth capital to MDIs to strengthen their ability to serve racially diverse households and entrepreneurs. To date, Citi has made equity investments in the following MDIs: Broadway Financial Corporation, Citizens Trust Bank, Mechanics & Farmers Bank, OneUnited Bank, Optus Bank, and Unity National Bank of Houstonwith legal pro bono advice provided by Paul, Weiss, Rifkind, Wharton & Garrison LLP.
$15 millionout of $50 millionin affordable housing loan participation opportunities for MDIs to generate revenue and build their capacity to invest in larger transactions.
Through collaboration with Deloitte and the
National Bankers Association– Citi established a technical assistance program to support MDIs’ talent development, enhance technology, and expand business networks.
Expanded access to Citi products and platforms in collaboration with community and municipal partners to support communities of color.
Launched a collaboration with the
National Urban League toserve Black households by expanding access to the Citi® Access Account Package that includes low-cost savings and checking products with Urban Leagueaffiliates in Philadelphia, PA; Seattle, WA; Hampton Roads, VA; and St. Louis, MO.
Signed a contract with the
City of Los Angelesto launch a school-based children’s savings program called Opportunity LA, which will provide no-cost college savings accounts for students in LA’s Unified Schooldistrict.
Collaborated with the
City of San Joseto provide no-cost college savings accounts for local public schools through the Citi Start Saving® platform as part of San Jose Aspires.
GOAL #2: INVEST IN BLACK ENTREPRENEURSHIP
What Citi has done so far:
As part of Citi’s commitment of
$50 millionin additional impact investing capital for Black entrepreneurs, 6 of the first 16 Citi Impact Fundinvestments were directed to Black founders, accounting for 18% of the Fund’s equity invested to date.
$875 millionwith diverse suppliers in 2020, including $354 millionwith Black-owned businesses alone. On track to increase Citi business procurement spend with certified diverse suppliers to $1 billionannually by 2023.
GOAL #3: INVEST IN AFFORDABLE HOUSING AND PROMOTE THE GROWTH OF BLACK HOMEOWNERSHIP
What Citi has done so far:
As part of Citi’s
$550 milliongoal to support homeownership for people of color and affordable housing by minority developers, in final stages of committing $200 millionof equity to the preservation of affordable and workforce housing projects that will be co-managed by five Black investment managers. The co-managers were sourced by Citi Community Capitalthrough a competitive RFP process and selected by an expert advisory committee.
Despite Action for Racial Equity’s significant progress, there are other challenges that still require attention, especially in homeownership. While the rate of Citi mortgage applications and originations rose last year among Asian homeowners, it declined for Black and Hispanic consumers. Citi is committed to addressing this decline by expanding its community lending team and resources to support Black and Hispanic homeownership across the
In addition to the previously announced plan to expand the
U.S.Consumer Bank’s community lending team and its network of correspondent lenders to support Black and Hispanic homeownership, Citi continues to invest in its digital mortgage capabilities to better reach all communities, including underserved markets.
Citi is expanding Community Lending products and programs, while leveraging its mortgage portfolio and capital to further enable homeownership. This includes Citi’s HomeRun program, which requires low down payments and removes mortgage insurance requirements for eligible borrowers with low to moderate incomes, and its Lender Paid Assistance program, which provides eligible homebuyers a credit of up to
$5,000to lower closing costs to make buying a home more affordable.
Citi is continuing to strengthen relationships with homeownership counseling groups, such as
HomeFree-USA, and is participating as a member of the Office of the Comptroller of the Currency’s Project REACh Homeownership workstream to promote financial inclusion through greater access to credit and capital.
GOAL #4: STRENGTHEN CITI’S POLICIES AND PRACTICES IN ORDER TO BECOME AN ANTI-RACIST INSTITUTION
What Citi has done so far:
Issued first affordable housing bond with a notional value of
$2.5 billion, the largest-ever social bond from an issuer in the private sector. Citi utilized a syndicate of minority and women owned broker dealers, with Black-owned broker-dealers comprising 75% of the joint-lead managers. The use of proceeds from the bond will finance the construction, rehabilitation and preservation of quality affordable housing for low-and moderate-income populations in the U.S.
$2.5 billionbond with an underwriting syndicate exclusively comprised of Black-owned broker-dealers, reinforcing the firm’s commitment to increasing racial equity in the capital markets and broader financial services industry.
- Piloted a municipal finance modeling training program, in collaboration with Citi and minority-owned, municipal broker-dealers and advisors, to support talent development, promote networking, and deliver access to industry-leading bankers in the field.
To date, a majority of Citi’s law firm partners in the
U.S.have volunteered to participate in the bank’s efforts to increase representation of diverse attorneys on Citi matters.
- Successfully updated the Citi Environmental and Social Risk Management Policy for project-related financing to strengthen due diligence processes for environmental justice and social impacts on communities of color.
In addition to Citi’s business initiatives, the
“The Joint Center’s Data for Black America project aims to help public and private sector decision-makers better understand the needs of Black communities,” said
Citi and the Citi Foundation’s progress toward their Action for Racial Equity goals are part of the following resources committed through the end of 2023:
$550 millionto support homeownership for people of color and affordable housing by minority developers
$350 millionin procurement opportunities for Black-owned business suppliers
$50 millionin additional impact investing capital for Black entrepreneurs
$100 millionto support Minority Depository Institutions’ (MDI) growth and revenue generation
$100 millionin Citi Foundationgrants to support community change agents addressing racial equity
To further its commitment, Citi has engaged in public-private collaborations that aim to help address racial equity. In December, Citi was one of the first institutions to sign the Office of the Comptroller of the Currency’s Project REACh Pledge to promote the vitality of Minority Depository Institutions and homeownership. Most recently, Citi signed on to the Corporate Call to Action:
For more information on Action for Racial Equity, and the ways in which we’re expanding and deepening our strategic initiatives, visit:
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
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