Using Proceeds from the Paycheck Protection Program to Support Small Businesses and CDFIs
By Brandee McHale, Head of Community Investing and Development at Citi and President of the Citi Foundation April 28, 2020 02:00 PM
Community Development Financial Institutions play a vital role in expanding access to safe and affordable products and services to low-income communities and communities of color. The Citi Foundation greatly values the opportunity to partner with these critically important financial institutions to support their customers, many of whom have been particularly hard hit by the impacts of the COVID-19 pandemic. That's why the Citi Foundation launched a $7.5 million COVID-19 U.S. Small Business Relief Program earlier this month to support efforts by Community Development Financial Institutions (CDFIs) to serve small, diverse entrepreneurs who may not fully qualify for federal government stimulus funding. This includes capacity building grants to expand lending capabilities and operations in response to an unprecedented demand for services.
Today we are expanding the program using funding provided by Citi. Citi is donating the net profits earned through its participation in the U.S. Small Business Administration's Paycheck Protection Program (PPP) to fund this expansion. Once PPP has concluded, we will share with you the amount we will be able to use to expand our philanthropic initiative.
Since 2016, Citi has partnered with 28 minority-owned depository institutions, community banks and credit unions as part of our Citi ATM Community Network to provide more than 440,000 customers of these institutions with use any of Citibank's 2,300 ATMs without paying out-of-network fees. By removing surcharge fees on cash withdrawals from Citibank branch ATMs, we are helping to reduce transaction costs and improve convenience and choice for customers. Additionally, through the Treasury Department's Financial Agent Mentor-Protégé program, a team from Citi is mentoring leaders at Unity National Bank of Houston, Houston's only black-owned bank, to consider how best to evolve its business model to remain competitive.
Citi strongly believes that financial institutions of all sizes are needed to serve a broad spectrum of customers and client needs. By partnering with mission based entities like CDFIs and MDIs, Citi and the Citi Foundation can combine scale with local market expertise, community knowledge and often-long established relationships to serve important communities in a larger and more effective way than banks of either size could do on its own.