S&P Global, June 13, 2022, More banks are inking community benefits agreements after striking M&A deals
Since 2021, the National Community Reinvestment Coalition, a group that advocates for fairness in lending, has helped strike nine benefits agreements with financial institutions after working on seven such agreements from 2016 through 2020.
The coalition’s CEO, Jesse Van Tol, said he understands that banks are going to pursue M&A deals in an effort to boost their bottom lines. Van Tol said his group wants to ensure that communities do not lose access to financial services after companies are sold and consolidated.
“The reason we engage in bank mergers is to ensure that, when it comes to serving the community, that one plus one doesn’t equal less than two,” Van Tol said. “In the ideal world, one plus one should equal more than two … that they’re able to do more with the size and scale.”
Along with increased lending in certain areas, other goals the National Community Reinvestment Coalition seeks in the agreements include expanding banks’ philanthropy and diversity among staff and suppliers, according to Van Tol.
“Bank mergers are not always beneficial to communities, and that’s why we engage at that time to make sure that they are,” he said.
