Community Finance | November 28, 2023

Mission Driven Bank Fund secures $110 million for local lenders in low-income communities

Roodgally Senatus
ImpactAlpha Editor

Roodgally Senatus

ImpactAlpha, November 28 — The Mission Driven Bank Fund will back a pipeline of over 300 FDIC-insured minority depository institutions, or MDIs, and community development financial institutions, or CDFIs, to expand access to credit and other financial services in lower-wealth, rural and communities of color in the US.

“The exciting part of the fund is the flexibility and the tools we have to deploy for the banks,” said Beth Bafford of Calvert Impact, which will manage the fund alongside Elizabeth Park Capital Management, a Black-led alternative asset manager. The fund was designed by the Federal Deposit Insurance Corp. to complement the Emergency Capital Investment Program.

“We can do deposits. We can do equity. We can structure solutions on- or off-balance sheet,” Bafford told ImpactAlpha. “So it’s really flexible and meant to really support the diversification of capital and growth of these banks.” The fund, anchored by Microsoft and Truist, is targeting a $500 million final close next year.

Community Reinvestment Act

Skadden Arp’s Heather Cruz said Mission Driven Bank Fund is well-timed with new Community Reinvestment Act regulations that encourage loans, investments or services in cooperation with MDIs and CDFIs. The CRA rules, issued last month, include tougher rules for banks to widen access to mobile and online lending and banking services to underserved communities.