Jackson-based HOPE Credit Union was awarded $88 million as part of a national effort to increase lending to minority-owned businesses and people with limited access to banking.
The Treasury released a total of $8.7 billion to be split among 186 financial institutions through its Emergency Capital Investment Program, which was included in a 2021 stimulus package passed by Congress. The program is the largest community finance development program ever created.
The financing is the largest investment that HOPE Credit Union has ever been awarded since it was founded in 1994.
Vice President Kamala Harris announced the historic investment during the Freedman’s Bank Forum, which was hosted Tuesday by the Treasury Department in Washington, D.C.
“The wealth gap persists today, the homeownership gap persists,” Harris said. “Black entrepreneurs are three times more likely to report that a lack of access to capital negatively affects their profit margins.”
The program was created this year in response to economic distress caused by COVID-19, which disproportionately affected small and minority-owned businesses. Despite making up 13.4% of the nation’s population, Black Americans control just 4.3% of household wealth, according to the Federal Reserve.
The credit union had to apply to receive the financing, which comes in the form of a 30-year, low-interest loan. The access to the funds allows HOPE and the other recipients to more easily provide loans, grants and forbearance for small businesses to people in underserved and low-income areas.
Freedman’s Savings and Trust Company, commonly called the Freedman’s Bank, was chartered by the U.S. government more than 150 years ago to help newly emancipated African Americans become financially stable. Now, the forum that carries its name is aimed at discussing the systemic wealth gaps in the U.S.
“It is quite fitting that (Tuesday’s) historic announcement of the largest investment ever made in community development finance takes place at a commemoration of the Freedman’s Bank — an institution created to provide former slaves with fair access to the banking system,” HOPE CEO Bill Bynum said in a statement.
“As a fellow financial first responder and longtime advocate for policies, practices and investments that level the financial playing field, HOPE looks forward to building on the Freedman’s Bank proud legacy by working to ensure that Emergency Capital Investment Program resources reach those hardest hit by COVID-19, bridge gaps in the banking system and advance equitable economic prosperity, particularly in communities of color across the Deep South.”
Since its founding, HOPE has generated more than $3.1 billion in financing throughout Mississippi, Alabama, Arkansas and Louisiana.
HOPE Credit Union was among the recipients of $10 million from Netflix after the streaming company pledged to invest 2% of its cash holdings to banks and organizations supporting Black communities across the nation. HOPE is also working with Netflix on a streaming television series that will highlight banking discrimination.
Editor’s note: Bill Bynum serves on Mississippi Today’s board of directors.