Every business needs to have cash on hand, but where it chooses to bank, it has ripple effects. Apple, which has an incredible $193 billion in cash, has begun placing some of it in credit unions and minority depository institutions that work with underserved communities.
The company announced today that it is working with CNote, an Oakland-based fintech platform, to put $25 million in CDs at mission-driven financial institutions, including Self-Help Federal Credit Union; the Bank of Cherokee County, Oklahoma; and the Latino Community Credit Union in North Carolina; among many others across the country. CNote has chosen institutions from an approved network of banks that can put the money to work in local communities now.
“We know that credit unions and community financial institutions are the foundation of so many communities,” says Alisha Johnson, who leads the Racial Equity & Justice Initiative at Apple, “especially those that are historically underbanked and n don’t have access to any sort of traditional bank. services.” At the Latino Community Credit Union, for example, 79% of customers are low-income and 65% did not have a bank account before; the credit union uses alternative tools to help establish credit when clients need loans to start a business or buy a first home.
By putting money into these institutions, Apple will help increase the ability of credit unions to work with customers, allowing more members of the community to obtain low-interest loans and avoid predatory lenders.
Apple’s largest initiative for racial equity and justice, with more than $150 million in investments to date, includes projects like a “developer academy” in Detroit and a new center for colleges and historically black universities in Atlanta. But part of the initiative is focused on economic empowerment, which has included further investments in venture capital and minority-run banks. “It was us looking not only at our own spending in supply chain and in professional services with underrepresented entrepreneurs and businesses,” Johnson says, “but also communities that have historically been underfunded and thinking, how can we have a greater impact on improving access to capital? »
A growing number of businesses are also beginning to transfer some of their money to help community financial institutions scale up their work. CNote also works with Patagonia, Netflix, Mastercard, PayPal, and Xylem, among others. Last year, Nerdwallet began working with Inclusiv, a nonprofit network of community development credit unions, to identify institutions it could support by transferring its money.
Apple hopes others will follow. “Whenever we do something like this, we try to be very transparent about it because we see this opportunity as having a ripple effect,” Johnson says. “And so, we certainly hope that companies looking to make similar investments, that have a similar mission, will see this as an example of something they can do.”