Nearly two years after Capital One offered a $265 billion community investment plan as part of its acquisition of Discover, a report suggests it has made progress toward its philanthropic goals, but its nonprofit partners have largely kept quiet about the bank’s advancement. 

Capital One released a first interim progress report last month, detailing the headway it made in the second half of last year. In the report, the bank touted its lending, charitable giving and small-business efforts, but its community benefits plan partners have either remained mum on results or raised concerns that the bank is falling short. 

In 2024, Capital One unveiled its community benefits plan as part of its intent to acquire Discover, a deal it closed about a year ago. At that time, the bank enlisted four organizations to help shape its plan: the Chicago-based Woodstock Institute and the Washington, D.C.-based partners National Association for Latino Community Asset Builders, the Opportunity Finance Network and NeighborWorks. 

The June report from the McLean, Virginia-based bank provided an update on what it stated was $43 billion in distributions across six areas of community investment commitments. 

Capital One said it has invested $34.7 billion of its $200 billion commitment in consumer card and auto lending. The report highlighted its partnership with Hope Credit Union to launch a program that helps borrowers who don’t qualify for auto loans. 

The bank also said it has allocated $5 billion of its $44 billion in community development lending and investments. A Philadelphia-based nonprofit, Xiente, was among the recipients of its lending. The charity received $7.8 million in tax credit financing to build a community center that it said will serve an additional 2,700 people. 

Capital One also said it has distributed $2.5 billion of the $15 billion in lending it committed for small businesses in areas considered to be low- or moderate-income. 

The bank also said it has allocated $858 million of the $5 billion it promised to spend with smaller suppliers to help those businesses grow and become more sustainable.

The company also donated $94 million toward philanthropic causes in areas such as affordable housing, credit building, small business, responsible artificial intelligence, education and other causes, according to the report. Overall, the bank aims to distribute $575 million across various philanthropic causes, per the progress report.

A spokesperson for the company declined to answer follow-up questions regarding how it distributed capital toward its supplier development and small business targets. 

The bank also directed $3 million toward its $500 million goal for community development financial institution lending, according to the report. 

Along those lines, Capital One expanded its credit program nationally last year with Ascendus, a New York-based nonprofit CDFI, to offer $500 microloans to business owners with credit scores under 575.

Bank’s update falls flat for one partner

When asked during a June interview whether Capital One’s CBP progress report contained any remarkable developments compared to other banks who’ve undergone a similar process, Woodstock Institute President Horacio Méndez replied, “Well, not really.” 

“It’s not like there's anything I would say that this is parade-worthy, like, ‘Oh my God, you guys are setting a new standard,’” Méndez said. “For the most part, from a metrics perspective, they're kind of doing what they promise to do.”

After reviewing Capital One’s update, Méndez gave the bank a spreadsheet detailing the data he sought, which would clearly explain how the company’s spending falls into the plan’s categories. 

“We needed that context, because if we’re giving you flexibility to do all of this work with a quarter of a trillion dollars over five years, you’ve got to show me that it's based upon what people are telling you they need, market by market, and it's making it better,” Méndez said. “This document doesn't do that, other than make me feel warm and fuzzy like a 30-second commercial on TV. I need more data to know. Like, how do I know you're doing the things that are truly needed and it's making a difference?”

The bank also has portioned some of its philanthropic and community lending dollars toward another one of its CBP partners: the Opportunity Finance Network, providing $45 million in loans and nonprofit donations to the network, according to Capital One’s head of community finance, Desiree Francis. A portion of the $15 million philanthropic funding will go toward the network, and the remaining funds will be given to its members, Francis said. 

“The total $45 million will be deployed to support affordable housing and small business activities as well as innovation programs that the network has spearheaded as part of their strategic plan,” Francis said in an interview in April. 

Still, the network didn’t respond to repeated requests to comment on the bank’s progress report.

Tailoring lending for small businesses

Regarding the bank’s $2.5 billion in small-business lending, it’s unclear whether that figure also includes credit cards, Méndez said. That distinction is crucial, because credit cards are more flexible for small-business owners than traditional business loans, but they carry higher interest rates, Méndez noted.

In a statement, a Capital One spokesperson said the $2.5 billion figure includes “a comprehensive mix of small business financing options,” such as business credit cards, small-business term loans, lines of credit and trade credit. 

“I just want to make sure that they’re offering their small-business clients a variety of different products and then giving them enough counsel to try to figure out what the capital stack looks like that's going to be best for that small business,” Méndez said.

The Woodstock Institute has discussed with Capital One whether the company is transitioning eligible customers from more expensive credit cards to cheaper credit card options, Méndez said. While it’s better for customers to graduate from expensive credit cards to more affordable options, it’s not exactly beneficial for Capital One’s bottom line, he said.

Apprenticeship program roll-back in Chicago

In its original community benefits plan, Capital One said it planned to support Discover’s Customer Care and Community Center in Chicago’s Chatham neighborhood, including “keeping the original goal of employing more than 1,000 individuals at that location.”

In early June, the company informed Méndez that it planned to cut 19 staffers for Discover’s tech hub apprentice program at Discover’s customer care center, citing poor outcomes for the program over the past few years, he said. However, the bank would not lay off any employees working at the Chatham call center, Méndez said.

Méndez expressed disappointment in Capital One’s decision to disband the apprenticeship program. “I pushed back on them a little bit after I had some time to think about what they had done,” Méndez said. 

A Capital One spokesperson declined to comment on the Discover tech hub layoffs, and the current status of the Chatham center generally.

“As noted in our Community Benefits Plan (CBP), Capital One is committed to investing in the Chicagoland area, the Chatham neighborhood, and the Chatham Customer Care and Shine Bright Community Centers,” the spokesperson said. 

The interim CBP report makes no mention of the Chatham Customer Care and Shine Bright Community Centers. (The community center is a gathering space located within the customer care building, according to the center’s website.) 

Furthermore, Méndez also raised concerns about whether the bank had sufficient senior staffers to meet its goals in each market.

Capital One’s principal associate for community impact and investment in Chicago and on the West Coast is tasked with overseeing multiple markets, which could leave her “stretched thin,” Méndez said. In response to this concern, the bank agreed to search for another person to oversee these markets, which Méndez felt was a sign that they were listening to him, he said. 

To Capital One: ‘You could do better’

Despite the Woodstock Institute’s critique of Capital One’s progress, Méndez noted the bank is making progress on the community benefits plan, but it could be making more, he said. He expressed those criticisms to the company directly in an email. 

“I'm going to give them credit where it's due,” Méndez said. “But at the same time, I want to be in a position and at the table to be able to say, ‘You're not living up to this,’ or ‘You could do better.’”

The National Association for Latino Community Asset Builders did not respond to follow-up questions regarding Capital One’s progress on the community reinvestment pledges. 

In an emailed statement, a NeighborWorks spokesperson said, “We appreciate the investments that are strengthening communities, particularly those that expand access to safe, stable and affordable housing,” without providing investment details. The NeighborWorks spokesperson declined further comment on the bank’s progress.