Santander US committed $13.6 billion this week to community reinvestment and sustainable finance initiatives.
The Boston-based bank agreed to a three-year, $4.6 billion community benefits plan to expand lending and investments in lower- to middle-income communities within its East Coast footprint. Separately, it pledged to invest $9 billion over three years in sustainable finance efforts, such as the generation of renewable energy or the rollout of electric vehicles.
"Our company and our industry is only as healthy as the communities in which we do business," Santander US CEO Tim Wennes said in an interview.
The bank's community benefits plan was developed in partnership with the National Community Reinvestment Coalition and more than 30 local organizations. It was not created in connection with efforts to get regulatory approval for a merger, as is often the case.
Jesse Van Tol, National Community Reinvestment Coalition's president and CEO, said that Santander US should be "applauded" for voluntarily committing to a community benefits plan.
"They firmly believe that this kind of framework has made their bank a better bank," said Van Tol.
The plan calls for Santander US to double its direct spending on supplier diversity, and to provide $1.8 billion in community development loans, $1.5 billion for small-business lending, around $1 billion for affordable housing investments and $100 million in charitable giving.
But the agreement is also smaller in size and shorter in duration than the bank's five-year, $11 billion commitment under an earlier community benefits plan.
Wennes said that Santander US sought to develop a plan that accounts for an uncertain economic environment and potential regulatory changes.
"We've worked internally as well as externally to determine what is an appropriate calibration and appropriate areas of focus," he said.
Santander US announced its previous community benefits plan in 2017. Earlier that year, the Office of the Comptroller of the Currency had given the bank a
In its 2017 plan, Santander US targeted 38% of the total funding to investments in affordable housing and the use of low-income housing tax credits.
In 2020, when the earlier plan was nearly concluded, the
But early last year, Santander announced plans
In its latest community benefits plan, Santander US allocated $1.2 billion — or 26% of the total funding — to affordable housing investments.
Though Santander US consulted with community organizations in developing its plan, many groups would prefer that the bank continue to fulfill its earlier mortgage and housing-related commitments, Van Tol said. They have encouraged the bank to "think about other ways to fulfill" housing-related commitments, Van Tol added.
The bank's community benefits plan does not include provisions for auto lending — another business that has brought it regulatory scrutiny. In May 2020, Santander Consumer USA, the bank's now wholly-owned subsidiary,
Wennes said that future commitments related to auto lending are something the bank will consider, depending on potential changes to Community Reinvestment Act regulations.
"We're going to monitor and evolve that going forward," Wennes said.
Bank regulators have
