TD Bank Targets $20 Billion to Spark Economic Opportunities for Low- and Moderate-Income, Diverse and Underserved Communities across 15 States and Washington, D.C.

Rhea-AI Summary

TD Bank announced a three-year Community Impact Plan, investing $20 billion in lending, philanthropy, banking access, and other activities to benefit diverse and underserved communities. The plan includes support for residential lending, small business lending, community development loans, philanthropy, and banking access. It aims to empower low- and moderate-income, diverse, and underserved communities to achieve their financial goals.

Insights

Economist

TD Bank's Community Impact Plan is a strategic move that reflects a broader trend in the financial industry towards social responsibility and inclusive growth. The commitment of $20 billion towards lending and philanthropy is a significant capital injection into local economies, particularly in low- and moderate-income (LMI) and minority communities. By targeting areas such as affordable housing, small business support and community development, the bank is not only addressing social inequities but also potentially stimulating economic activity that could have a multiplier effect.

From an economic perspective, the focus on LMI and minority borrowers could lead to an increase in homeownership rates in these demographics, which is traditionally associated with wealth accumulation and community stability. The emphasis on small business lending, especially to minority- and women-owned businesses, aligns with data showing these entities often face greater barriers to accessing capital. By easing these constraints, TD Bank may contribute to job creation and innovation, which are critical for economic resilience and growth.

Moreover, the expansion of banking access and financial literacy programs can have long-term benefits by improving financial inclusion, which is a key factor in reducing poverty and boosting economic participation. The plan's success will depend on its effective implementation and the bank's ability to measure and report on its impact, which could set benchmarks for other financial institutions.

Market Research Analyst

TD Bank's initiative could resonate positively with socially conscious investors and customers, enhancing the bank's brand reputation and competitive positioning. In the current market, where consumers and investors are increasingly valuing corporate social responsibility, TD's plan could attract a customer base that prioritizes ethical banking practices.

Market analysis suggests that such community-focused initiatives can lead to customer loyalty and attract new clients who are looking for financial services that align with their values. Additionally, the commitment to diversely led organizations and the establishment of a Community Advisory Board could foster transparency and trust, which are essential for customer retention and acquisition in the banking sector.

However, it is important to monitor the allocation of these funds to ensure that they are reaching the intended recipients and having the desired impact. The bank's ability to report tangible outcomes will be critical in maintaining stakeholder confidence and justifying the investment. Furthermore, the plan's focus on opening new locations in LMI and majority-minority markets could address service gaps and tap into untapped market segments, potentially leading to increased market share for TD Bank.

Financial Analyst

The announcement of TD Bank's Community Impact Plan could have implications for its financial performance and stock valuation. Investors will likely scrutinize the plan's potential to drive long-term profitability through the lens of corporate social responsibility. While the upfront costs associated with the plan might be substantial, the long-term benefits, such as customer base expansion and risk mitigation through community investment, could outweigh them.

In terms of financials, the $10 billion earmarked for residential lending could stimulate mortgage origination revenue, while the $2.8 billion for small business lending might enhance commercial loan portfolios. The $7.5 billion in community development loans and investments could yield tax credits and other incentives, improving the bank's financial profile.

Investors should also consider the potential risks associated with this strategy, such as the default risks inherent in LMI lending. However, if managed effectively, these initiatives could improve the bank's risk profile by diversifying its loan portfolio and fostering economic stability in the communities it serves. It will be important to track the performance of these investments over time to assess their impact on TD Bank's financial health and shareholder value.

Community Impact Plan continues TD's local engagement with three-year roadmap 

• $10B in support of residential lending for LMI and/or minority borrowers
• $7.5B in community lending and investment
• $2.8B in small business lending
• $70MM in CRA-related philanthropy

CHERRY HILL, N.J.--(BUSINESS WIRE)-- TD Bank, America's Most Convenient Bank^®, today announced a three-year Community Impact Plan that will provide an estimated $20 billion supporting lending, philanthropy, banking access and other activities for the benefit of diverse and underserved communities. This strategy, developed with insight from the National Community Reinvestment Coalition (NCRC), will target communities across TD Bank's U.S. presence in 15 states and Washington, D.C.

“At TD Bank, we know our success is tied directly to the people and the communities we serve. When they flourish, we succeed,” said Leo Salom, President and CEO of TD Bank, America's Most Convenient Bank^®. “One of our primary objectives as a purpose-driven bank is to help power economic opportunities that help low- and moderate-income (LMI), diverse and underserved communities achieve their financial goals. Our Community Impact Plan is designed to achieve that vital role as we build on TD's long-term community focus.”

The Community Impact Plan expands TD's mission to positively impact social and economic outcomes for all who live in the communities it serves and enhance financial inclusion for diverse and underserved individuals and businesses.

“I’m glad to see TD’s leadership demonstrate a continued commitment to the values and principles that have guided our conversations to date and look forward to more strong collaboration in future,” said Jesse Van Tol, NCRC President and CEO. “Every bank should set ambitious goals for supporting underserved communities. And we’re pleased to provide strategic insights to advance this strategy. Those efforts can only be effective if they are informed by the input of community leaders like NCRC and our members. TD listened and then delivered this new Community Impact Plan to help ensure its investments and programs are aligned to community needs.”

TD Bank's Community Impact Plan comprises:

Mortgage Lending and Consumer Products
TD Bank will enable affordable home ownership by providing $10 billion in residential loans and liquidity to the residential lending market. This includes first-time homebuyer and home equity loans for LMI and minority borrowers, and in LMI and majority-minority census tracts, especially in the Boston, Baltimore, D.C., New York, Miami and Philadelphia markets. To support this goal, the bank will continue offering TD Home Access, a Special Purpose Credit Program, and other affordable residential lending products with low down payments and consumer-friendly terms.

The bank will continue offering and enhancing retail products and services designed to meet the needs of economically vulnerable consumers.

Small Business Support
The plan builds on TD's ongoing commitment to support the critical role small businesses play in local economies by offering an estimated $2.8 billion in credit to businesses with less than $1 million in annual revenue, with a focus on minority- and women-owned businesses and those in LMI areas.

TD Bank will create a lending Special Purpose Credit Program for small businesses that are registered Minority Business, women-owned or veteran-owned enterprises.

Community Development Loans and Investment
TD Bank will provide $7.5 billion in community development loans and other investments to support economic development activities and affordable housing projects, such as special rental housing for veterans or LGBTQ seniors, within TD markets.

CRA-Related Philanthropy and Sponsorships
The TD Office of Charitable and Community Giving will direct $70 million in Community Reinvestment Act-related philanthropy over the next three years in addition to its annual giving, with 75% of all giving supporting diversely led organizations.

This commitment includes the TD Charitable Foundation's first Capacity Building Fund for organizations with annual budgets of less than $2 million. The $1.75 million fund will support general-purpose operations and expenses to help non-profits remain open to serve their clients.

Banking Access
Consistent with TD's goal to make banking accessible to all customers, the bank will seek to open approximately 15 locations in LMI and/or majority-minority markets, subject to any regulatory approvals. This includes creating additional community-centered stores, which feature dedicated space that can be used for financial education workshops or non-profit meetings.

Additional Highlights

• Continue support of Community Development Financial Institutions (CDFIs)/Minority Depository Institutions (MDIs) through nearly $320 million in lending, investments and grants.
• Increase spending with certified diverse suppliers by 25%.
• Reach 54,000 participants through TD-led financial literacy and fraud prevention programs.
• Engage and support Historically Black Colleges and Universities (HBCUs) through recruitment of students and alumni and enhancement of financial access.
• Establish a Community Advisory Board who will advise and provide oversight of TD’s activities in support of the strategy.

About TD Bank, America's Most Convenient Bank^®

TD Bank, America's Most Convenient Bank, is one of the 10 largest banks in the U.S. by assets, providing over 10 million customers with a full range of retail, small business and commercial banking products and services at more than 1,100 convenient locations throughout the Northeast, Mid-Atlantic, Metro D.C., the Carolinas and Florida. In addition, TD Auto Finance, a division of TD Bank, N.A., offers vehicle financing and dealer commercial services. TD Bank and its subsidiaries also offer customized private banking and wealth management services through TD Wealth^®. TD Bank is headquartered in Cherry Hill, N.J. To learn more, visit www.td.com/us. Find TD Bank on Facebook at www.facebook.com/TDBank and on Instagram at www.instagram.com/TDBank_US/.

TD Bank is a subsidiary of The Toronto-Dominion Bank, a top 10 North American bank. The Toronto-Dominion Bank trades on the New York and Toronto stock exchanges under the ticker symbol "TD". To learn more, visit www.td.com/us.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240123140844/en/

Media:

Martha A. Gaston, APR

VP, Senior Corporate Communications Manager

TD Bank

martha.gaston@td.com

Source: TD Bank

FAQ

What is TD Bank's Community Impact Plan?

TD Bank's Community Impact Plan is a three-year initiative investing $20 billion in lending, philanthropy, banking access, and other activities to benefit diverse and underserved communities.

How much is TD Bank investing in residential lending?

TD Bank will provide $10 billion in residential loans and liquidity to the residential lending market, enabling affordable home ownership for low- and moderate-income and minority borrowers.

What is the focus of TD Bank's small business support?

TD Bank will offer an estimated $2.8 billion in credit to businesses with less than $1 million in annual revenue, focusing on minority- and women-owned businesses and those in low- to moderate-income areas.

What is the goal of TD Bank's community development loans and investment?

TD Bank will provide $7.5 billion in community development loans and other investments to support economic development activities and affordable housing projects within TD markets.

What is the amount of TD Bank's CRA-related philanthropy commitment?

TD Bank will direct $70 million in Community Reinvestment Act-related philanthropy over the next three years, with 75% of all giving supporting diversely led organizations.

What is TD Bank's objective for banking access?

TD Bank aims to make banking accessible to all customers, seeking to open approximately 15 locations in low- to moderate-income and/or majority-minority markets.

How is TD Bank supporting Community Development Financial Institutions (CDFIs)/Minority Depository Institutions (MDIs)?

TD Bank is supporting CDFIs/MDIs through nearly $320 million in lending, investments, and grants.

What is TD Bank's plan for increasing spending with certified diverse suppliers?

TD Bank plans to increase spending with certified diverse suppliers by 25%.

How many participants does TD Bank aim to reach through financial literacy and fraud prevention programs?

TD Bank aims to reach 54,000 participants through financial literacy and fraud prevention programs.

What is TD Bank's strategy for engaging and supporting Historically Black Colleges and Universities (HBCUs)?

TD Bank plans to engage and support HBCUs through the recruitment of students and alumni and enhancement of financial access.

What is the purpose of establishing a Community Advisory Board by TD Bank?

The Community Advisory Board will advise and provide oversight of TD's activities in support of the Community Impact Plan.

What are the additional highlights of TD Bank's Community Impact Plan?

TD Bank plans to continue supporting CDFIs/MDIs, increase spending with diverse suppliers, engage and support HBCUs, and establish a Community Advisory Board to provide oversight of its activities.