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Jun 09, 2022 |
Press Release: Beneficial State Bank Receives $218M Equity Investment from U.S. Treasury to Scale Financial Access in Low-Income and Underserved Communities
This new capital will enable Beneficial State Bank to grow its lending and other financial services in marginalized communities by up to threefold, while demonstrating that socially responsible banking is essential to a sustainable and inclusive economy.
June 9, 2022, Oakland, Calif. – Mission-driven Beneficial State Bank has closed on an equity investment of $218 million from the U.S. Treasury’s Emergency Capital Investment Program (ECIP), which will support expanded lending to small businesses, low- and moderate-income consumers, and other communities disproportionately impacted by the economic distress stemming from the COVID-19 pandemic. This financing will enable potential growth from $1.5 billion to $4 billion-plus in assets, allowing the bank to help more people with its Beneficial Banking(™) services.
Announced by Vice President Kamala Harris and United States Treasury Secretary Janet Yellen, ECIP is investing $8.7 billion in almost 200 community financial institutions based on their proven track record of lending to underserved communities, community engagement activities, and their investment plan. Beneficial State Bank will use these new funds to scale its positive impact in the communities it serves.
“The economic ripple effects of COVID-19 continue, especially in communities that have long been neglected by the financial sector,” said Beneficial State Bank CEO Randell Leach. “This investment will allow us to finance even more small businesses, support nonprofits providing critical services to our communities, and help families bank on their future. With this funding, we have an opportunity to triple our impact in the years ahead, in pursuit of our vision of banking that helps restore our planet and extend prosperity to all.”
Beneficial State Bank will use the funds to build its capacity to continue serving marginalized communities, and potentially expand into new products and partnerships that would support its mission. This includes low-income community outreach, minority-owned small business lending, financing of affordable housing projects, nonprofit organization lending, consumer lending to those typically lacking access to credit, and other community and social services.
Beneficial State Bank’s triple-bottom-line business goals include a pro-planet and community portfolio lending target of 75% or more of all loans and loan dollars to mission-aligned purposes. The remaining 25% of loans cannot work against the bank’s mission. For instance, the bank does not lend to fossil fuel companies, payday lenders, weapons suppliers or manufacturers, or private prisons. As of December 2021, the bank had nearly $800 million in mission-aligned loans outstanding, including $286 million in affordable housing and $67 million in economic, business, and job development categories.
“The last two years have shown the vital role that community financial institutions and values-based banks play in expanding access to finance across the nation,” Leach said. “This new financing not only will help Beneficial State Bank grow our services — it’s also validation that our style of mission-driven and community-focused banking is the future.”
About Beneficial State Bank
Beneficial State Bank (Beneficial State) is a state-chartered, federally insured bank with branches in California, Oregon and Washington. Beneficial State serves the triple bottom line of people, planet, and prosperity for all. The bank’s unique ownership structure supports these strategic priorities. Its economic rights are fully aligned with the public interest — the bank’s capital is majority-owned by the U.S. Treasury and nonprofit Beneficial State Foundation, both of which are permanently governed in the public interest.
Beneficial State Bank is a founding signatory of the UN’s Principles for Responsible Banking, a member of the Global Alliance for Banking on Values, a Community Development Financial Institution (CDFI), and one of the world’s top-rated Certified B Corporations, awarded B Corp "Best for the World" status every year since 2012. Visit beneficialstate.com to learn more. Member FDIC Insured, Equal Housing Lender.
Kristin Williams - email@example.com - 617-794-4525