Promontory MortgagePath adds first CDFIs for minority partnership plan

Promontory MortgagePath, a provider of mortgage fulfillment services, announced the first two participants in a partnership program with minority-owned banks and credit unions looking to expand homeownership opportunities in the communities they serve.

Homeownership is commonly touted as a way to help close the wealth gap between minorities and Whites. A recent Zillow study found that the typical Black household has only 23% of the wealth held by a typical White household, and low levels of homeownership made up 49% of that gap.

Industrial Bank, a community development financial institution based in Washington D.C., was onboarded and started offering mortgages through the Promontory MortgagePath platform in April. The bank also has branches in New Jersey and New York.

The other participant, Columbia, South Carolina-based Optus Bank, which has both minority depository institution and CDFI designations, is in the implementation process.

"We strive to build wealth for all customers, with a special focus on those impacted by the 400-year legacy of exploitation and racism," said Optus Bank President and CEO Dominik Mjartan in the press release. "Together with Promontory MortgagePath, our goal to create $100 million in Black wealth over the next 10 years is more attainable."

Promontory MortgagePath introduced the program last October. At that time, the Danbury, Conn.-based company noted there were more than 1,100 certified CDFIs that managed approximately $222 billion in assets. Plus, of the more than 5,400 federally insured financial institutions in the country, 149 are minority depository institutions.

"These community-focused financial institutions are the lifeblood of wealth-building opportunities for the customers they serve," said Gene Ludwig, the CEO of Promontory MortgagePath and a former Comptroller of the Currency in the Clinton Administration in the latest announcement. "CDFIs and MDIs are a critical component to addressing big societal issues — from unemployment to wage stagnation — facing so many communities. These problems are more acute for Americans of color."

The program offers institutions exclusive pricing, resources and joint marketing activities in an effort to lower the barriers for them to participate in mortgage lending and do so profitably, the company said.