The top Democrat on the House Financial Services Committee is urging First Citizens Bank to honor an $11.2 billion community benefits plan that Silicon Valley Bank reached prior to its failure.
Rep. Maxine Waters, D-Calif., noted in a letter this week to First Citizens CEO Frank Holding Jr. that 80% of Silicon Valley Bank's commitment under the five-year agreement stood to benefit communities in California.
After Santa Clara, California-based Silicon Valley Bank collapsed in March, First Citizens bought much of the remains from the Federal Deposit Insurance Corp.
"When First Citizens Bank acquired SVB in March, it inherited SVB's obligations to the people of California," Waters wrote.
"The loss of the commitments made in the Community Benefits Plan would represent a missed opportunity for community reinvestment, housing, and wealth-building opportunities in my district and across the state, especially for those who remain historically underserved by the U.S. banking system."
Waters cited California's housing affordability crisis and its high cost of living as among the reasons for First Citizens to uphold SVB's plan. She said that SVB deployed $643 million in community development investments and loans prior to its failure.
First Citizens
Groups such as the California Reinvestment Coalition have expressed disappointment with the fact that the FDIC did not make implementation of the plan a condition of SVB's sale to First Citizens.
Before the FDIC sold SVB to First Citizens, Waters asked the agency to ensure that the community benefits plan would be upheld.
First Citizens has yet to commit publicly to any particular course of action.
The Raleigh, North Carolina-based bank is taking an "informed and thoughtful approach to doing what's right to strengthen the communities where we do business," Jacqueline Vose, the bank's executive director of strategy and community investment, said in email.
"We take seriously our commitment to invest in and support our communities through affordable housing and other community development initiatives," Vose said.
SVB pledged in May 2021 to invest billions of dollars in community initiatives in California and Massachusetts as part of its acquisition of Boston Private Financial Holdings. During the same year, First Citizens committed to a separate
SVB's plan was developed in partnership with the California Reinvestment Coalition and the Massachusetts Association of Community Development Corporations, among other groups.
It called for SVB to commit $5 billion in small business loans of $1 million or less, $4.8 billion in community development loans and investments, $1.3 billion in residential mortgages to low-to-moderate income borrowers and $75 million in charitable contributions.
SVB also committed to engaging with a community advisory council that included representatives from California and Massachusetts community groups. First Citizens has met with at least three community reinvestment groups following its acquisition of SVB.
First Citizens is not the only bank to face questions recently about the fate of a community benefits agreement in light of changed circumstances.
After TD Bank Group called off its acquisition of First Horizon earlier this month, community groups pressed the Canadian bank to
