BMO Harris Bank (BMO) announces more than $40 billion Community Benefits Plan
BMO today announced a Community Benefits Plan (CBP) that outlines a more than $40 billion commitment to local communities in the United States, with over $16 billion of the plan commitment targeted for the State of 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 December 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 and the California Reinvestment Coalition, 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 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.”
The CBP continues and expands on the progress by both BMO and Bank of the West to promote economic growth and provide greater access to capital for all. The result is a bold plan that will increase investment and expand BMO’s strategic partnerships in underserved communities. It’s also an expansion of, and is incremental to, the BMO EMpower initiative, a $5 billion commitment which was launched by BMO Financial Group in 2020 to advance an inclusive economic recovery in the United States through a series of long-term initiatives designed to drive meaningful change and champion racial equity.
The more than $40 billion commitment includes:
● Advancing Home Ownership: $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:
o More than 75 percent of home mortgage lending under the plan to people and communities of color
o The launch of a new Welcome Home Grant program in San Francisco and San Jose with over $125 million in home mortgage lending
o The creation of a $3 million Native Community Housing Fund to support affordable housing on tribal trust lands
● Growing Small Businesses: $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:
o Close to 60 percent of small business lending targeted to minority communities
o A $200 million commitment to expand BMO’s small business programs that support women, Black and Latinx-owned businesses, and a new program for Native American-owned businesses
● Strengthening Communities: $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:
o 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, CRA-qualified private equity and other loan funds
● Creating a More Equitable Society: Over 50 percent of the plan is expected to benefit communities and borrowers of color to help close the racial wealth gap and advance a more inclusive society. Key commitments include:
o More than $15 billion in small business and home mortgage lending to minority borrowers or in minority communities
o $325 million in special purpose credit programs for mortgage and small business lending designed for women and borrowers of color, including BMO’s newly launched small business program for Native Americans
“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.”
“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 commend BMO leadership for its collaboration with the California Reinvestment Coalition (CRC) and our members over the last several months to put together an agreement that reflects the needs of California communities,” 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 working with BMO as it implements this agreement over the next five years.”
After closing, the combined organization will provide greater convenience, more product choice and increased community engagement through the following:
● Increased Convenience
○ Over 1,000 branches and fee-free access to over 42,000 ATMs
○ Five new financial services (FS) offices in underserved areas
○ Maintaining Bank of the West branches, with no planned closures related to the transaction
○ A strong, user-friendly digital platform
● Broader Array of Goods and Services for New Customers – enabling increased access to banking and real financial progress
○ Retail products specifically designed to address the needs of LMI customers
○ Reduced fees on many accounts
○ Robust financial education resources
○ Bank-funded down payment mortgage assistance programs
● Enhanced Community Engagement
○ Community Advisory Council
○ Annual meetings with key partners in new markets and neighborhoods
○ Committed philanthropic funds for local organizations supporting affordable homeownership and small businesses
○ Committed to new partnerships in our expanded footprint
With a focus on collaboration, learning, and innovation, BMO will continue to work with community partners to achieve sustainable solutions and shape the future together.
