Cadence Bank in Houston has pledged to invest $20.7 billion in low- and middle-income communities over five years as part of a negotiated agreement with community advocacy groups.
The deal, jointly announced by the bank and the National Community Reinvestment Coalition on Thursday, is similar to operations announced by other banks that were in the middle or had completed large mergers. Houston-based Cadence merged with BancorpSouth Bank in Tupelo, Mississippi, in October, creating a regional bank with more than $50 billion in assets and operations in nine states.
Under the terms of the latest deal, Cadence has pledged to provide $11.8 billion in mortgages to low- and middle-income borrowers and homebuyers of color. It has committed an additional $6.5 billion in loans to small businesses in low-income regions with annual gross revenues of less than $1 million.
Cadence will also dedicate $2.4 billion in community development loans and investments to projects such as affordable housing and other services to help struggling neighborhoods.
“I am encouraged that these banks, Cadence and BancorpSouth, have agreed to put in writing their commitments to low and moderate income communities, small businesses, especially those owned by people of color and other institutions,” said said Bob Dickerson, Executive Director. of the Birmingham Business Resource Center and a member of the NCRC board, said in a press release announcing the deal.
“Cadence is dedicated to understanding the financial needs of its communities and providing solutions to make them stronger,” Cadence CEO and President Dan Rollins said in the press release.
Cadence announced a $2.5 billion community benefits plan in 2019, following its acquisition of State Bank Financial in Atlanta.
Both Cadence and BancorpSouth had faced allegations of discrimination in the past.
In 2016, BancorpSouth settled allegations of mortgage discrimination by paying a $10.6 million fine to the Department of Justice and the Consumer Financial Protection Bureau.
And last year Cadence had to pay a fine of 8.5 million dollars to the DOJ and the Office of the Comptroller of the Currency to address allegations of discrimination within its mortgage business.