There’s a seemingly bottomless well of ideas and options being promulgated to mitigate income inequality and to expand economic opportunities for the most disadvantaged Americans. Bank of America is, well, banking on affordable healthcare as the best option. The Charlotte, North Carolina, giant, with assets of $3 trillion, recently announced it would allocate $40 million to CDFIs across the country through low-cost long-term capital to promote the development and expansion of primary healthcare facilities and centers to serve low-income Americans in medically underserved areas.

Bank of America is not alone among big banks giving increasing support to CDFIs to address economic inequality in various ways. In recent years, JP Morgan Chase, U.S. Bank, TD Bank, Wells Fargo and others have all announced large initiatives supporting CDFIs. To be sure, the banks are counting on good press coming out of the investments. And like with Bank of America’s latest $40 million contribution, the investments are minuscule compared to the banks’ massive assets.

Still, Bank of America’s use of CDFIs to spearhead its healthcare initiative is smart, as these organizations know their local communities — and how to address their needs — best. The commitment of $40 million is already showing tangible dividends, funding development of new primary care community centers in places like central Florida.

Furthermore, Bank of America has been in the CDFI game, as they say, for a while. It’s the largest private investor in CDFIs in the U.S., investing $2 billion through several means such as loans, deposits and direct investments. The bank has also invested more than $66 million since 2021 to address health-created issues in the community it serves.

Of the latest $40 million investment, $10 million is allocated toward encouraging others to enter the space of financing the development of primary care. Dan Letendre, head of CDFI lending and investing at Bank of America, was unable to clarify exactly how that $10 million would be spent, but said: “We are hopeful that our announcement will raise awareness of this critical need and result in inquiries and referrals from potential projects.”

He adds: “Because our terms on this commitment include long-term financing at a low, fixed rate, it is a scarce resource, even at a bank our size. Our CDFI partners see the value of this capital, most especially given the rising interest rate environment.”

A top CDFI partner in Bank of America’s healthcare initiative is Primary Care Development Corp., in New York. PCDC is one of the only CDFIs that focus on primary care, according to Louise Cohen, CEO of PCDC, and it has financed more than $1.4 billion in primary care projects through direct investment and leverage over 30 years.

PCDC is built around the idea that quality primary care is a cornerstone of healthy, thriving communities. And Ebony Thomas, Bank of America Charitable Foundation President, said in the bank’s press release announcing the $40 million capital allocation that “improved health and financial stability are integrally linked.”

Minorities have decreased access to preventative care, which can lead to the development of chronic conditions like diabetes, heart disease and cancer. In its announcement, Bank of America noted a report by a 2008 American Journal of Medicine report that an increase in just one primary care physician for every 10,000 people leads to 5.5% fewer hospital visits and 11% fewer emergency visits. It’s also associated with a 51.5-day increase in life expectancy.

More recent studies reflect similar trends. The Journal of American Medical Association study of primary physicians’ supply with population mortality from 2005 to 2015 found that 10 additional primary care physicians per 100,000 population was associated with reduced cardiovascular, cancer and respiratory mortality by 0.9% to 1.4%. Furthermore, the high cost of healthcare in general has pushed so many Americans into bankruptcy.

Cohen, of PCDC, puts the rationale for increasing access to primary care in more stark terms: “With no primary care, folks are more (likely) to die. … Health equality and racial equality are tied together. Communities with less access to primary care are sicker and poorer and they tend to be people of color.”

Cohen, who’s been CEO at PCDC since 2015, says a unique feature of Bank of America funding is its “very low interest rate,” though she declines to disclose the coupon.

In addition, Cohen points out that PCDC received $10 million in funding from Bank of America, which she views as a “down payment” that will allow her CDFI to “go back to BofA and other banks to match it.”

One of the first community centers to get funding is Premier Community Healthcare Group of Dade City, Florida. Premier has received $16.5 million from PCDC and $2 million from PNC Financial Services Group to finance the construction of two primary care community centers in Pasco and Hernando counties, in central Florida. One will be 23,000 square feet and the other 6,500 square feet. Premier Community has 13 facilities across two counties in Florida, serving 38,767 patients, more than 97% of which are at or below 200% of the federal poverty level. This data is based on those patients who report income to the CDFI. The new facilities will allow the organization to provide all its services under one roof. Services range from primary care to women’s health to behavioral health to pediatric care. They also provide dental care.

Premier CEO Joseph Resnick and Chief Financial Officer Aaron Brandt say the goal is to get to 50,000 patients served. They hope the two new centers, which they expect to come online toward the end of 2023, to facilitate that goal.

“Our mission is providing healthcare services to all,” Resnick says. “We don’t turn anyone away. We’re very unique in that regard.”

The work at Premier Community Healthcare is the type of project that makes Letendre “pleased thus far” with his bank’s initiative. He also acknowledges that this effort won’t provide an overnight solution to what some see as an intractable and systematic problem. But Letendre is “seeing progress” and suggests the bank might be open to bigger investments toward this primary and healthcare care initiative down the road.

“It’s also important to note that this is a pilot program for us, and we are approaching it as a learning opportunity,” he adds. “We plan to collect data and feedback and use it to modify our subsequent and potentially larger, capital deployment programs.”

This story is part of our series, CDFI Futures, which explores the community development finance industry through the lenses of equity, public policy and inclusive community development. The series is generously supported by Partners for the Common Good. Sign up for PCG’s CapNexus newsletter at capnexus.org.