Skip to Content
Bank of America Coronavirus Resource Center See details

Watch Brian Moynihan on CNBC’s “Mad Money” with Jim Cramer

Creating Wealth in Underserved Communities

Brian Moynihan joined Jim Cramer on Mad Money to discuss the Bank’s efforts to serve communities in need.

COPY-01-21-2477

Clip of Brian Moynihan on CNBC

Brian Moynihan on CNBC’s “Mad Money,” December 18, 2020

((TRANSCRIPT))

Jim Cramer:

Over the summer, after the tragic killing of George Floyd, lots of companies started talking about the importance of racial justice, but not many of them did anything tangible. But Bank of America actually put money to work. On June 2, they announced a $1 billion commitment to help underprivileged communities, and the last six months they’ve started putting that cash to work. We’re talking job initiatives in Black and Hispanic communities, outreach programs and direct investments in minority-owned businesses.

Then in October, because they knew there was more heavy lifting to be done, Bank of America took equity stakes in 10 community development financial institutions (CDFIs, they call them), outfits that provide financial services to people and businesses that mainstream banks rarely do business with. You know what? I think it’s important to give companies credit when they do something good around here. So let’s take a closer look with Brian Moynihan — he’s the chairman and CEO of Bank of America — and Darren Williams, who’s the CEO of Southern Bancorp, which is one of those community development institutions that Bank of America just invested in. He’s going to be joining us in a couple minutes as well.

Brian, first of all, thank you for helping out at a time when I think a lot of people realize that there are so many who are unfortunate. Why don’t you tell us a little bit about what the bank has committed to doing and why.

Brian Moynihhan:

Well, Jim, thank you for having me. It’s a snow day up here, so I’m dressed a little casually, but what we decided, we took a look at economic mobility, and we’ve been looking at that in our 90+ markets we serve in the U.S. for over a year. And then you add the killing of George Floyd and the aftermath of that, and the social and racial unrest, and it brought to the surface a lot of issues. And as you said in your introduction, we decided to put our money where our mouth is. So we were going to do a program of such size, and we doubled it, and we said let’s get the money to work, to help, really, along four dimensions: health, jobs (up-skilling, re-skilling, working with schools and community colleges), small business entrepreneurship and housing. And we have then started doing it. So one of the parts of that was to invest in, to increase our investment in CDFIs, which is sort of lending to them, that’s a billion seven, but then we said they need equity, both CDFIs — which you mentioned, community development financial institutions — and MDIs, minority depository institutions — owned that way, and we started putting equity in the MDIs also, and so now we completed 10 of those, actually we’ve completed 12 now, and we’ll keep working on all 140-odd of them that there are to see if they need equity to grow. And it’s all about creating wealth in the communities, providing direct equity not only in the institutions that do financial work but also 200 million to go into other companies that we’re moving through and getting out in the public, helping schools — 21 college grants in HBCU and community college grants — and then housing, and 15 million masks given to community health care centers and stuff to help their communities stay safe during this pandemic.

Jim Cramer:

Brian, I’d say 10, 15 years ago, this would not be the province of a bank. This is a unique passion of yours. You’re a leader in these issues. Other people listen, say “I’ve gotta be more like Brian.” How did you get passionate when we expect so much dollars and cents simply from bankers?

Brian Moynihan:

Well, we have to serve both society, make money for our shareholders and society, what people call stakeholder capitalism. So we think about our company along four dimensions. We’ve got to drive response growth, got to be there for our customers, we got to be there for our shareholders, we got to be there for our employees — and in this pandemic, that was a…we did a lot of great work there — and we got to be there for society. That’s what we’ve been running the company at for a long time, and this is a part of that. Now, there are unique issues around…the issues that come up with racial and social justice in the United States: economic mobility, wealth creation and wealth gaps. Those are specific issues, so this billion-dollar program is above and beyond all the other work we do in low- and moderate-income lending, in small business lending ($28 billion in small business loans out there), this is a special program to really focus in on help creating wealth in these communities and providing greater economic mobility and activity. But it all comes back to basically delivering for our shareholders and delivering for society.

Jim Cramer:

Well, I want to bring in one of the people, one of the institutions that Bank of America has helped. I want to bring in Darren Williams. He’s the CEO of Southern Bancorp. Darren, I think a lot of people say things are for show, but from what I hear about what Brian and Bank of America are doing, this is real jobs they’re creating, real dinner on the table. Tell us about what it means.

Darren Williams:

Jim, you’re exactly right. First of all, thanks for having us, and really, thank you for highlighting what Bank of America is doing, what Brian is doing. He is the real deal. This equity that is being placed into Southern Bancorp, it’s allowing us to grow, to expand our footprint into more underserved communities where we use our unique brand of banking to really touch those who are often not touched by other banks, to help them build wealth and increase our economic mobility.

Jim Cramer:

So why don’t you give me, maybe you have a couple examples, of companies that are really good, and if they were in another neighborhood, perhaps everyone would be fighting to lend them. But because you’re in the community, and now you’ve got the money, and the deposit base, you can make them grow and be big companies.

Darren Williams:

No, exactly, Jim, so I’ll give you a couple examples. One, one company, Hoffinger Industries, located in Phillips County, Arkansas, one of the most underserved, one of the most, one of the poorest counties in America. Hoffinger’s, they make Doughboy Pools, which is one of the largest and most popular above-ground pool manufacturers in the country. When the owner of that company died, the company was about to be sold overseas, and those jobs would have left that market. And Phillips County only has about 12,000 people in the county, and again that’s about 110 jobs. We worked with the management to do a management-led buyout, so that managers of that organization could buy the organization and keep those jobs right there in Phillips County, which was desperately important for the economic well-being for that community. And there’re countless examples of both businesses and individuals. You know, I can think of Miss Bernetha Jackson. She lives also in that same town, she’s a 60-plus-year-old grandmother. She was a first-time homebuyer; after spending several years going through financial education and homebuyer counseling with Southern, she was able to buy her first home. Now she’s got an asset that can be carried down through her family and help build that family’s economic mobility and build their wealth.

Jim Cramer:

How did you connect with Brian?

Darren Williams:

Well, Brian connected with us. You know, so, it’s really…what Bank of America is doing is catalytic for us. We’re so excited to have this partnership and hope that it will allow us to partner with other folks. But Bank of America reached out to us. They said, we want to help, we heard about the work that you do, and we want to invest in your bank, take an equity stake, become a real, true partner with us, and that is, again that is catalytic, it’s going to allow us to grow and expand our footprint.

Jim Cramer:

All right, so Brian, what you’ve done with Darren’s institution is something that I wish the government would do, frankly. Let’s talk about the government for a second. The government wants to give a little bit of money to everybody. Wouldn’t it be better, Brian, to give a lot of money to the people who need it, like some of Darren’s customers, and not my kids?

Brian Moynihan:

Well, I think, frankly, Darren’s done a great job, and we’ve been in the White House on a PPP program and stuff, and his institution’s done a great job, and that caught my eye, frankly, and he may not know that, but it caught my eye, so when we started this program, I said find this company and figure out what they do.

We’ve had a long relationship to them. A fellow named Dan Letendre’s worked with them for years, because he’s a CDFI [executive] in a technical forum, and then Donnie Cook, our market president, knows him, so those relationships go back. But this is more about his business plan, his capabilities, what he can do for his customers and us putting equity in. I’m not sure the government taking equity stakes is the right answer. I think there’s enough money in private industry, capital isn’t [inaudible], there’s a lot of capital out there, and there’s a lot of other institutions that are looking to do this, and my point to them, back to your point, is get going, get the money out there. Call Darren up and see what he needs. Does he need preferred stock, common stock, but help him grow, and there are many like him, so that they can provide services in places that might not be as easy for other companies. And so I think the business roundtables put together some principals and their memberships moving on this, and I think there’ll be lots of private capital. I think the government needs to solve the problems of the pandemic, and that’s hopefully why the stimulus gets done, and we get that done, and that keeps propelling us forward. But I think right now there’s a lot of private capital that wants to help solve this long-term problem in America, and it should come to [inaudible], and I think Darren is a classic case of a person who will use that investment and do good things.

Jim Cramer:

Well, Darren, I want to wish you, of course your family, good holidays, and I want to wish Southern Bancorp be able to make all the loans, the good loans, that people really need in this country. Thank you.

Brian, I can’t resist, I’ve got to ask you one question about business. December, apparently, spending’s good, which is I think a terrific harbinger for next year.

Brian Moynihan:

Yeah, I think, Jim, I just checked it again, ‘cause I figured you might ask me about that, but the consumer spending for the month of December to date is up 10% over last year’s December through the first 13, 15 days, and that’s very good. And that means some of the November shift into December, so you saw recent retail sales, because of the dynamics around Thanksgiving with the COVID crisis. We need to get this stimulus passed so that we can help build that bridge for that part of the economy that can’t be opened, that can’t be in business, to get it set so it can get there. Now that we have this vaccine, you can see the light at the end of the tunnel. We just have to provide a bridge for companies and individuals to get there. But meanwhile, the people who are employed and have the money are spending, and that’s good news for the economy, so we feel that the fourth quarter is setting up to be a little stronger than people thought, and we think next year will be plus 4% GDP growth in the United States, which continues that recovery.

Jim Cramer:

Well, that would make it so more people can enjoy the good fruits of this country, and that’s what we need. And Brian, you told a lot of people exactly that that is what we need. I want to thank Darren Williams, and I want to thank Brian Moynihan, for doing everything they can for thousands, hundreds of thousands, millions of people in this country who need help, and it’s good business to help people who need help. Thank you both, gentlemen.

Related Insights

TOP