Five-year plan includes a $16 billion commitment for California communities.

 

Nov. 28, 2022 – The California Reinvestment Coalition (CRC), the National Community Reinvestment Coalition (NCRC) and BMO Harris Bank today announced a more than $40 billion Community Benefits Plan U.S. communities, which includes a more than $16 billion commitment for California. This plan, which is one of the largest of its kind relative to BMO’s size post-closing, outlines commitments to local communities across BMO’s expanded footprint in the United States after the approval and closing of its proposed acquisition of Bank of the West, announced on Dec. 20, 2021. The acquisition remains subject to regulatory approval and other customary closing conditions.

The five-year plan was developed with input from over 85 community groups from across the country through listening sessions facilitated by the National Community Reinvestment Coalition (NCRC) and CRC, the Alliance to Close the Racial Wealth Gap, a public meeting and written comments submitted to regulators. The plan reinforces BMO’s focus on increasing home ownership and supporting the growth of small businesses in low- to moderate-income (LMI) neighborhoods and communities of color. It also strengthens these communities through investments and lending to support affordable housing and economic development as well as philanthropic giving.

“We commend BMO leadership for its collaboration with the California Reinvestment Coalition (CRC) and its members over the last several months to put together an agreement that reflects the needs of the California communities that have been historically harmed by bank mergers,” said Paulina Gonzalez-Brito, CRC CEO. “Mergers must provide a clear public benefit. This agreement accomplishes this through increased investment and services in LMI communities and communities of color and increased lending to BIPOC-owned small businesses. We look forward to seeing how this agreement is implemented over the next five years.”

“BMO’s commitment to work together with us and leading community groups was vital to creating a plan that drives significant impact to the communities served,” said Jesse Van Tol, President and CEO, NCRC. “This community benefits plan is a substantial move in the right direction by addressing racial equity and access to capital in specific and tangible ways that will create more economic inclusion in the markets where BMO operates.”

“We want to thank all of the community groups that invested their time to meet with us and provide feedback that has helped shape this plan,” said David Casper, U.S. CEO, BMO Financial Group. “We are committed to ongoing community engagement to realize the full potential of this plan.”

“We have a duty to continue addressing the barriers that disproportionately affect people of color and remain committed to creating more opportunities that achieve progress for all,” Casper added. “Our Community Benefits Plan reflects our promise to ensure we have a strong combination of financial and community-driven investments that will create a more equitable society anywhere we do business. Eliminating barriers to inclusion while building a thriving economy and sustainable future is at the core of our Purpose to Boldly Grow the Good in business and life.”

The more than $40 billion commitment includes:

  • $7.5 billion in home mortgage lending, including $5.1 billion for the State of California, to support LMI and minority homeowners. Key commitments and programs include:
    – More than 75 percent of home mortgage lending under the plan to people and communities of color
         – The launch of a new Special Purpose Credit Program for BIPOC homebuyers in San Francisco and San Jose with over $125 million in home mortgage lending

  • An acknowledgment of the potential ethical and human rights issues relating to the financialization of single-family housing and the importance of ethical conduct in residential tenancies generally. The bank will conduct enhanced due diligence relating to unethical practices of potential clients, including wrongful evictions, single family property flipping, poorly managed properties, and other problematic behavior.

  • $16.5 billion in small business lending, including $5.3 billion for the State of California, that will help jumpstart the growth of small businesses in underserved communities across BMO’s footprint. Key commitments include:
    – Close to 60 percent of small business lending targeted to minority communities
         – $200M national commitment to BMO’s Special Purpose Credit Program for Black and Latinx owned small businesses, with a commitment to expanding to Native American owned businesses and will consider expanding to underserved (disaggregated) AAPI owned businesses.

  • $17.5 billion, including $6.1 billion for the State of California, in community development loans, investments, and other support for underserved  communities to create greater opportunity for success. This commitment:
         – Includes $12 billion in lending for affordable housing and economic development and  $3 billion in investments in low-income housing and new market tax credits, CDFIs, climate resiliency efforts, CRA-qualified private equity and other loan funds

  • $50 million in philanthropic contributions  for California communities of color and LMI communities.

  • Branches. BMO will not close any branch locations in LMI or communities of color during the Plan period. In California, BMO intends to open at least five new branches or financial services offices in underserved areas including two full-service branch locations in LMI or majority minority census tracts.

  • Overdraft fees. BMO announced that it is eliminating both non-sufficient funds (“NSF”) and overdraft transfer fees and significantly reducing overdraft fees.

  • Accountability. The bank agrees to provide annual data and meet annually with CRC regarding the bank’s progress towards its commitments.

Over the last year, CRC has negotiated similar community benefits agreements with U.S. Bank, Banc of California, Silicon Valley Bank, and First Citizens Bank, totaling more than $80 billion in reinvestment for the California communities.

Dozens of CRC member organizations participated in the listening sessions with BMO.

“It was a pleasure working with BMO Harris, We secured commitments to enhance lending services in Rural, LMI and communities of color, and the formation of Special Purpose Credit Programs that specifically support underserved communities are positive outcomes of this agreement,” said Eric Payne, Executive Director of The Central Valley Urban Institute. “In the future, We look forward to continuing to work with BMO Harris to fulfill these commitments, because we know Rural Communities matter.”

“The Congregation Organized for Prophetic Engagement, COPE appreciates the commitments from BMO Harris/ Bank of the West to implement a solid Community Benefit Agreement,” said Sonya Gray-Hunn, Lead Housing Organizer for Congregations Organized for Prophetic Engagement (COPE).”This collaboration is a strong start of financial institutions working directly with the communities to lay a foundation of transparency, cooperation and financial stability for generations to come.”

“This Community benefits agreement is going to be helpful for immigrant families. The ability to access Individual Taxpayer Identification Number (ITIN) loans is significant to improve the chance for every Californian, regardless of immigration status, to own a home and build a better life. We will be watching closely and working with the bank to ensure it keeps its promises,” said Elba Schildcrout, Director of Community Wealth
& Services for the East LA Community Corporation (ELACC).

“The Thai Community Development Center is proud to have collaborated with the CRC and NCRC to negotiate this community benefits plan that will expand access to capital and open doors to wealth creation for low-income, minority and immigrant communities throughout our state,” said Chancee Martorell, Executive Director of Thai Community Development Center. “We hope this agreement will be a major step towards reducing the socioeconomic disparities adversely impacting our communities, and we look forward to continuing our work to hold banks accountable and create a financially inclusive future for all.”

Read the summary of the Community Benefits Plan →

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About the California Reinvestment Coalition
The California Reinvestment Coalition (CRC) is the largest statewide community reinvestment coalition in the country, with over 300 member organizations across California that provide services to tens of thousands of Californians. CRC members include affordable housing developers, community development financial institutions, housing counseling agencies, small business technical assistance providers, legal services agencies, and community-based organizations. Learn more about CRC at: calreinvest.org.

About BMO Financial Group
Serving customers for 200 years and counting, Bank of Montreal is a highly diversified financial services provider – the 8th largest bank, by assets, in North America. With total assets of $833.8 billion as of July 31, 2022, and a team of diverse and highly engaged employees, Bank of Montreal provides a broad range of personal and commercial banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, BMO Wealth Management and BMO Capital Markets.