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Responsible banking Updated: 26 Mar 2019

Small business and housing investments help build strong communities

In February 2019, BBVA Compass announced that the Federal Reserve Bank of Atlanta rated it “Outstanding” for CRA performance for its most recent examination period. This three-part series will take a detailed look at the key efforts behind that rating in lending, investment and community giving.

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When banks invest in small businesses and affordable housing initiatives, they help to establish the foundation on which strong communities are built. This includes originating community development loans and investments, particularly in low to moderate income areas that can benefit most from the infusion of bank capital.

BBVA Compass committed and originated community development investments totalling $900 million between 2015 and 2017, and according to BBVA Compass Director of Communications and Responsible Business Reymundo Ocañas, the bank plans to continue this pace going forward.

Ocañas: Community development investments are a critical part of the way we do business.

“Community development investments are a critical part of the way we do business,” said Ocañas. “When we are able to help strengthen the foundation of a community, businesses benefit, homeowners benefit, the entire community benefits.”

Ocañas indicated that the bank’s community development investments were also an instrumental part of BBVA Compass’ recent CRA examination, which yielded the bank’s first “Outstanding” rating in it history.  Of the $900 million invested during the examination period, nearly $500 million was in the form of low income housing tax credits. These credits were used to finance the development of more than 5,000 affordable housing units across the bank’s footprint.

Also during the examination period, the bank partnered with 20 Community Development Financial Institutions (CDFIs) across the footprint to provide 73 equity equivalent (EQ2) loans, equity and stock purchases totaling $54 million. These efforts helped to increase CDFI lending capacity at the community level.

Specific initiatives that benefited from BBVA Compass investments included a 100-unit affordable housing complex in Birmingham, Ala. which received a $12 million construction loan and an $18.9 million Low Income Housing Tax Credit investment.  The project, which is intended to house families making less than 60% of the Area Median Income, is the redevelopment of an existing 500-unit public housing site from 1952. The redevelopment reduces the unit density and provides a more aesthetically pleasing design and site plan more conducive to community building.

BBVA Compass also closed a $5 million equity investment investment to Pathway Lending, becoming the largest investor in Alabama’s effort to build up small businesses in the state’s Appalachian region.  Pathway Lending, a Community Development Financial Institution certified by the U.S. Department of Treasury, currently operates the state’s new loan fund established in 2017 for small businesses in the 37 counties of Appalachian Alabama.

Ocañas: Our objective is always to bring the bank’s mission to life: to bring the age of opportunity to everyone.

“By investing in low to moderate income housing efforts like these, we are able to play a part in revitalizing neighborhoods and rebuilding communities across our geographic footprint,” said Ocañas. “Our objective is always to bring the bank’s mission to life: to bring the age of opportunity to everyone. And we believe our community development investments help us take a big step in that direction.”

To read about the impact of the bank's community giving and employee volunteering efforts, click here.

Stay tuned for the next article in this three-part series about the bank's community development lending and investing efforts.