Every business needs to have cash on hand—but where they choose to bank it has ripple effects. Apple, which has an astounding $193 billion in cash, has started putting some of it in credit unions and minority depository institutions that work with underserved communities.
The company announced today that it’s working with CNote, an Oakland-based fintech platform, to put $25 million in CDs at mission-driven financial institutions, including the Self-Help Federal Credit Union; the Bank of Cherokee County, in Oklahoma; and the Latino Community Credit Union, in North Carolina; among several others across the country. CNote chose the institutions from a vetted 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 bedrocks of so many communities,” says Alisha Johnson, who leads the Racial Equity & Justice Initiative at Apple, “especially those that are historically underbanked, and lack access to sort of traditional banking services.” At the Latino Community Credit Union, for example, 79% of customers are low income, and 65% didn’t previously have a bank account; the credit union uses alternative tools to help establish credit when customers need loans to start a business or buy a first home.
By putting cash in these institutions, Apple will help expand the credit unions’ capacity to work with customers, allowing more community members to get low-interest loans and avoid predatory lenders.
Apple’s larger Racial Equity and Justice Initiative, with more than $150 million in investments so far, includes projects like a “developer academy” in Detroit and a new hub for historically Black colleges and universities in Atlanta. But one part of the initiative is a focus on economic empowerment, which has included other investments in venture capital and minority-led banks. “It was us looking not just at our own spend in the supply chain and across professional services with underrepresented entrepreneurs and businesses,” Johnson says, “but also looking out into communities that have been historically under-resourced and thinking, How can we have a greater impact on improving access to capital?”
A growing number of companies are also beginning to move some of their cash to help community financial institutions scale up their work. CNote is also working with Patagonia, Netflix, Mastercard, PayPal, and Xylem, among others. Last year, Nerdwallet started working with Inclusiv, a nonprofit network of community development credit unions, to identify institutions that it could support by moving its money.
Apple hopes that others will follow. “Anytime we do something like this, we try to be very transparent about it because we view this opportunity to have a ripple effect,” Johnson says. “And so, we certainly hope that companies that are looking to make similar investments, that have a similar mission, will see this as an example in something that they can do.”