2019 Corporate Responsibility Report

Economic Development

Affordable housing continues to be one of the most critical needs of families around the country. In Delaware, the home of our retail bank and where we focus our local efforts to address housing needs, people would need to work an average 100 hours per week at minimum wage to afford a two-bedroom rental home at fair market value.1 Solving the affordable housing crisis is a crucial step to promoting brighter futures.

Discover has taken on the challenge of creating and preserving affordable housing opportunities and continually focuses our efforts on both homeownership and rental opportunities.

What Is the Low-Income
Housing Tax Credit?

The Low-Income Housing Tax Credit (LIHTC) is a federal program that issues tax credits to state governments, which then award the credits to private developers through a competitive process, for construction or rehabilitation of affordable rental housing projects for low-income households. Developers generally sell the credits to private investors to obtain funding. Once the housing project is made available to tenants, investors can claim the LIHTC over a 10-year period.

We take a two-pronged approach to promoting affordable homeownership, working at a national and local level. Nationally, Discover participates in the National Community Reinvestment Coalition’s (NCRC) Affordable Homeownership Coalition, which convenes multiple stakeholders to solve the problem of homeownership among low-income communities. In 2018-19, we provided a $275,000 grant to NCRC.

Locally, Discover has partnered with the Delaware State Housing Authority (DSHA) since 2004 to offer products and services that help low- to moderate-income homebuyers in the state advance up the property ladder. These options include:

  • Access to down payment and settlement cost assistance.
  • Financial coaching—a program called $tand by Me—to help people qualify for a mortgage. Coaches help homebuyers who aren’t immediately approved for a mortgage to improve their credit and become mortgage ready. We support this service through a $75,000 annual grant to DSHA.
  • Low fixed-rate mortgages.
  • Reduced interest rates for recent college graduates—called Home for Grads, new in 2018-19.

In 2018-19, our partnership with DHSA helped generate over $150 million in mortgages for low- and moderate-income Delaware homebuyers.

Rental Housing

Discover’s approach to affordable rental housing focuses on both preservation and the creation of new units. In 2018-19, Discover approved a $7.8 million low-interest loan for Milford Housing Development Corporation (MHDC), helping the nonprofit to acquire and preserve 400 units of affordable rental housing in the resort area of Sussex County, Delaware.2 Sussex County’s Comprehensive Plan, which was approved in 2018, states that the county’s housing market is the fastest-growing and most expensive in Delaware. In addition to the low-interest loan, we provide annual grants to MHDC that totaled $275,000 in 2018 and $300,000 in 2019.

$7.8M
low-interest loan for Milford Housing Development Corporation.

In 2018-19, Discover purchased Low-Income Housing Tax Credits (LIHTCs) to support the development of the Pearl Center, a new 52-unit multifamily affordable housing development for homeless veterans in Wilmington. When called upon, we were able to provide additional funding to the project to allow the Pearl Center’s management organization, the Delaware Center for Homeless Veterans, to install a commercial kitchen to serve Pearl Center residents, as well as residents of nearby shelters and transitional units. In addition to the financial support, Discover provided care packages for all new residents of the property.

Discover Bank also developed other unique and creative programs to support its local community. Two examples are our small business loan fund and our support of a low-income community credit union.

ExciteSussex (Grow America Fund)

We increased our commitment to fund up to $15 million in small business loans throughout Delaware with the National Development Council.

GROW WILMINGTON

Launch Year:
2014
Number of Loans:
8
Value of Loans:
$4.2 M
Jobs Created/Retained:
78

GROW DELAWARE

Launch Year:
2017
Number of
Loans:
4
Value of Loans:
$4.4 M
Jobs Created/
Retained:
162

EXCITE SUSSEX

Launch Year:
2018
Number of Loans:
1
Value of Loans:
$985 K
Jobs Created/Retained:
10

In addition to these
loans, we have provided:

$250,000
Grow America Fund of the
National Development Council
$75,000
National Development Council
$120,000
West End Neighborhood House

Bank on Wheels

Discover took a leadership role in developing the Bank on Wheels program, which is an innovative way to provide financial services to low- and moderate-income people in Wilmington. Bank on Wheels provides access to financial education and savings accounts (known as share accounts at credit unions) using a mobile van operated by the designated low-income Stepping Stones Community Federal Credit Union.

The share accounts were developed to provide a means for anyone who wants to open an account with a federally insured financial institution. The product accepts direct deposits and provides customers access to the largest ATM network in Wilmington at no cost. This access eliminates the need for high-cost check cashers and pre-paid debit cards, helping people join the financial mainstream. In 2018-19, Bank on Wheels opened nearly 90 new accounts.

Bank on Wheels is staffed by volunteers and employees of the Delaware Community Reinvestment Action Council (DCRAC). Discover granted the DCRAC $30,000 in 2018 and $70,000 in 2019 to service Bank on Wheels.

In 2018-19, we won the Consumer Bankers Association’s Joe Belew Award for Community Development for our Bank on Wheels partnership with the Stepping Stones Community Federal Credit Union.

Other Delaware Community Investments

In 2018-19, Discover also made the following investments into local Delaware projects that provided economic development opportunities:

  • $6.5 million in Delaware State Historic Tax Credits to support the renovation of the historic Dupont Building in Wilmington, which serves as an important community anchor. The building houses a hotel, food hall, eight restaurants, and a global chemical firm employing 850 people. We made this investment after the consolidation of one of the region’s largest employers in an effort to preserve a legacy real estate holding.
  • $3 million investment and $225,000 operating grant to the National Development Council’s Community Impact Loan Fund (certified as a Community Development Financial Institution) in support of the Delaware Innovation Space (DIS). The funds will help the DIS fulfill its mission of transforming science-driven startups into industry-leading companies that are focused on creating products and technologies that will enhance and expand everyday living. The DIS is located on the campus of the DuPont Experimental Station and provides support for scientists and support professionals to become entrepreneurs using their intellectual property.
  • $100,000 to Delaware.Money, which was launched in partnership with the Delaware Council on Economic Education to aggregate financial education resources available to local residents.

Additionally, we are working with the National Development Council (NDC) to facilitate a $3 million loan to a Delaware Technology Park, which is home to the fintech incubator program on the STAR Campus at the University of Delaware.

First State Community Action Agency

Over the past three years, Discover has donated $330,000 to the First State Community Action Agency to support afterschool and summer educational and enrichment programs to children living in low- and moderate-income communities in Delaware.

Leon N. Weiner Education Foundation

In 2018-19, we donated $300,000 to the Leon N. Weiner Education Foundation to offer year-round academic and enrichment programs to children at 15 affordable housing sites throughout Delaware.

Visit Philanthropy to read about additional community investments in Delaware and around the country.

  1. “Out Of Reach: National Low Income Housing Coalition, 2019.
  2. “2018 Comprehensive Plan,” Sussex County Delaware, 2018.