For Immediate Release
Contact: Brian M. Maxey,
With support from 20,000-person petition, CRC asks feds to honor existing community benefits agreement, protect affordable housing projects
SAN FRANCISCO, March 24, 2023 — The California Reinvestment Coalition today delivered a petition signed by more than 20,000 people urging the Federal Deposit Insurance Corporation (FDIC) to enforce Silicon Valley Bank’s existing $11 billion community benefits agreement (CBA) should it be sold to new owners.
The petition, created and distributed by Daily Kos, was delivered Friday as the FDIC’s deadline to auction off SVB and its assets closed. The petition called for the federal regulatory agency to condition the sale so that “the new buyers honor the community benefit agreement.”
SVB agreed to an $11 billion, five-year CBA that began in January 2022 as part of its acquisition of Boston Private Bank. The agreement included:
- $4 billion in small business loans of $1 million or less;
- $4 billion in CRA community development loans and investments;
- $1 billion in residential mortgages to low- and moderate-income borrowers;
- $60 million in charitable contributions;
- $10 million to establish an affordable home mortgage program targeted to BIPOC borrowers as part of a special purpose credit program.
The agreement facilitated the construction of critically-needed affordable housing projects in the Bay Area, which are now in jeopardy of significant delays and loss of funding should the existing CBA not be enforced.
“In the immediate aftermath of SVBs failure, federal regulators missed an opportunity to show the American public that they work in their best interest, and not in the interests of banks,” said Paulina Gonzalez-Brito, CRC Chief Executive Officer. “But that window of opportunity has not yet fully closed. A conditional sale of SVB, and any other bank with a CBA, would be a signal to vulnerable communities that regulatory agencies care about equality.”
The FDIC has controlled the remains of SVB since its collapse earlier this month. New York-based Signature Bank collapsed just days after. While the run on deposits is most often pointed to as the reason for the collapse of these banks, economic and social justice advocates have joined CRC in highlighting how 2018’s pro-big bank and pro-risk rollbacks of the Dodd-Frank Act allowed these banks, particularly SVB, to ignore the interest rate risk that ultimately took them down.
“We watched the regulatory agencies invoke emergency powers to aid SVB depositors with over $250,000, many of whom were either VC firms or tech companies. So we know measures have been taken to protect the wealthiest depositors,” Gonzalez-Brito said. “But we don’t understand why measures haven’t been taken to protect communities, particularly those communities made up of low- to moderate-income people and Black, Indigenous and People of Color. This is yet another example of how these communities are left behind while banks and the wealthiest groups receive bailouts.”
Kevin Stein, CRC Chief of Legal and Strategy, added: “Taking emergency measures to protect all deposits provides an additional benefit to SVB and its successor, and this added benefit should come with additional responsibility and obligations to the public.”
California community groups have expressed concerns over the potential loss of the CBA, including during a town hall meeting held by CRC on March 17. During that meeting, leaders of California-based Community Financial Development Institutions and other community groups noted the current banking environment has put recent activity “on ice.” To address those concerns, CRC on Friday also reiterated its call for officials to halt all bank merger activity until current bank merger rules are updated to protect consumers and communities.
Read Silicon Valley Bank’s Community Benefit Agreement
About the California Reinvestment Coalition
The California Reinvestment Coalition (CRC) builds an inclusive and fair economy that meets the needs of communities of color and low-income communities by ensuring that banks and other corporations invest and conduct business in our communities in a just and equitable manner. CRC’s 300 organizational members include multi-service agencies, affordable housing developers, housing and financial capability counselors, tenants’ rights and legal aid organizations, small business technical assistance providers, Community Development Financial Institutions (CDFIs), small farm incubators, immigrant service organizations, and other community-serving organizations located throughout California. We envision a future in which people of color and low-income people live and participate fully and equally in financially healthy and stable communities without fear of displacement and have the tools necessary to build household and community wealth.