Yelp announced today that it is depositing $10 million into three Black-owned banks across the country to help further support underserved communities.
Carver Federal Savings Bank, headquartered in New York, and Citizens Savings Bank and Trust Company, headquartered in Tennessee, will each receive $2.5 million from Yelp. Broadway Federal Bank, headquartered in California, will receive $5 million, as it will soon merge with City First Bank in Washington, D.C.
"We know that financial services or access to financial services and access to capital is not equitably distributed in the United States," David Schwarzbach, chief financial officer at Yelp, tells CNBC Make It. "And at Yelp, our mission is to bring consumers together with great local businesses and to support a vibrant local community."
Right now, there are 143 Minority Depository Institutions in the United States, according to government data. This includes banks with at least 51% of its voting stock being minority individuals, or banks that serve mostly minority communities with a board of directors made up of mostly minority individuals. Of those 143 banks, just 18 are Black-owned, a number that is half of the 36 Black-owned banks that existed 15 years ago.
Schwarzbach, who spent time in his career helping to deliver financial services to underbanked and unbanked communities before joining Yelp earlier this year, says that the company's latest investment is part of its commitment to providing equitable opportunities to Black-owned businesses and Black-owned financial institutions.
"All of these banks have been at work for decades and we wanted to support their mission," Schwarzbach says in regards to why they chose these three banks specifically. "They've shown their ability to support the communities in their area and their commitment to support low and moderate income communities and support Black-owned business."
Carver Federal Savings Bank, which has been around for 74 years, has held on to its mission of providing customers from all income levels with access to loan capital and financial education with 74% of its loans going to low to moderate-income communities. During the pandemic, the bank also played a critical role in supporting Black-owned business by providing $35 million in access to capital to local businesses through the Paycheck Protection Program (PPP) loan. According to reports, experts feared that up to 90% of minority and women-owned businesses would be shut out of the PPP loan because many of these businesses are underbanked, leaving little room for them to access the loan from a mainstream bank that prioritized existing customers.
In a statement, Carver revealed that Yelp's $2.5 million deposit will help the company accelerate its mission of serving low to moderate-income communities in the New York City area.
Citizens Savings Banks, which has been in operation since 1904, provides financial opportunities to underserved communities in the Nashville and Memphis, Tennessee areas. This year alone, the bank funded over $1 million in loans to local small businesses, with Yelp's recent deposit helping the financial institution further its mission of providing economic growth and financial literacy to local community members.
Broadway Federal Bank, founded in 1946, revealed in a statement that Yelp's $5 million deposit will help the financial institution "address the critical need of affordable housing for low to moderate-income communities, with a particular focus on multi-family housing lending within Los Angeles communities."
Already, Broadway partners with many organizations, and the city of Los Angeles, to help decrease the number of unbanked local residents by encouraging more banking locations in underserved communities. Additionally, the bank works with low and moderate-income level individuals, persons with disabilities, elderly residents and limited-English-speaking residents to provide free tax assistance as they prepare their tax returns.
Yelp's $10 million deposit into these banks is a follow-up to the company increasing the visibility of Black-owned businesses earlier this year by adding a search feature that allows businesses to self-identify as Black-owned so they can be easily found on Yelp's platform. As a result, Yelp says it saw a 35x increase in search rates for Black-owned business compared to last year.
To further show its commitment to supporting Black-owned businesses, Yelp also partnered with the 15% Pledge to ensure that at least 15% of its vendors for events are Black-owned. Similarly, Yelp created a Latinx-owned search attribute to help amplify Latinx-owned businesses and the company partnered with Momento Latino, a coalition of Latinx activists and leaders, to help further understand the needs and challenges of the Latinx community.
Miriam Warren, SVP of engagement, diversity & belonging at Yelp, says that partnering with these organizations helps Yelp to "really connect with those communities and ensure that [they] are accurately representing those communities" in the best way.
In addition to its external efforts to help further support Black and Brown communities, Warren points out that Yelp has also made some internal improvements with its employee population as well. As of September 30, 26.8% of Yelp's employees identify as an underrepresented minority including Black, Latinx or Native American. That number is a 13.6% increase from the same time last year.
Warren credits this growth to new anti-bias trainings, employee resources groups and reporting processes in which senior leaders report diversity data in monthly meetings to ensure that they "continue to not only diversify the organization, but ensure that leadership is also representative of the organization as a whole."
"You can measure commitment in a lot of different ways, and representation obviously is one of them," she adds. "But, I think the key thing that we've also learned this year is that we can use our platform to raise awareness, to promote economic opportunity and to support our local communities."