Dear reader,
Welcome to the eighth edition of The Forum File. In this edition, we are highlighting how our members are assisting small businesses through their pandemic recovery and creating networks of support for women entrepreneurs.
Thank you for your readership throughout the year as we launched this newsletter. I wish you a wonderful holiday season and look forward to continue collaboration in 2022.
Kevin Fromer, President and CEO, Financial Services Forum
Penny for Your Thoughts
Derek Ellington was recently named Head of Small Business Banking for Wells Fargo.
After spending 28 years in the financial industry with roles in retail banking, commercial banking, small business banking and credit, what’s ahead for small businesses and how is Wells Fargo helping them move from relief to recovery?
When you think about the fact that small businesses employ about 46% of all Americans, small business is really big business, and entrepreneurs will be at the forefront of our country’s economic recovery. They pump life into our neighborhoods, making them vibrant places to live and work and raise families – and they are the key to millions of local jobs. We’re also seeing an explosion of small businesses owned by women and minorities despite the pandemic and barriers that have historically prevented their businesses from reaching full potential.
There are some bright lights ahead, but small businesses are still very vulnerable and the public and private sector needs to continue making equity a priority. Banks like Wells Fargo need to continue being very intentional about investing in different solutions that can make entrepreneurship more accessible to more people.
For both new and established small businesses that need to stabilize coming out of the pandemic, owning more of their businesses’ assets, such as property, equipment and technology can be a game changer. According to a 2021 survey conducted by Morning Consult, three out of four (74%) small business owners say owning their physical assets or improving equity in their assets is a top priority, and 57 percent believe owning all their physical assets debt-free would significantly improve the financial health of their business. As an example, in Charlotte we’ve kicked off a $20 million effort through our Open for Business Fund which will distribute funding in the form of grants that do not need to be repaid, in an effort to help entrepreneurs build wealth through their businesses without taking on additional debt. We’re looking forward to applying this type of thinking in other cities next year.
Can you tell us more about the Open for Business Fund?
Wells Fargo’s goal throughout the pandemic has been to help as many small businesses as we could. In the early days of the pandemic, the company moved quickly to implement accommodations, and we’ve been able to help more than 3 million small business customers across the country access the resources they needed to survive. We also played a key role in helping small businesses access loans through the Paycheck Protection Program (PPP), helping nearly 282,000 small businesses get the funding they needed to keep 1.7 million people at work.
The PPP provided a lifeline to thousands of businesses, but we understood very early on that one program wasn’t enough to enable small business to bounce back from so much economic disruption. Wells Fargo created the Open for Business Fund in July 2020 by donating the gross processing fees it made from administering Paycheck Protection Program loans in 2020. Through this roughly $420 million small business recovery effort, we’ve collaborated with Community Development Financial Institutions (CDFIs) and local nonprofits to deploy low-cost capital, technical expertise and recovery resources to small businesses across the nation.
What’s exciting about the Open for Business Fund is this philanthropic capital is strengthening the network of resources available to entrepreneurs and it is foundational to CDFIs being able to expand lending in their communities. Through October 31, the Open for Business Fund is projected to reach more than 150,000 small business owners, enabling them to help protect an estimated 250,000 jobs.
Value Add
Member program spotlight
Giving small business founders a circle of support
Healthy and growing women-owned businesses are vital to an inclusive economic recovery, yet women entrepreneurs face distinct challenges, including fewer resources and less access to professional networks, on top of having a greater share of caregiving duties. As part of the Open for Business Fund, a roughly $420 million national small business recovery effort, Wells Fargo is working with nonprofits such as Nasdaq Entrepreneurial Center to provide women and diverse entrepreneurs with greater access to experts, business coaching and mentors that can help them grow.
With this funding, the Nasdaq Entrepreneurial Center started mentoring and providing peer support to women business owners from predominantly underrepresented communities through Milestone Mapping Coaching Circles. In small groups, women entrepreneurs participate in a 12-week-long coach-guided program, where they receive support with business planning, revenue generation, customer leads, marketing and more, helping founders anchor focus to their biggest vision and gain clarity on the key business priority for next quarter.
Each Circle is open to all women-identifying business owners in the U.S. and provides a biweekly opportunity for women entrepreneurs to work through specific challenges, celebrate milestones, attend workshops and connect with small business experts and mentors. Interested participants complete an application and, upon acceptance, are placed in a Circle and matched to certain cohorts based on their challenges. Wells Fargo will offer Milestone Mapping Coaching Circles throughout the year and into 2022, with the goal of helping 500 women-owned small businesses.
Capitol Gains
What we’re doing in Washington
The Forum joined other trade associations in authoring a letter to the House of Representatives urging the passage of H.R. 4616, the “Adjustable Interest Rate (LIBOR) Act,” to address “tough legacy” contracts that currently reference LIBOR. The Forum encouraged the U.S. Senate to act swiftly on the measure after it passed the House with strong bipartisan support on December 8.
We highlighted Forum member leadership in offering low-cost checking accounts with no overdraft fees and ensuring banking services are transparent, accessible and understandable.
The Forum congratulated Federal Reserve Chairman Jerome Powell on his renomination and Dr. Lael Brainard on her nomination for vice chair.
The Forum and the Bank Policy Institute authored a joint letter to the House Financial Services Committee expressing support for the Fair Hiring in Banking Act, which would enable banks to offer more job opportunities to rehabilitated people with prior criminal offenses.
Our Two Cents
Research from the Forum
The BankNotes blog spotlighted:
- The Fall 2021 Federal Reserve Financial Stability Report highlighted how banks, and Forum members in particular, have actively contributed to U.S. financial stability. The report in particular showed the high levels of capital and liquidity held by U.S. Global Systemically Important Banks.
- U.S. regulators should consider a European proposal as they move forward with Basel III Finalization to ensure credit is not unnecessarily restricted for creditworthy companies that contribute to the U.S. economy.
- The Federal Reserve should modify the SLR to ensure that it remains in the background and does not serve as the binding capital constraint.
Checking the Balance
Members in the news
Bank of America announced a multi-year, $10 million commitment to Charlotte-based Johnson C. Smith University (JCSU), one of the leading private liberal arts Historically Black Colleges and Universities in the South. Bank of America’s pledge to JCSU is part of its $1.25 billion, five-year commitment announced last year to help advance racial equality and economic opportunity in local communities.
BNY Mellon hosted its first-ever Global Giving Tuesday Campaign, double-matching employees’ contributions to select nonprofits from November 30 through December 7. BNY Mellon employees could select one of 14 high-impact charities to receive a 2:1 match, up to $10,000, or the local equivalent. This campaign supplemented the bank’s regular year-round matching program, in which BNY Mellon matches 1:1 up to $5,000.
Citi and the Citi Foundation announced the Action for Racial Equity initiative has invested $1 billion in strategic initiatives to help close the racial wealth gap and increase economic mobility in the United States in year one of a three-year commitment. Citi said it is on track to far exceed its original $1.1 billion commitment announced in September 2020. In particular, Citi has exceeded its $350 million procurement goal for its investments in Black-owned suppliers.
Goldman Sachs was named to the Forbes Inaugural Green Growth 50 list. Goldman Sachs was recognized as a leader in supporting long-term economic opportunity and prosperity while also reducing its greenhouse gas emissions and meeting sustainability goals.
JPMorgan Chase and Youth Guidance announced an expansion of their respective programs, The Fellowship Initiative (TFI) and Becoming a Man (BAM), to Washington D.C. to help young men of color forge local pathways to graduation and post-secondary success. TFI and BAM will work with District of Columbia Public Schools to improve the economic and social outcomes for hundreds of young men of color. Through this intensive, multi-year school-based program high school students will receive academic coaching, college and career readiness services, social and mental health support, and leadership development that helps put them on a path toward greater economic mobility.
Morgan Stanley announced the launch of The Equity Collective, an industry leading group of Wealth Management and Asset Management businesses who have come together to educate, empower and develop the next generation of diverse leaders in the finance industry. The Equity Collective is composed of 25 members. Senior leaders across each member organization will participate in education and awareness events and initiatives in this multi-year commitment, which includes exclusive sponsorships with the Boys & Girls Clubs of America, HIVE Diversity and Team IMPACT.
State Street presented the 2021 Massachusetts Conference for Women, which focused on leadership, career advancement, equity and inclusion and personal development. The conference featured keynote speakers, networking opportunities and skills training to thousands of women and offered workshops dedicated to issues such as personal finance and entrepreneurship. State Street has sponsored the Massachusetts Conference for Women for over a decade.
Wells Fargo announced the launch of “Hope, USA,” an initiative to support small businesses nationwide. Through this effort, Wells Fargo will help beautify business districts in more than a dozen cities across the country and encourage shopping locally this holiday season. Hope, USA builds upon the firm’s roughly $420 million commitment to small businesses through its Open for Business Fund.