Green Bay-based
Associated Bank has increased its community commitment plan to $3.37 billion in lending and other support over the next three years, a nearly 40% increase compared to the previous plan.
The plan focuses on support for minority and low- to moderate-income communities and small businesses across Associated’s footprint in Wisconsin, Illinois and Minnesota.
“Associated Bank is committed to playing an active role in helping our communities grow and prosper. We are proud to continue increasing our efforts and investments for the greater good. It is core to who we are and how we work,” said Philip B. Flynn, Associated Bank president and CEO. “We have immersed ourselves in our communities, working with Community Advisory Councils in each of our major markets to address the most systemic economic development and equity issues.”
Most of the increase comes in commitments for residential lending, up from $1.4 billion to $2.4 billion. Community development loans and investments remain at $600 million as does $8 million in Community Reinvestment Act-qualified grants or in-kind donations.
The planned commitment in small business lending is down from the 2018-20 plan when it reached $425 million. The 2021-23 plan calls for $350 million in lending to small businesses.
Small business lending included in the plan includes companies with less than $1.6 million in revenue, loans smaller than $1.6 million in LMI or minority census tracts and Small Business Administration loan programs.
LaDonna Reed, director of community accountability for Associated Bank, pointed out that the previous plan overlapped for a year with the 2016-18 plan and so benefited from the certainty of lending that had already taken place, and existing momentum.
For the current plan, Reed said Associated wanted to account for economic uncertainty coming out of the pandemic, smaller loan sizes and the existence of grant programs and other support that may lead small businesses to hold off on seeking a loan.
“We wanted to make sure we were being realistic but we also wanted to make sure we didn’t rest on our laurels,” she said, adding the team expects to hit and exceed the target.
Reed said small businesses would do well to establish banking relationships early to be able to address issues – like inventory management or poorly tracked finances – that might limit their ability to get a loan later.
The community commitment plan itself is an outgrowth of a conciliation agreement Associated reached in 2015 with the U.S. Department of Housing and Urban Development. HUD had alleged Associated had lower levels of lending in majority-minority census tracts compared to other lenders. The agreement called for new branch locations in Racine, Milwaukee and Chicago, special financing programs and targeted outreach and homebuyer education.
Reed said the commitments from that agreement were completed by the second quarter of 2018, but the bank has continued on with many related efforts.
“For us, it really became a true focus and helped us stay true to what we committed to do,” she said.
The plan does not incorporate specific targets for markets within the bank’s footprint. Reed said that helps to prevent limiting of additional lending once a geographic area has met its target.
