Aspiring to benefit and fortify Black Americans, Fifth Third Bank is committing $2.8 billion to speed up racial equity, equality, and inclusion.
The Cincinnati-based bank reports it will provide $2.2 billion in lending, $500 million in investments, and $60 million in financial accessibility. Another $40 million in philanthropy will come as part of its Executive Diversity Leadership Council’s Accelerating Racial Equality, Equity and Inclusion commitment. The bank says the effort is part of its inclusion and diversity work, creating equitable outcomes for all.
The three-year pledge focuses on employees, customers, and communities. The bank says each vertical has a specific emphasis on accelerating its progress toward an equitable environment for Black Americans.
Fifth Third aligns with other major U.S. banks making big financial commitments this year to fight racism after the police shooting of George Floyd and Black Lives Matter protests. Others pledges have come from JPMorgan Chase, Bank of America, Citi, and PNC Financial Services Group to name a few.
The bank also hopes to help close the racial wealth gap for African Americans, which has been an ongoing economic disparity problem nationally for decades.
“As we continue to make meaningful strides in advancing inclusion and diversity in our industry and in our communities, Fifth Third is committed to maintaining and extending its leadership and making a difference for our Black employees, customers, and communities,” Greg Carmichael, Fifth Third Chairman and CEO, stated in a news release. “The dedicated investment, philanthropy, and lending efforts will help accelerate our progress toward promoting equality, equity, and inclusion, both within the Bank and in our communities, launching with a $2.8 billion commitment.”
The bank reported the investment is focused on four strategic pillars that directly impact customers and communities with targeted outcomes enabling it to track progress and measure success in the areas of:
- Strategic Investments: Fifth Third will engage in comprehensive neighborhood revitalization to help improve outcomes and quality of life indicators for communities of color that have experienced decades of disinvestment. Through the introduction of an innovative $100 million Neighborhood Fund, the bank will focus on improving the social and environmental determinants in a community bringing together resources and expertise from across the Bank’s lines of business. The fund will conduct a competitive application process across the Bank’s 11-state footprint and award at least five communities with long-term investments to accelerate impact and outcomes.
“Fifth Third is acting boldly and decisively to create more equitable outcomes in Black communities during this critical time,” said Priscilla Almodovar, CEO of Enterprise Community Partners, a national nonprofit that addresses America’s affordable housing crisis from every angle. “Their investment gives organizations like ours the opportunity to engage communities at the forefront of building meaningful change.”
- Access to Capital: Fifth Third will continue expanding access to home loans and business capital. The bank intends to boost its mortgage lending by 31%, focusing on achieving parity in its top eight markets where Black Americans reside. The bank in 2018 invested in a fund with the National Community Reinvestment Coalition (NCRC) for homeownership and rehabilitation in urban communities.
“Fifth Third’s leadership in the area of investing in underserved communities to prevent the widening gap of economic inequality and to help people own their own homes is a clear demonstration of the bank’s dedication to creating wealth and helping establish stability for families,” stated Jesse Van Tol, CEO of the NCRC, and member of Fifth Third’s Community Advisory Forum.
Owning a small business can help build wealth and create a legacy for business owners to transfer to their families. Yet, Black business owners can face challenges finding the capital to start and maintain their business, which can determine if they succeed or fail. To create opportunities for these business owners, Fifth Third report it intends to boost small business lending by 25% in majority minority communities. The bank plans to keep investing and expanding partnerships with community development financial institutions (CDFIs) to increase their sources for capital. In 2017, the Bank launched the Entrepreneur of Color Funds in Detroit and Chicago, and in 2018, it launched a similar fund in Cincinnati. These programs will also now expand to Cleveland, Atlanta, and Louisville, though a date has not been set.
- Financial Inclusion and Education: The bank expects 25% of its new branches to be built in majority-minority tracts and low- and moderate-income communities, and increasing accessibility through innovation. Through these efforts, Fifth Third says it will provide wider access to business and consumer loans, expand accessible tools for financial education, and develop innovative banking solutions for the unbanked and underbanked. Further, the bank will continue to work with and invest in historically Black colleges and universities (HBCUs) to support scholarships and career readiness through internships and early career development opportunities.
Fifth Third will create opportunities for and increase spending with Black-owned suppliers as part of its supplier diversity program. In 2021, it will launch a program with the National Minority Supplier Development Council to improve supplier readiness for corporate business opportunities.
- Social Justice and Advocacy: The Bank is investing and partnering with organizations that actively engage and support laws and policies that address systemic racism, create improvements in worker re-entry, and improve economic mobility and skill-based training, which will provide for greater access to jobs and skills for low-wage workers through workforce development programs. The bank has already committed $1 million to the National Urban League for a workforce development program that focuses on growing individuals’ skills and developing the tools that are needed for business success.
“There is a critical need for organizations to engage in the work of helping to eliminate the social and economic barriers that negatively impact Black Americans, including job creation and job preparation,” said Marc H. Morial, president and CEO of the National Urban League. “We are pleased to collaborate with companies such as Fifth Third as they show their dedication to the journey of financial equity.”
In addition to the community financial investments for Fifth Third’s customers and communities, the Executive Diversity Leadership Council’s efforts include an employee-focused workstream to ensure the bank maintains and grows its culture of equality, equity, and inclusion among its workforce.
“It is important that we collaborate with our external and internal stakeholders so that we can serve them in the most effective, impactful, and sustainable ways,” said Kala Gibson, chief enterprise responsibility officer and head of Business Banking. “We will continue to review policies and practices to evaluate where comprehensive improvements can be made so that the Bank’s employees, customers, and communities are fully supported.”
Stephanie Smith, Fifth Third’s senior vice president and chief inclusion and diversity officer, explained that while the Bank has long valued inclusion and diversity, its leaders are working to enhance equality among its employees. “We have a responsibility to establish a more equitable workplace, particularly for our Black employees, customers, community members, and suppliers,” she said. “While these challenging issues won’t be solved overnight, we are continuing the efforts toward actionable change and we are committed to be a force of advancement.”
The bank recently unveiled six bold goals that will be achieved by 2025 to support inclusion and diversity within its entire workforce and for its diverse suppliers:
- Complete unconscious bias awareness training for 100% of employees. (This was achieved in 2020.)
- Ensure the diversity of the bank’s workforce reflects the markets it serves.
- Grow leadership positions at each management level for women and persons of color.
- Create a work environment where there is no disparity in race or gender.
- Advance the bank as a leader in inclusion and diversity.
- Achieve and sustain a 10% supplier diversity spend to increase supply chain inclusion.
Learn more details about the bank’s commitment to racial equity and equality here.