June 30, 2020

NYT: Hope Credit Union receives $10 million deposit as Netflix invests in black banks

Putting money where it matters is both good business and good for the economy.

Bill Bynum, CEO, Hope Credit Union

Netflix said on Tuesday that it would move up to $100 million, or 2 percent of its cash holdings, to financial institutions that focus on Black communities. It is intended to address a longstanding problem that these communities face: a lack of capital for the banks and other lenders that service them.

Earlier in June, the streaming company’s chief executive, Reed Hastings, pledged $120 million to support scholarships at historically Black colleges and universities. The move on Tuesday by the company he runs aims to fight racial inequality not through charity but via a routine commercial aspect of its business. As the company’s considerable cash pile grows, so might its deposits.

Netflix will start with $35 million, split two ways: $25 million in financing for a new fund, the Black Economic Development Initiative, that will itself invest in Black financial institutions, and $10 million deposited with the Hope Credit Union. These institutions join the roughly 30 banks worldwide that Netflix uses to hold its cash.

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