BOSTON – Santander Bank on Monday announced a new plan to put $11 billion toward community lending, development and charitable giving over the next five years.
The plan, dubbed “Inclusive Communities,” is designed to boost the Boston-based bank’s commitment to communities across its eight-state footprint by 2021. The announcement comes at the same time federal regulators are scheduled to examine how well the bank is meeting the needs of low- and moderate-income neighborhoods.
“This plan is the foundation of Santander’s approach to supporting the communities where we live and work,” said Scott Powell, Santander CEO, in a statement.
The United States subsidiary of Banco Santander, based in Spain, has struggled in recent years to maintain good regulatory standing with the U.S. government, especially in the area of community reinvestment.
The Office of the Comptroller of the Currency last year assessed the bank under the Community Reinvestment Act, or CRA, and gave it poor marks, saying it “needs to improve.”
The CRA, among other things, prohibits redlining, a practice of denying or increasing the cost of banking to neighborhoods often comprising low-income families and racial minorities.
Providence in 2014 sued Santander, accusing the bank of discriminatory lending, specifically in poor, black and Hispanic neighborhoods. The city ultimately dropped the lawsuit after the bank – which has rejected the accusations – agreed to make more mortgages and give grants to various city organization.
The Inclusive Communities plan, however, could potentially help shift the narrative, as it would increase the bank’s CRA activity by 50 percent and triple its charitable giving to $55 million.
The bank plans to allocate $9.1 billion specifically to lending in underserved communities, according to the announcement. Of that amount, $4.2 billion is slated for residential mortgage loans for low- to moderate-income families, nearly $2 billion will go toward small-business lending and $3 billion is slated for community-development lending.
The bank also said it would open 10 new retail branches in “low- to moderate-income income and communities of color.” Santander did not specify where.
“By increasing lending, investments and financial education opportunities, we hope to boost the long-term economic success of low- and moderate-income individuals and neighborhoods,” Powell added.
Eli Sherman is a PBN staff writer. Email him at Sherman@PBN.com, or follow him on Twitter @Eli_Sherman.
