By Stephone Coward
- Bank of America plans to hire 10,000 more employee from Low-to-Moderate-Income communities by 2025
- The Community Reinvestment Act requires banks to meet the needs of LMI communities they do business with
Bank of America (BAC +1.57%) ended the third quarter of 2021 by announcing through its Pathway program launched in 2018, that the company exceeded its five-year goal to hire 10,000 individuals from low to moderate-income (LMI) communities. Internally, it was deemed so successful that now the bank is expanding the program nationally and committing to hiring 10,000 more employees by 2025.
Why This Matters: Investing in underserved communities is a requirement of all institutions that receive Federal Deposit Insurance Corporation (FDIC) insurance, due to the passage of the Community Reinvestment Act (CRA) of 1977. Banks must meet the credit needs of communities that they do business within, including LMI neighborhoods, required by the CRA. Historically, LMI communities have been associated with communities of color.
Texas, one of the places that Pathways is operating in, says a household is LMI if “they make less than 80% of the area median income”. In 2020, the median household income for a Black people was $46,073 and $56,113 for a Hispanic people, compared to $76,057 for non-Hispanic white people.
The Black population numbers vary in the cities and counties where Bank of America is focusing its efforts. In Orange County, the Black population is 2.1%, 7.1% in Phoenix, 8.9% in Los Angeles, 23.6% in Dallas Fort Worth, and 24.3% in NYC.
Situational Awareness: For close to a decade, the voices of those demanding racial equity and economic justice have become louder, leaving companies no choice but to address it, or see their precious profits impacted. Bank of America does not have to worry about a lack of Black talent preventing it from meeting its 2025 goal. Black unemployment is still high, currently at 7.9%, significantly higher than the national 4.8% unemployment rate, which recently dropped from 5.2%.Here’s to small victories. We love to see it.
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