BMO Financial Group has announced a $5 billion investment over the next five years to empower Black- and Latino-owned businesses as well as communities of color, primarily in Wisconsin.
One of the executives leading the initiative, called BMO EMpower, is Madison’s Anthony Hudson, who heads up the Economic Equity Advisory Group in BMO’s Commercial Banking division.
“It’s a very inclusive, well-thought-out five-year plan,not just targeting solely in investment into the community, but … the big piece of this is also how do we empower small businesses, mid-sized businesses, companies to better execute on their mission,” Hudson said in an interview Friday. “Because when that happens, there’s a trickle down effect. When you have diverse owners, diverse management teams, (there’s a) trickle down effect to a diverse employee base that oftentimes are taking the wealth from those careers back to diverse communities, back to diverse families.”
Among the elements of the plan:
- $3 billion for community reinvestment in affordable housing and neighborhood revitalization
- $500 million for minority commercial lending to accelerate lending for Black- and Latinx-owned commercial businesses
- $500 million in mortgage lending in low-to-moderate income level communities
- $500 million to advance supplier/business diversity initiatives, diverse talent advancement programs and increase philanthropy targeted at systemic change
- This includes an additional $250 million in spend with diverse suppliers across North America and a diverse supplier outreach and development program that engages with diverse business communities and partners with advocacy councils on outreach and education for diverse supplier communities.
- BMO will also increase availability of Black and Latinx investment managers on our Wealth Management platform.
- $300 million for small business lending to expand resources for women-, Black- and Latinx-owned small businesses
- $300 million for critical support for municipal and non-profit clients
BMO EMpower was formally announced at a press conference Thursday.
“The barriers that disproportionately affect minorities – and in particular, Black and Latinx communities – have only intensified during the COVID-19 pandemic,” said David Casper, U.S. CEO, BMO Financial Group. “The bold commitments outlined in this pledge are designed to help tackle barriers to inclusion in the financial services industry and create more opportunity for our clients, communities and colleagues to succeed in business and in life.”
“Central to addressing the economic downturn or the COVID recession … is a high level of emphasis on black and Latino owned businesses in this country,” said National Urban League President Marc Morial. “And what that means is you need a new round or a different type of PPP, and you need a permanent PPP. You need permanent mechanisms,” he added, referring to the Paycheck Protection Program, which offered federal funding to help businesses meet their payroll in the early days of the COVID-19 pandemic.
One issue with that program was that it was exclusively administered through financial institutions.
“There were a lot of minority owned businesses that were left on the sideline,” Hudson said. “And one of the biggest reasons for that was because they didn’t have a relationship with a bank or a banking team.”
Hudson said he hopes BMO EMpower will be a way into a banking relationship for Black and Latino-owned small businesses, which allows for not only more access to capital, but also expertise, technical resources and connections to government programs like PPP.
“This initiative will allow us just to double down our efforts,” he said.
Chicago-based BMO Harris Bank has branches in several states, but the bulk of their business is in Illinois and Wisconsin, especially in Milwaukee and Madison.
More information about BMO EMpower for small business owners, prospective homeowners, community leaders and other potential partners is available at the initiative’s new website.