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PNC Pledges $88B In Financing For Low-Income Communities Over Next 4 Years


PNC Financial Services Group has made an unprecedented financial commitment in the name of broadening access to financial services.

The bank, which more than doubled its profits on a year-over-year basis in the first quarter, announced a pledge of $88B over the next four years in a community benefits plan with the National Community Reinvestment Coalition on Tuesday. The $88B represents the "largest commitment ever pledged by a bank to the communities where it takes deposits," PNC said in its announcement.

The money will be divided between home purchase mortgages, small-business investments, and community development lending and investment. The home mortgage component represents $47B of PNC's total commitment, with the small-business component making up $26.5B and the CDLI component $14.5B. All of the capital is promised to communities of color and/or low- to moderate-income areas across the bank's entire footprint, the announcement said.

Driving PNC's big first quarter was a release of $551M in reserves it had put aside for loan losses due to the coronavirus pandemic last year that it decided were no longer at risk, according to the bank's quarterly earnings report. PNC Bank's $11.8B acquisition of Spanish bank BBVA's U.S. arm, announced in November, will close in the second half of this year, according to the report.

The $47B that PNC has pledged to home mortgages in low- and moderate-income communities more than doubles the previous such commitments of PNC and BBVA combined, the announcement said. Part of those funds will contribute to public down payment assistance funds, with a promise from PNC to directly address the appraisal gap that remains between White and minority households.

As part of its small-business commitments, PNC pledged to "increase the availability of technical assistance for LMI-, minority and women-owned small businesses, expand the activities of PNC’s Minority Business Development Group that leverages alternative lending options for LMI and minority business owners, and increase PNC’s financial support for Community Development Financial Institutions," the announcement said.

Included in the $14.5B CDLI commitment will be $4B of investments into Low-Income Housing Tax Credits and New Market Tax Credits, two key financial instruments in the creation of affordable housing. Another $1.5B will go toward investing in qualified opportunity zones as well as "economic empowerment and social justice efforts."