NEW YORK (AP) – Last month, predominantly black banks City First Bank in Washington DC and Broadway Financial in Los Angeles announced they would merge to create the United States’ largest minority depository institution, or MDI.
MDIs are banks and financial services companies majority owned by racial and ethnic minorities. They often function as conduits to poor neighborhoods, providing low-cost loans and access to capital that would generally not be available.
City First CEO Brian Argrett will be the new bank’s CEO once the merger is completed in early 2021. The combined bank will have around $ 850 million in deposits and $ 1 billion in assets. He spoke to The Associated Press about the merger and why minority-led institutions are important for racial and ethnic minorities to have a head start.
Q: How did you start working at City First?
A: I like to call myself an accidental banker. I ran a small business investment firm for many years. We focused on financing women and minority entrepreneurs. I joined City in 2011, after the financial crisis. City First was a lot smaller when I arrived, so we worked to grow on that basis.
Q: What has been the impact of COVID on your business?
A: Minority communities have been disproportionately affected by the pandemic. No more deaths. No more destruction of wealth. We saw this as an opportunity to help our communities even more. We have provided $ 30 million in paycheck protection program loans, most of it going to minority-run businesses, nonprofits, and rights groups. We also provided 1,300 loans under a program initiated by the mayor’s office in Washington, DC.
Q: Why does the country need minority depositories?
A: We have all seen the cumulative effects of centuries of racial inequality in this country – social unrest, higher unemployment, poverty. Economic injustice is at the root of racial injustice. This is why the work of MDIs and community deposit-taking financial institutions is more important than ever – they are squarely focused on these inequalities, like bringing capital to those who really need it.
Q: Why did City First and Broadway pursue this merger?
A: This merger had been under discussion for over a year, long before COVID. We focus on housing, non-profit finance, and small business finance. Broadway is also focused on commercial lending and has a very strong practice in affordable housing in Southern California. We will be able to increase the amounts of capital that we can offer and offer more systemic solutions to the problems we talked about earlier. It’s about creating a national platform where we can tailor our solutions to help address these issues that affect these communities.