(BPRW) Citi Announces Partnership with Minority-Owned Depository Institutions to Purchase Paycheck Protection Program Loans
Part of Citi’s Ongoing Commitment to Expand Networks and Facilitate the Inclusion of Community Banks and Minority-Owned Depository Institutions
(Black PR Wire) NEW YORK–(BUSINESS WIRE)– Citi today announced a partnership program with the National Banking Association (NBA), where Citi has created a purchasing facility that allows it to buy loans in the secondary market from Minority-Owned Depository Institutions (MDIs) originated under the Small Business Administration (SBA) Paycheck Protection Program (PPP). Citi’s purchasing facility will assume up to $50 million in SBA loans from MDIs, which serve urban and underserved communities.
This is part of Citi’s ongoing commitment to expand networks and facilitate the inclusion of community banks and MDIs to better serve diverse communities. Citi was the first bank to help launch and pilot the US Department of Treasury’s Financial Agent Mentor-Protégé Program that pairs designated financial agents with MDIs.
NBA Member Banks that are MDIs and have SBA PPP lender approval (Member Banks) are able to take part in this purchasing program with Citi. This partnership will provide Member Banks with capital by enabling them to sell loans originated under the PPP to Citi in the secondary market. This asset purchase will move the loans off the MDI’s balance sheet and over to Citi. Servicing of the loans will remain with the originator banks and MDIs participating in the program have the potential to retain 100% of the fees earned through the origination of the loan through the SBA.
As part of the program, Citi will purchase up to $50 million of existing SBA approved PPP loans from MDI Member Banks, including Unity National Bank, with the expectation that other MDI Member Banks will participate.
“Our country needs banks of all sizes to serve businesses of all sizes and from all communities. Citi actively partners with minority-owned banks to support their vital efforts to serve their diverse client base, and we applaud the work they did to ensure that the benefits of the PPP program reached minority-owned businesses,” said Michael Corbat, CEO of Citi.
“We are pleased to participate in this asset sale with Citi. Unity was one of the first MDIs to solidify terms on this important initiative as we have witnessed firsthand how this pandemic has been felt most acutely by small business owners in the communities where we operate. By moving these loans off our balance sheet, we are able to redeploy capital into further assisting our customers and supporting our local economy,” said Laurie Vignaud, CEO of Unity National Bank.
Citi also recently announced its decision to donate its net profits earned through its own participation in the PPP to the Citi Foundation. The Citi Foundation will use the funds to expand its support of Community Development Financial Institutions delivering recovery capital to underserved communities. This new effort complements the Foundation’s COVID-19 U.S. Small Business Relief Program, which it launched earlier this month with an initial $7.5 million in funding to support efforts by Community Development Financial Institutions to serve small, diverse entrepreneurs.
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
Additional information may be found at www.citigroup.com | Twitter: @Citi | YouTube: www.youtube.com/citi | Blog: http://blog.citigroup.com | Facebook: www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi
View source version on businesswire.com: https://www.businesswire.com/news/home/20200520005171/en/
Source: Citigroup Inc.
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