U.S Bank receives $60 million of New Markets Tax Credit allocation
November 03 2022 - 12:07PM
Business Wire
Funds will be intentionally used to support
projects, job creation in communities of color
U.S. Bank’s community development entity (CDE) – USBCDE, LLC –
received $60 million of New Markets Tax Credit (NMTC) allocation
from the U.S. Department of Treasury. The allocation was among the
largest awarded in this round and is part of the federal
government’s $5 billion NMTC program, which helps economically
distressed communities attract private investment capital.
USBCDE was one of 107 CDEs to receive a share of the NMTC
allocation authority package announced by the Treasury’s Community
Development Financial Institutions Fund (CDFI Fund). It’s the
bank’s 12th allocation under the NMTC program and the fifth year in
a row it has received an award. Since its inception, USBCDE has
invested more than $870 million in communities across the country,
helping create more than 59,000 jobs and increasing the capacity
served at community facilities like schools and health care centers
by more than 1.8 million people annually.
Some recent projects USBCDE has financed with its allocation
include an expansion of the Dewberry, a multi-tenant healthcare
facility in Birmingham, Alabama, serving low income uninsured and
under-insured people living with HIV/AIDS; the purchase of
equipment and inventory for Ogaakaaning Wild Rice in Bemidji,
Minnesota, which is the first business owned by the Red Lake Nation
of Chippewa to operate off the Red Lake Nation Reservation; an
infrastructure project in the Crenshaw neighborhood of Los Angeles
that will create a hub for Black art, culture and commerce,
including pocket parks, landscaping, public art and support to
local businesses; and a complete redevelopment of the historic
Lexington Market, one of the country’s oldest markets and key
anchor of Baltimore’s downtown west side.
The NMTC program is an economic development tool that infuses
capital in areas that need it most. CDEs allocate tax credits to
projects, attracting private investment capital that helps grow
businesses and create jobs in economically distressed communities.
According to the Department of the Treasury, NMTC program awards
generate more than $8 of private investment for every $1 invested
by the federal government.
In addition to the work done through its CDE, U.S. Bank is also
the most active NMTC investor in the country, having invested more
than $7.3 billion nationwide in a wide variety of economic
development projects nationwide.
Laura Vowell, managing director of Community Finance Solutions
for U.S. Bancorp Community Development Corporation – the tax credit
and community investment subsidiary of the bank –credits the CDE’s
strategic shift several years ago to use its allocation to drive
investment to communities of color, where racial barriers have
perpetuated inequities.
“We are intentional about how we invest our own allocation,
focusing on purposeful equity. We prioritize projects that help
reduce the racial wealth gap, create quality jobs, provide critical
services and build wealth by making investments that support or are
owned or led by people of color,” said Vowell, who heads the bank’s
NMTC business and USBCDE, LLC.
Fee income collected through these projects is also reinvested;
USBCDE distributes it as grants to organizations with a racial
equity focus and has provided $6.9 million to organizations and
communities since 2013.
“We take our role as a large investor very seriously,” Vowell
said. “We’re constantly looking for ways we can better leverage our
power and influence to advance racial equity in the industry.”
In addition to being a vocal advocate for greater equity in the
NMTC industry, U.S. Bank has provided technical assistance, grant
dollars and referrals for third-party support to several person of
color-led CDEs to assist in completing the allocation application.
USBCDE also deploys some of its own allocation to emerging and
person of color-led CDEs through the intermediary CDE model – a
partnership that helps the CDE build a NMTC track record, offers an
opportunity to deploy this resource within their selected
community, and is a potential factor for success in gaining future
allocation.
Overall, about 20% of this year’s allocatees and allocation went
to CDEs led by persons of color.
“We’re happy to see modest improvement in representation with
this round of allocations,” Vowell said. “We’ll continue to look
for ways we can personally partner with and support person of
color-led CDEs in earning their own allocation.”
USBCDE's intentional focus on racial equity supports U.S. Bank
Access Commitment, the company’s long-term approach to help build
wealth while redefining how the bank serves racially diverse
communities and providing more opportunities for diverse
employees.
About U.S. Bank
U.S. Bancorp, with approximately 70,000 employees and $601
billion in assets as of September 30, 2022, is the parent company
of U.S. Bank National Association. The Minneapolis-based company
serves millions of customers locally, nationally and globally
through a diversified mix of businesses: Consumer and Business
Banking; Payment Services; Corporate & Commercial Banking; and
Wealth Management and Investment Services. The company has been
recognized for its approach to digital innovation, social
responsibility, and customer service, including being named one of
the 2022 World’s Most Ethical Companies and Fortune’s most admired
superregional bank. Learn more at usbank.com/about.
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version on businesswire.com: https://www.businesswire.com/news/home/20221103006004/en/
Cassie Wagner, U.S. Bank Communications
Cassie.wagner@usbank.com
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