The U.S. Treasury Has Allocated $180 Million to be Invested in Beneficial State Bancorp to Scale the Bank’s Services to Marginalized Communities
Dec 21, 2021
Beneficial State Bank, a mission-driven community bank and certified B Corp serving California, Oregon, and Washington, is eligible to receive an equity investment of up to $180 million from the U.S. Treasury to support its ongoing commitment to serving marginalized communities.
Dec. 21, 2021, Oakland, Calif. – Beneficial State Bank was allocated an equity investment of up to $180 million from the U.S. Treasury’s Emergency Capital Investment Program (ECIP) to continue its lending to small businesses, low-and moderate-income consumers, and other communities disproportionately impacted by the economic distress stemming from the COVID-19 pandemic. Announced by Vice President Kamala Harris and United States Treasury Secretary Janet Yellen, the investment comes as part of an $8.7 billion investment in 186 community financial institutions.
The ECIP program allocated equity capital to community financial institutions based on their history of lending to underserved communities, community engagement activities, and their investment plan. This program was created to help communities hit hardest by the economic distress caused by the Covid-19 pandemic and can be used in many ways. Beneficial State Bank will use these funds to scale the positive impact in the communities they serve. The capital transaction is expected to close in early 2022, with the bank deploying funds through 2025.
“Serving low-income communities is an essential part of our work,” said Beneficial State Bank CEO Randell Leach. “These funds will allow us to have an even greater impact in the communities we serve. This also represents a historic milestone for the company as the allocation will more than double the bank’s capital. For a mission-driven bank, this will allow us to scale our lending practices and banking services to those who need it. This is the beginning of our next chapter of leveraging banking as a force for good.”
Beneficial State Bank will use the funds to continue serving marginalized communities as well as expand into new products and partnerships. This will include 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 entities. 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, or private prisons. As of December 2020, the bank had nearly $1 billion in mission-aligned loans outstanding, including $275 million in affordable housing and $67 million in economic, business, and job development categories.
“We’re thrilled to see that the U.S. Treasury is investing in communities that face significant barriers in our economy, and are proud to be part of this historic deployment of capital,” Leach said. “Our hope is that this investment will have a lasting impact in these communities and incentivize mission-driven and community-focused banking throughout the industry.”
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, which involves serving its communities, supporting positive environmental outcomes, and achieving long-term financial sustainability. A unique ownership structure supports these strategic priorities: the bank’s capital is majority-owned by the nonprofit Beneficial State Foundation. This means its economic rights are fully aligned with, and 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), Fossil Free Certified, and one of the world’s top-rated Certified B Corporations, awarded B Corp "Best for the World" status every year since 2013.
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