HOUSTON, Nov. 6, 2014 /PRNewswire/ -- BBVA Compass pledged today to put $11 billion in lending, investments and services toward supporting low- and moderate-income individuals and neighborhoods, a significant step in delivering on its promise to boost economic development across all the communities in its footprint.
Over the next five years, the bank will originate $2.1 billion in mortgage loans to low- and moderate-income (LMI) homebuyers and in LMI neighborhoods, $6.2 billion for small business lending, $1.8 billion for community development lending, and make $900 million in community development investments. The bank also plans to unveil new delivery channels, products and services for LMI individuals in 2015.
"BBVA Compass is a principled bank that is committed to building a better future for absolutely everyone in our communities — no exceptions," said BBVA Compass Chairman and CEO Manolo Sanchez. "It's good business sense, it's responsible banking and it helps us connect in a meaningful way to the places where we put down stakes. We are committed to doing our part in a way that's as big as our vision for banking in the 21st century."
BBVA Compass vowed to focus on initiatives that support low- and moderate-income neighborhoods after its recent disclosure regarding its Community Reinvestment Act exam, which measures how well financial institutions are meeting the credit needs of the communities they serve. The bank disclosed in a Form 10-Q filing with the SEC in August that it expects its rating will limit its ability to make certain acquisitions and open new branches.
In Washington, D.C., last week, Sanchez met with representatives from the National Community Reinvestment Coalition and other community partners* — all organizations dedicated to serving the housing, community and economic development needs of diverse communities across the U.S. — to discuss the bank's efforts to reach out to LMI customers and neighborhoods.
"I think BBVA Compass is making all the right moves in responding to calls for increased lending and investments to LMI communities," said NCRC President and CEO John Taylor.
The news comes on the heels of several moves the bank has made to boost its commitment to its communities. In September, to ensure the highest level of accountability, centralize management of the bank's community development efforts, and meet CRA expectations, BBVA Compass moved the CRA function to the Corporate Responsibility and Reputation department. That same month, the bank welcomed veteran banker and seasoned CRA strategist Chris McGillis as the bank's CRA program administration director.
The bank also has added a new Community Development Finance team, and announced its plan to hire 10 community relations officers across its footprint who will serve as the bank's local champions for lending, investments and services for community development efforts.
The bank hosted its first week of service initiative in September, with more than a thousand employees volunteering more than 6,800 hours of their time in LMI communities — teaching financial education to children, hosting small business and affordable housing workshops and offering their professional expertise to community development organizations.
"We have made significant enhancements to our CRA program in terms of staffing, governance and overall strategy," said BBVA Compass Director of Corporate Responsibility and Reputation Reymundo Ocanas, who joined Sanchez in Washington to meet with the various community organizations.
BBVA Compass also elevated Ocanas, the bank's CRA officer. He now reports directly to Sanchez, a point that NCRC's Taylor says is a sign of the bank's commitment.
"The personal assurances from the bank's CEO and the fact that the lead staff person on these matters reports directly to him are all good signs of an increased sensitivity and commitment to underserved community credit needs," Taylor said.
As part of its community development program, the bank also plans to set up an advisory board with 16 members from markets across its footprint to provide input, guidance and feedback on its CRA program restructure.
* Additional attendees to the event in Washington included representatives from the following:
- National Low Income Housing Coalition
- National Alliance of Community Economic Development Associations
- Hispanic Heritage Foundation
- National Association for Latino Community Asset Builders
- National Coalition for Asian Pacific American Community Development
- National Council of La Raza
Details of the bank's five-year $11 billion community development program:
Lending commitment highlights
$2.1 billion in mortgages for LMI homebuyers and in LMI neighborhoods
- New homebuyer assistance program to launch in 2015
- New portfolio product with flexible loan-to-value (LTV) terms
- Federal Housing Administration (FHA) mortgage product with more flexible terms
- Dedicated community development mortgage banking officers
$6.2 billion in small business loans
- Remain focused on loans under $100,000 to smaller-sized businesses
- Partnerships with loan funds, including Community Development Financial Institutions (CDFIs) and technical assistance providers
- Small business bankers trained to work within LMI communities
$1.8 billion in Community Development loans
- Affordable housing as the primary focus, including single family development
- New economic development projects for job creation in LMI communities
- Support for clinics and medical facilities in underserved areas, given the bank's specialty in healthcare lending
- Dedicated community development lending team within Commercial Banking
Investment commitment highlights
$250 million in low income housing tax credits (LIHTC) investments
- Transaction support to come from community development finance team in corporate responsibility department and community development lending team in Commercial Banking
$100 million in Equity Equivalents (EQ2s) and equity investments into CDFIs
- Partnership with Opportunity Finance Network
- Includes support for smaller/emerging CDFIs active in rural and border markets
$43.5 million in grant contributions from the BBVA Compass Foundation
- 50 percent of all grants for Community Development
- Special grant program for CDFIs
Service commitment highlights
- Deposit-taking ATMs and Banker Links (remote video teller ATMS) deployed in LMI areas
LMI and Unbanked Products/Services
- Low/no cost checking accounts for qualified LMI customers
- Digital innovation products to include LMI consumers
Commitment to Service
- Bolster financial education platform to include in-person and online content across the U.S. for children and adults
- Employees to receive paid time off for community development service hours
- Pro bono effort with community development corporations
New Community Advisory Board
- Advisory board will provide bank executives and board directors with input, guidance and feedback on the bank's CRA program restructure
- Provide referrals for qualified community development business opportunities such as mortgage, small business and community development loans and investments
- Board will include 16 members from across the bank's footprint.
About BBVA Group
BBVA Compass is a subsidiary of BBVA Compass Bancshares Inc., a wholly owned subsidiary of BBVA (NYSE: BBVA) (MAD: BBVA). BBVA is a customer-centric global financial services group founded in 1857. The Group has a solid position in Spain, is the largest financial institution in Mexico and has leading franchises in South America and the Sunbelt region of the United States. Its diversified business is geared toward high-growth markets and relies on technology as a key sustainable competitive advantage. Corporate responsibility is at the core of its business model. BBVA fosters financial education and inclusion, and supports scientific research and culture. It operates with the highest integrity, a long-term vision and applies the best practices. The Group is present in the main sustainability indexes. More information about the BBVA Group can be found at www.bbva.com.
About BBVA Compass
BBVA Compass is a Sunbelt-based financial institution that operates 673 branches, including 342 in Texas, 89 in Alabama, 77 in Arizona, 62 in California, 45 in Florida, 38 in Colorado and 20 in New Mexico, and commercial and private client offices throughout the U.S. BBVA Compass ranks among the top 25 largest U.S. commercial banks based on deposit market share and ranks among the largest banks in Alabama (2nd), Texas (4th) and Arizona (5th). BBVA Compass has been recognized as one of the leading small business lenders by the Small Business Administration and recently earned the top ranking with customers in American Banker's 2014 annual reputation survey of the top 25 largest U.S. retail banks. Additional information about BBVA Compass can be found at www.bbvacompass.com, by following @BBVACompassNews on Twitter or visiting newsroom.bbvacompass.com.
BBVA Compass is a trade name of Compass Bank.
SOURCE BBVA Compass