New bank urged to keep SVB housing funds intact

Following the collapse of Silicon Valley Bank and its purchase by First Citizens Bank and Trust Company, members of Massachusetts’ congressional delegation are urging the bank’s new owners to keep intact SVB’s commitments to affordable housing in the state.

“It is clear that SVB had extensive investments and partnerships in the affordable housing sector that should be continued,” the reps and senators said in a letter sent Thursday. “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 is addressed to the CEO of First Citizens and is signed by Reps. Stephen Lynch, Ayanna Pressley, Bill Keating, Jim McGovern, Katherine Clark, Seth Moulton, Lori Trahan and Jake Auchincloss and Sens. Elizabeth Warren and Edward Markey.

It lays out SVB’s extensive reach in Massachusetts’s affordable housing sector after the acquisition of Boston Private Bank & Trust Company in 2021, including financing 18 affordable housing developments with over 800 units currently under construction which will be “largely dependent on the fulfillment of the outstanding lending and investment obligations made by SVB.”

Just one example, the letter details, is the 65-unit development at 1599 Columbus Avenue in Boston relying on a $24 million SVB construction loan and other investments.

There are other large scale investments, according to the letter, including a partnership with Massachusetts Housing Investment Corporation to invest $75 million initiative in expanding housing in Massachusetts, Connecticut and Rhode Island.

Of the $2 billion in loans and investments SVB reported over the last two decades, $1.6 billion were directed to the construction or modernization of affordable housing across the country, the delegation points out.

In a message following the SVB acquisition, First Citizens told SVB customers there no imminent changes to their accounts, but the bank did not speak definitively to larger scale investments or commitments.

The Massachusetts representatives lay out a list of priorities they’re “urging” the new ownership to consider, largely continuing preexisting commitments made by SVB.

“We hope that you will see the gravity of this request and maintain the financial commitments that help ensure that the future of affordable housing in Massachusetts remains safe,” the letter reads.

The Herald reached out to First Citizens for its response to the letter, but the bank did not respond immediately.