BB&T and SunTrust Banks announced $60 billion in loans and investments in low- to moderate-income communities as the two banks finalize plans to merge.
The announcement comes as the banks seek regulator and shareholder approval to become Truist, a $66 billion deal that would create the sixth-largest bank in the United States and would be headquartered in Charlotte.
The three-year financial commitments include:
- $31 billion for home mortgage loans to low-to-moderate income and minority borrowers.
- $7.8 billion in small business loans.
- $17.2 billion in Community Development Lending for affordable housing development, small business loans to nonprofits.
- $3.6 billion in Community Reinvestment Act investment and philanthropy.
Critics who attended an April public meeting in Charlotte said the proposed merger could close branches, cut lending to minority and low-income communities, and decrease small business loans.
The investment plan was a direct result of input from community meetings, the banks said. The money will be designated for 17 states and Washington, D.C. A BB&T spokesman said information about North Carolina’s share was not immediately available.
“The Community Benefits Plan exemplifies what Truist will stand for and how it will support local communities in the years to come,” BB&T CEO Kelly King said in a statement. “Both BB&T and SunTrust have long legacies of serving the community, but together as Truist, we will be uniquely positioned to invest in ways we never could on our own.”
The banks drafted the plan with the National Community Reinvestment Coalition.
Nathan Stovall, a principal analyst with S&P Global Market Intelligence, said announcing such a sizable community investment plan to accompany a merger is “not typical but not necessarily surprising.”
“There isn’t anything to compare it to in a post-recession timeline,” he said of the merger. “(Banks) have acknowledged they need to spend more time paying attention to communities when doing a deal.”
Mergers of this size get immediate and significant attention, he said. Protests from consumer groups can delay deals and cost banks customers and money.
U.S. Rep. Maxine Waters, a California Democrat who chairs the House Financial Services Committee, will hold a committee meeting next week about the proposed merger. Presidential candidate Sen. Elizabeth Warren also was quick to raise alarm about the danger of big banks getting bigger.
Stovall said the community plan shows an effort to head off those concerns.
“They’re trying to send a strong message to the community that this isn’t about getting bigger but we’re trying to invest here,” he said.
This work was made possible in part by grant funding from Report for America/GroundTruth Project and the Foundation For The Carolinas.