Nearly all of Massachusetts’ congressional delegation is calling on the new owner of Silicon Valley Bank to continue financing affordable housing projects here, a legacy that the California-based lender maintained before it collapsed last month.
In a letter sent Thursday to Frank Holding Jr., the CEO of First Citizens Bank, the elected officials asked that the North Carolina-based lender reaffirm its commitment to the construction projects, mortgage programs, and other affordable housing initiatives that SVB agreed to fund prior to its March meltdown. The letter was authored by Representatives Stephen Lynch and Ayanna Pressley, who both represent Boston, and signed by Senators Elizabeth Warren and Ed Markey as well as six of the state’s seven other members of Congress (Representative Richard E. Neal did not sign it.)
SVB, which catered largely to wealthy clients in industries such as technology and life sciences, took on an outsized role in Boston-area affordable housing by way of its $900 million acquisition of Boston Private Bank & Trust in 2021. SVB continued that bank’s work with nonprofits, community development organizations, and government agencies to finance affordable housing construction and mortgage programs for low-income homebuyers.
After a bank run rendered SVB insolvent, the Federal Deposit Insurance Corp. took it over, allowing depositors to continue paying their bills as the agency looked for a buyer. But now that First Citizens has absorbed SVB, Massachusetts lawmakers want to ensure the state’s affordable housing projects will remain viable.
“In the middle of a worsening affordable housing crisis, it is critical that there is a continuation of these activities under new ownership to avoid the disruption of local affordable housing development pipelines and initiatives,” the letter said.
First Citizens bank responded to the letter Thursday, with a spokesperson confirming that conversations are underway with leaders in Boston but noting that specific plans are still in the works.
“Since the March 27 acquisition of Silicon Valley Bank, we’ve already talked with key Boston community leaders,” wrote Barbara Thompson, a senior vice president at First Citizens, in an e-mailed statement. “Other discussions with more groups and government officials are scheduled for the days ahead. We want to take an informed and thoughtful approach to doing what’s right to strengthen the Greater Boston area.”
There are currently “at least” 18 affordable housing developments under construction across the state that had been financed by SVB — representing over 800 homes for low-income residents, the letter said. The politicians singled out a 65-unit apartment building going up in Jackson Square at 1599 Columbus Ave. that was funded in part by a $24 million construction loan from SVB and Eastern Bank, as well as SVB’s investment in low-income housing tax credits.
But construction projects aren’t the only thing on the line. In 2021, the parent company of SVB committed $1.3 billion in residential mortgages for low- and moderate-income communities in Massachusetts and California through 2026 — an agreement that included expanding SVB’s participation in first-time home buyer programs in the state and Boston. Now that commitment, too, hangs in the balance.
Specifically, the politicians requested that First Citizens continue the payment schedule for construction loans for the 13 state-supported affordable housing developments that SVB committed to, as well as following through on all other loan, equity, and bond obligations related to affordable housing projects. They also asked that First Citizens preserve mortgage agreements made by SVB, “and continue to offer SVB loan products for low- and moderate-income first-time home buyers in Massachusetts.”
“Through the continuation of these commitments, First Citizens Bank can serve a vital role in our shared efforts to advance the quality of life, economic growth, and revitalization of our most underserved communities,” the letter said.