Small business owners like me understand that running a small business is a privilege, but it comes with its challenges. We need all the support we can get to be successful, which is why I am excited about the Capital One-Discover merger, and the Community Benefits Plan that comes with it.
For many aspiring small business owners, especially from marginalized communities, access to credit can be the difference between opportunity and adversity. Capital One has proven its commitment to uplifting aspiring business owners in these communities by bringing services to them, unlike other major banks. One-third of their branches are located in low- and moderate-income (LMI) neighborhoods, and they rank first among larger banks when it comes to serving LMI neighborhoods.
Capital One is also the largest issuer of credit cards to first-time cardholders and has a strong track record in assisting customers enhance their creditworthiness. As of March 2024, 69% of their customers who started with subprime credit scores have successfully elevated their scores to prime levels of 660 or above. This achievement is especially meaningful for minority communities, as a healthy credit score is the first step to securing a small business loan.
Moreover, Capital One’s involvement in initiatives like the White House’s Economic Opportunity Coalition demonstrates a commitment to supporting diverse communities and investing in minority-owned businesses. By partnering with Discover, a newly formed Capital One-Discover Bank can reach even more communities that are often overlooked by other financial institutions.
In addition to the benefits that the merger will bring, I’m particularly excited about Capital One’s Community Benefits Plan (CBP) which will be set in motion should regulators approve the merger. The plan includes bold and targeted investments that will help small businesses in New York and across the country.
I’m thrilled that the CBP dedicates $600 million to Community Development Financial Institutions (CDFIs). Minority entrepreneurs often rely on CDFIs to access small business loans and other important financial services because they are often overlooked by traditional financial institutions. This infusion of capital will empower CDFIs to better serve their communities, allowing more people to launch businesses, create jobs, and chase their dreams.
In addition to investing in CDFIs, the CBP includes a commitment to spend $5 billion with diverse suppliers and a $15 billion earmark specifically dedicated to improve credit access for small businesses, including those in LMI communities.
The Capital One-Discover merger and the CBP plan are the kinds of targeted, bold, and ambitious solutions that our communities need from the private sector. I urge regulators to examine the positive impact that this merger and CBP will have on our communities as they review this merger.
J.P. Taylor is the co-founder of I Will Graduate, a youth development program in Brooklyn
