The Bank of America Corp (NYSE: BAC) plans to invest $100 million in banks that concentrate on minority communities, taking equity stakes of less than 5% of each lender, the company informed on Tuesday.

The programme doubles Bank of America’s earlier pledge to invest in minority depository institutions mainly owned by minority individuals.

The country’s second-biggest lender has expanded its racial equality initiatives in the past few years, making $42.5 million in equity investments in 22 minority depository institutions, MDIs, and Community Development Financial Institutions, or CDFI. And for the smaller, the influx of deposits “expands their capacity to make loans.” D. Steve Boland, Chief administrative officer of Bank of America, informed that deposits would probably range from $1 million to $10 million. Southern Bancorp, Optus Bank, and City First Bank are lenders receiving deposits. Further, he added that MDIs are a critical resource for minority and underserved communities in providing banking services, creating jobs, and helping businesses.

Minority depository institutions, MDIs, and Community development financial institutions, or CDFIs, played a vital role in aiding small businesses in low-income and rural areas and communities of colour during the pandemic.
While other traditional banks focused on clients and larger businesses, many MDIs and CDFIs heroically mobilized to process Paycheck Protection Program loans for thousands of small businesses outside traditional banking channels.