Moving the Economy Forward
Bank of America’s lending and investing initiatives are not only good business strategy; they also help to promote economic recovery.
As the U.S. economy struggles to find secure footing, Bank of America recognizes the critical role of banks in fostering economic recovery and is committed to doing its part. “Our efforts here are driven by our sense of corporate responsibility, but they are also closely aligned with our business strategy,” says Anne M. Finucane, Bank of America’s global strategy and marketing officer. “After all, a thriving economy benefits our company as well as the communities we serve.”
Bank of America’s strategic philanthropic investments are focused domestically on community development, education/workforce development and responding to critical needs. Those efforts help address three key economic issues — housing, jobs and hunger. In conjunction with charitable giving at the local and national level, the bank is helping customers with their financial difficulties and providing loans to businesses that help generate economic growth. To that end, the bank extended $557 billion in credit during 2011. In addition, employees volunteer their time and expertise to help communities thrive. “Our goal,” says Finucane, “is to be a catalyst, a facilitator, a conduit and a partner.”
Recognizing that maintaining the flow of credit for home financing is a linchpin of the housing recovery, the bank provided $151.8 billion in first mortgages in 2011, helping more than 695,000 people to purchase a home or refinance an existing mortgage, including $35 billion in mortgages to more than 237,000 low- and moderate-income (LMI) customers.
At the same time, by modifying terms, refinancing and supporting credit counseling, the bank is helping borrowers to stay in their homes and manage credit card debt. Since 2008, the bank has completed more than 1 million home loan modifications. During the fourth quarter 2011, the bank modified more than 24,000 U.S. consumer credit card and consumer unsecured loans, representing approximately $210 million in credit; on average, card customers’ monthly payments were reduced by 25%.
Small Business Lending
Credit for small businesses is another crucial component of a U.S. economic recovery, and Bank of America is committed to helping such companies weather the sluggish economy and position themselves for growth. In 2011, the bank helped U.S. small businesses operate and expand by providing $17.7 billion in new and renewed credit.
Bank of America also supported small businesses last year through the first ever loan to a Community Development Financial Institution under the U.S. Small Business Administration’s new Community Advantage Program. That included $5 million for CDC Small Business Finance, a San Diego–based organization serving small and start-up businesses throughout California, Arizona and Nevada. The bank also provided a $250,000 grant to CDC Small Business Finance to fund loan loss reserves, required under this program, as it expands its lending activities. With these investments, CDC Small Business Finance anticipates initially supporting 300 small businesses, helping retain or create approximately 700 local jobs.
Commercial and Corporate Lending
All companies need access to capital to grow their businesses and expand employment. Bank of America continues to be a leading commercial, corporate and investment bank, providing lending, investing, debt and equity underwriting and advisory services to both small and large corporations, institutional investors, financial institutions and government entities. During 2011, the bank provided $317.7 billion in commercial non–real estate loans and $36.5 billion in commercial real estate loans.
Revitalizing Communities through Nonprofit Support
Recognizing that nonprofit organizations not only provide much-needed community programs and services but also serve as economic drivers, Bank of America’s support extends beyond its philanthropic initiatives. Through lending, investing and giving, the bank supports community resources — nonprofits, government entities and significant institutions such as hospitals and colleges — that are integral to a community’s growth and development. During 2011, the bank extended more than $48.9 billion in credit to nonprofit, government and anchor institutions, in addition to providing more than $208 million in corporate philanthropy.
Transformational Financing for an Environmentally
Environmental sustainability continues to be an issue of critical importance. As part of its 10-year, $20 billion initiative to address climate change, Bank of America is helping all of its clients understand and transition to an environmentally sustainable economy. Whether it is a family or endowment that wants to direct their assets toward investments with a positive impact on the environment or providing capital to finance renewable energy, “green” buildings and clean water, we are actively working in support of a sustainable environment. Since 2007, Bank of America committed more than $17 billion toward these activities.
Community Development and Affordable Housing
In 2009, Bank of America established an ambitious 10-year, $1.5 trillion goal for community development lending and investing to support underserved communities. The bank’s loans and investments are helping to revitalize low- and moderate-income (LMI) communities by creating affordable housing and vibrant retail and commercial sites. In October 2011, the Supportive Housing Network of New York honored Bank of America as Private Sector Partner of the Year. In recent years, the bank provided $67 million in investments in the New York City area to support housing projects and continues to invest nationwide. We provided $103 million in debt and equity in the fourth quarter of 2011 to help create 368 housing units in California, New York and Washington State. During 2011, the bank extended more than $2.2 billion in Community Development Banking commercial real estate–based lending and nearly $700 million in tax credit investments (supporting low-income housing and solar energy, among other initiatives).
Socially Responsible Private Equity
The bank also routinely facilitates the flow of capital from institutional investors to underserved small businesses, including those owned by women or ethnic minorities, in LMI areas or that provide services to underserved populations. During 2011, the bank managed and advised on more than $1.2 billion in capital to small businesses fitting “underserved” categories.
All data and information in this article are from these sources:
Bank of America, Lending and Investing Update, Fourth Quarter 2011.
Bank of America, Opportunity in Motion, Corporate Social Responsibility Report 2010.