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The bank said it had committed $647.2 billion to sustainable financing since 2020, with CEO Jane Fraser noting its clients see resilience as a “competitive necessity.”

Dive Brief:

• Citi has committed $647.2 billion to sustainable finance since 2020, including $91.3 billion in commitments in 2025, the bank reported in a sustainability report Tuesday.
• The bank reached 75% of the operational sustainability goals it had set for 2025, according to the report. Additionally, the bank set a pair of new 2030 goals to reduce its energy consumption and operational emissions, based on a 2025 baseline.
• “Clients tell us that amidst the new global dynamics, building resilience into their business models is no longer a defensive tactic; it is a competitive necessity,” Citi CEO Jane Fraser said in the report’s foreword.

Dive Insight:

Citi has end-of-decade goals to reach net-zero emissions across its scope 1 and scope 2 emissions portfolio, in addition to a $1 trillion sustainable finance goal. The sustainable finance goal is designed “to support the transition to a sustainable, low-carbon economy that takes into consideration society’s environmental, social and economic needs,” and the bank is meeting it through a combination of environmental- and social-focused financing. The bank also has a 2050 goal to reach net-zero financed emissions.

Citi estimated in the report that its sustainable financing commitments have led to 8.8 million metric tons of avoided greenhouse gas emissions through investments in renewable energy, green affordable housing and energy efficiency and have supported more than 4.4 million jobs.

Citi said its 2025 sustainable financing results “reflect a challenging market.” Of the $91.3 billion committed in 2025, Citi said 62% of the funds ($56.6 billion) were invested internationally, with the remaining 38% committed to North American projects ($34.7 billion). 

Of the financing committed to Citi’s $1 trillion goal specifically, 56% — or $363.8 billion — has gone to international projects, and 44% — or $283.3 billion — has been invested in North American projects over the past six years.

With regards to its 2025 sustainability goals, Citi reported hitting six of eight targets related to its operational emissions, energy, water, waste and building footprints, measured against 2010 baselines. 

The bank reported reducing its location-based scope 1 and scope 2 emissions by 58%, compared to the baseline, surpassing a 45% reduction goal. Citi said it will now target a 15% reduction in its location-based emissions, measured against a 2025 baseline, according to the report.

Citi reported it generated a total of 370,030 metric tons of carbon dioxide equivalent of location-based scope 1 and scope 2 emissions last year, around 3.8% less than in 2024. The bank’s scope 1 emissions totaled 50,790 metric tons of CO2e and scope 2 emissions totaled 319,240 metric tons of CO2e. 

Citi also said it had surpassed a 2025 goal to reduce its energy consumption by 40% and achieved a 43% reduction in energy consumption, compared to a 2010 baseline. The bank said it will target reducing its energy consumption an additional 10% by 2030, compared to a 2025 baseline.

“As technology, energy systems and market conditions continue to evolve rapidly, we are evaluating pathways to achieve our new goals,” the bank noted in the report. 

The bank also reported achieving or surpassing 2025 targets of maintaining 100% renewable energy sourcing; reducing its total water consumption by 30%, reporting a 43% reduction compared to a 2010 baseline; halving its total waste, with a reported 68% reduction; and having 40% of its floor area have sustainable building certifications. On the latter goal, Citi reported that 64% of its floor area was LEED certified from the U.S. Green Building Council or WELL certified by the International Well Building Institute.

The bank fell just short of a goal of diverting half of its waste from landfills, reaching 49%, according to the report. However, Citi reported being well behind a target of having 25% of its water consumption come from reclaimed or reused water sources, reporting that 11% of its water came from such sources. The bank said both areas “remain a priority.”

“We were unable to achieve our 2025 water reclamation goal due primarily to limited on-site infrastructure, the complexity of retrofitting systems and the lack of reclaimed water sourced through local utilities,” the report said. “For our waste diversion goal, challenges included limited availability of data and lack of recycling infrastructure in many of the countries where we operate.”

Citi said in the report that it is also considering additional sustainability goals that it expects to “announce separately in future reporting.”

Citi also reported 50,790 metric tons CO2e in carbon credits for 2025, which did not count toward its operational emissions goals. The bank began purchasing such credits in 2022 and has a portfolio “of nature-based, energy efficiency and methane destruction credits in an amount equivalent to [Citi’s] scope 1 emissions,” according to the report.

The regulators – absent the Federal Reserve – would limit grants banks give to “activist” community groups. Friday’s proposal would also reduce the number of banks that must collect CRA-related data.

The pendulum to reframe the Community Reinvestment Act has swung again.

The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. proposed a rule Friday that would limit grants banks can give to community advocacy groups the agencies label “activist.”

The regulators said the proposal is intended to “increase the focus on lending and ensure that community development grants and donations reach the communities they are intended to benefit instead of being diverted to other activities or excessive operating costs.”

The proposal would require large banks to document that recipients of community development grants have overhead costs of 15% or less.

But the measure also reduces the number of banks that would need to comply with CRA data collection and reporting requirements.

The current rule exempts “small” banks – those with less than $412 million in assets – from community development requirements. Friday’s proposal would increase that asset threshold to $1 billion. It would also create an “intermediate” size category that would extend to banks with up to $10 billion in assets.

In a statement Friday, Jesse Van Tol, CEO of the National Community Reinvestment Coalition, an advocacy group, said the proposal “dramatically weakens banks’ obligations to invest in working-class communities and threatens to undermine” affordable housing measures put into law just two weeks ago.

“Bank capital drives the creation of affordable housing in this country, and they do it because of CRA,” Van Tol said. “Now hundreds of banks won’t have the obligation to do so, and hundreds more will have a weaker requirement, which will further deepen our housing crisis.” 

The CRA, initially passed in 1977, operates as an anti-redlining law that governs lending in low-income neighborhoods. But regulators under both the Trump and Biden administration have see-sawed in recent attempts to give the law its first facelift since 1995.

The FDIC and OCC’s efforts Friday to narrow the CRA evaluation’s focus on lending means exams of banks’ retail services will prioritize credit activity and exclude deposits.

Regulators will monitor banks that provide community development grants to ensure the funds are “directly used for a plan, project, or initiative with community development as a primary purpose,” the OCC and FDIC said in a summary of the proposal.

Regulatory officials said the list of activities that would count for CRA credit is still in development. They declined to say whether it would include projects that recognize climate change, such as solar panel installation or flood mitigation.

“Banks will face weaker exams, get credit for projects with little connection to low- and moderate-income communities and gain more control over where and how they are evaluated,” Van Tol said. “CRA is supposed to put a thumb on the scale for working-class people; now it lets hundreds of banks off the hook, and dramatically reduces the obligation for others.”

A third regulator with responsibility over CRA evaluations – the Federal Reserve – did not sign on to Friday’s proposal. That hasn’t stopped agencies in the recent past from attempting to push through a CRA revamp alone.

The OCC tried to do just that in 2020 but faced pushback – particularly from community advocates who labeled the update “awkward, disjointed and rushed.”

The Biden-era OCC rescinded the revamp in 2021, then regulators issued their own update – which saw objections from the Fed’s now-vice chair of supervision, Michelle Bowman. Several state banking organizations sued to stop the update in 2024. The OCC and FDIC dropped an appeal to that suit last month.

Buy now, pay later players, including Klarna and Affirm, are facing more competition as financial institutions begin offering installment payment options.

The debit card has become the latest battleground between banks and fintechs over installment lending.

As buy now, pay later players like Klarna Group and Affirm Holdings encroach further into banks’ traditional purviews – introducing new loan offerings and high-yield savings accounts – banks are responding to the competitive pressure with their own pay-later products.

Four of the five largest U.S. banks now offer installment lending plans on their credit card accounts. Last week, Bank of America introduced a new flexible-payment option for its credit accounts, letting cardholders replace interest payments on particular purchases for a fixed monthly fee for terms of three to 18 months.

Meanwhile, JPMorgan Chase, the largest U.S. bank, also has a “Pay in 4” plan for debit card purchases of $50 to $400, allowing card users to split a purchase amount into four payments. The bank introduced the debit option three years ago, and assesses a $5 fee for missed or late payments.

These bank installment plans have emerged as buy now, pay later lending has grown in the U.S. – especially among younger consumers – fueled by marketing efforts from the larger players including Affirm Holdings, Klarna Group and PayPal Holdings. 

“The very largest banks … to the extent that they have built BNPL so far, it has been a feature of their credit card offering,” Wayne Pommen, Affirm’s chief revenue officer, said in an interview last week. “This debit card-based offering is sort of new and unique, and we haven’t really seen that much anywhere. So, we’ll see how it plays out.”

About 54 million Americans used a BNPL product in 2023, with an average loan of $135, the Consumer Financial Protection Bureau said in a December 2025 report, based on data from a half dozen large BNPL providers. 

Such BNPL loan originations surged from about 20 million in 2019 to 336 million in 2023, according to the CFPB survey. The agency queried Affirm, Block-owned Afterpay, Klarna, PayPal, Sezzle and Zip. 

Since then, there’s no sign that consumer interest has dropped off, especially given recent U.S. inflation and affordability pressures.

Bank of America, the second-largest U.S. bank by consolidated assets, devised its flexible-payment option because customers were “looking for more structure on knowing what their monthly payment and terms would be,” Lora Monfared, BofA’s head of consumer credit card products, said Friday in an interview. BofA doesn’t have a similar pay-later plan for debit cards. 

Citi introduced a flexible payment option for its credit cards in 2019; the bank doesn’t have a similar product for debit cards, a spokesperson said Tuesday. 

Last year, U.S. Bank, debuted a credit card that lets holders split purchases into three equal payments over three months. The card allows holders to extend the repayment for a fee of 1.5% of the original purchase amount.

More than one third (37%) of U.S. adults – and half of those under 40 – used a BNPL product for a purchase within the past 90 days, market data and analytics firm JD Power reported in March from a survey of about 3,900 consumers. 

For banks, that survey came with another finding: BNPL users expressed higher satisfaction with the products from banks than those from traditional BNPL providers, JD Power said.

That presents traditional financial institutions “an enormous opportunity” in the pay-later market, Sean Gelles, JD Power’s senior director of banking and payments, said in a press release. “Customers are looking for BNPL solutions from the brands they already know and trust,” he said.  

Still, as banks beyond the behemoths explore pay-later financing, Affirm is reaching out to the industry with a new product aimed at helping smaller banks and credit unions add BNPL-style lending to debit cards using Affirm’s underlying technology.

Affirm’s new service, introduced last month at the company’s investor event, aims to drive new revenue for the company by merging Affirm’s pay-later solution into banks’ debit accounts, an area of consumer finance that has traditionally resisted lending. 

Affirm estimates that there are 130 million “debit first” consumers who eschew credit cards, with the potential for $2,000 more in annual spending among this group. Overall, Affirm estimates $140 billion in annual spending among U.S. debit card users.

“There’s an enormous opportunity to partner with those banks and bring them that functionality and allow them to capture BNPL spending in their own ecosystem,” Pommen said June 11.

Most of Affirm’s discussions to date have been with mid-sized and smaller banks, Pommen said. The new tech offering arose as part of flexible-financing partnerships Affirm inked with Fiserv and separately with Fidelity National Information Services over the past 16 months to integrate BNPL offerings into banks’ debit accounts. 

Affirm declined to provide details about the timing of the launch of the new service for banks or how many banks have signed on to integrate the debit product. The only bank Affirm has thus far disclosed as a customer – Old National, an Evansville, Indiana-based regional bank – declined to discuss pay-later debit card plans.

As part of its pitch to potential financial institution customers, Affirm says there’s no credit risk with the new service and “minimal” integration work required. 

“We can give them an offering that allows them to get the capability to serve the customer’s need, to participate in the economics, without having to do really barely any technical lift,” Pommen said. “That is music to their ears, and that general value proposition has been resonating.”

Other banks are certainly watching pay-later growth among consumers, said Josh Miller, who oversees product development and consumer acquisition for KeyBank, a large regional bank based in Cleveland.

A BNPL product isn’t an immediate priority for KeyBank but “we’re constantly scanning the market landscape and prioritizing accordingly,” Miller said in an April interview. “If we saw all of the herd all of a sudden launch a BNPL product that would certainly influence a potential change in our prioritization.”

The central bank has begun collecting data from banks to get a better idea of how their funding is being used in private credit, Michelle Bowman, the Fed’s vice chair for supervision, told lawmakers.

The Federal Reserve has launched a new data-collection effort intended to provide more transparency on banks’ lending to the private credit sector, the central bank’s vice chair for supervision, Michelle Bowman, said Thursday.

Bowman, who was among several regulators to testify Thursday to the House Financial Services Committee, noted the data collection as some lawmakers expressed concern over a lack of information on banks’ exposure to the private credit market. 

Rep. Ritchie Torres, D-NY, asked Bowman whether an April letter the Fed sent to U.S. banks inquiring about their financial exposure to private credit was “an admission that the Federal Reserve has insufficient visibility” into the full extent of the issue.

And Rep. Juan Vargas, D-CA, expressed concerns about the interconnectedness between private credit and the rest of the financial system, and the “gap in data” that surrounds it.

Bowman said “a number of opacities” exist between bank involvement and where funding ends up in the nonbank space.

“This is an important issue that we’ve been looking very deeply into and trying to work with our regulated financial institutions to get a better sense of what the bank investment is into the private credit space,” she said. “Since it’s quite opaque, it’s difficult to know.” 

The Fed introduced the data-collection effort last month “to understand exactly where those investments are going outside of the banking system,” Bowman said.

That should afford more transparency and specificity on how bank funding is being used in the private credit space, she said, adding it hopefully will “provide us with a much better view on where the vulnerabilities might lie.”

“We have seen a rise in the investment from banks into NBFIs in particular, but it’s been very difficult for us to have a clear understanding of where those funds have been flowing,” she said.

Moody’s has estimated U.S. banks’ private credit exposure is about $300 billion, as part of more than $1.2 trillion in loans extended to non-depository financial institutions broadly. The private credit market is about $2 trillion globally, the Financial Stability Board said last month.  

When Vargas pressed Bowman on whether private credit poses a problem, given the mushrooming size of that market, she said it’s still a “very small proportion of the lending categories within the banking system.”

“But it is something that we need to know more about because it’s very opaque, which is exactly why we’re asking for more information from our regulated institutions,” she added.   

Bowman referenced “bankruptcies and challenges last fall with several private credit funds,” due to poor collateral management, fraud or lack of clear disclosures. 

Regulators restricted First Guaranty Bank’s ability to extend credit to borrowers whose transactions were labeled a “loss” in a 2025 exam. The bank also must boost its Tier 1 leverage capital ratio.

Hammond, Louisiana-based First Guaranty Bank has agreed to operate under a consent order concerning the credit quality of its borrowers, the lender said Friday in a filing with the Securities and Exchange Commission.

The Federal Deposit Insurance Corp. and Louisiana Office of Financial Institutions are restricting the $3.9 billion-asset bank from extending additional credit to borrowers whose credit remains uncollected and was charged off or classified as a “loss” during a September 2025 exam by regulators.

The regulators are also restricting First Guaranty from extending additional credit to borrowers whose credit remains uncollected and was classified as “doubtful” or “substandard” during the exam, unless the bank’s board signs a written statement detailing reasons why failure to extend credit would be detrimental.

Under the order, which took effect Friday, First Guaranty must maintain a Tier 1 leverage capital ratio of 9% or more and a total risk-based capital ratio of at least 14%.

Within 120 days, the bank must eliminate from its books – by charge-off or collection – assets or portions of assets classified during the September 2025 exam as a “loss” and 50% of assets labeled “doubtful.”

Ahead of that, though – within 60 days – First Guaranty must submit a written plan to regulators detailing how it will reduce remaining assets classified as “doubtful” and “substandard,” including specific information for each asset with a balance of $2 million or more, according to Friday’s order.

In the intermediate term – within 90 days – First Guaranty’s board must submit to regulators a written plan identifying, measuring and monitoring the bank’s commercial real estate concentration.

Also within 90 days, the board must implement measures to correct weaknesses found in CRE stress testing, as well as measures to correct certain loan underwriting and credit administration weaknesses identified in the September 2025 exam.

The bank is restricted from paying any dividend to its holding company while under the order without the regulators’ prior written consent. First Guaranty must also submit quarterly progress reports to the FDIC and OFI.

First Guaranty, in Friday’s filing, said it has submitted a capital plan to the regulators and, apart from the Tier 1 leverage ratio requirement, “the Bank currently believes that it is in full compliance with the Consent Order.”

The bank noted its Tier 1 leverage capital ratio was 7.09% as of June 30, and itstotal risk-based capital ratio was 16.21%.

Among the moves that could boost First Guaranty’s Tier 1 figures, the bank announced Thursday it had completed the sale of five branches to Muskogee, Oklahoma-based Armstrong Bank. When the sale was proposed in March, First Guaranty estimated the transaction would boost Tier 1 leverage capital by about 100 basis points.

First Guaranty’s real estate-related nonperforming assets decreased to $38.3 million as of June 30, from $88.6 million, according to second-quarter results disclosed July 28.

The bank reported no doubtful loan relationships as of June 30 but cited $276.6 million in substandard loan relationships, according to the earnings report.

Overall, the bank reported $3.4 million in profit in the second quarter, a turnaround from a $7.3 million loss a year earlier.

The bank issued a report last month on progress related to the $265 billion it had committed to invest as part of its bid to buy Discover Financial Services.

Nearly two years after Capital One unveiled a $265 billion community investment plan as part of its bid to acquire Discover Financial Services, a report indicates the bank is making progress toward its philanthropic goals; however, its non-profit partners have largely remained silent regarding the bank’s progress.

Capital One Financial released its first interim progress report last month, detailing the strides made during the second half of last year. While the report highlights the bank’s achievements in lending, philanthropic activities, and support for small businesses, its community benefit plan partners have either remained quiet about the results or voiced concerns that the bank has fallen short of expectations.

Capital One announced the community benefit plan in 2024 as part of its effort to acquire Discover—a deal it had initiated about a year prior. At the time, the bank collaborated with four organizations to help shape the plan: the Chicago-based Woodstock Institute, and the Washington, D.C.-based National Association for Latino Community Asset Builders, Opportunity Finance Network, and NeighborWorks.

The report, released in June by the McLean, Virginia-based bank, provided updates on the $43 billion distributed under community investment commitments spanning six different areas.

Capital One disclosed that it had deployed $34.7 billion of its $200 billion commitment toward consumer credit card and auto lending. The report also highlighted a partnership established with Hope Credit Union to launch a program aimed at assisting borrowers who do not meet standard criteria for auto loans. The bank also stated that it had allocated $5 billion of the $44 billion fund earmarked for community development loans and investments. Among the recipients was Xiente, a Philadelphia-based non-profit organization; it secured $7.8 million in tax credit financing to build a community center expected to serve an additional 2,700 people.

Capital One further reported that it had deployed $2.5 billion of the $15 billion in loans pledged to small businesses located in low- and moderate-income areas.

The bank announced that it had allocated $858 million—part of a $5 billion spending commitment aimed at working with smaller suppliers—to help these businesses grow and become more sustainable. According to the report, the company also donated $94 million to philanthropic initiatives spanning affordable housing, credit-building, small business support, responsible AI, education, and other areas. The progress report indicates that the bank aims to distribute a total of $575 million across various philanthropic causes.

A company spokesperson declined to answer detailed questions regarding how capital was distributed under the supplier development and small business initiatives.

Finally, the report noted that the bank had allocated $3 million toward its $500 million goal of providing loans to financial institutions that support community development.

Financial institutions have been investing heavily in digital transformation for the past decade. New channels, technologies, and customer interaction tools have created more ways than ever to connect with customers.

However, many banks and credit unions face a common challenge: despite having access to more customer data than ever before, translating that information into meaningful action remains difficult.

At Marquis, we work with over 700 financial institutions nationwide, helping them better understand customer behavior, strengthen relationships, and drive growth. Through our customer data, analytics, and engagement solutions, we see firsthand how financial institutions navigate rising customer expectations, increasing competition, and rapid technological change.

One trend is becoming increasingly clear: the future of banking growth will be defined not by who can launch the most campaigns, send the most emails, or collect the most data, but by which institutions can make faster and better decisions.

This is precisely where much of the current conversation about artificial intelligence misses the mark.

The greatest opportunity offered by AI is not content generation or automation, but decision-making intelligence.

At its best, AI helps organizations identify patterns, recognize behavioral signals, anticipate customer needs, and determine the “next best action” before opportunities are lost. Rather than replacing human expertise, it enhances it.

For banks and credit unions, this distinction is crucial.

The most successful financial institutions have always differentiated themselves through relationships, trust, and service. Technology should not replace these strengths; it should help scale them.

Today’s customers expect more than just responsive service; they expect relevance. They expect financial institutions to understand their situations, anticipate their needs, and provide meaningful guidance at the right moment.

Meeting these expectations requires going beyond traditional marketing approaches.

For decades, financial marketers have relied heavily on demographic segmentation. While age, income, household composition, and geography remain important inputs, they increasingly tell only part of the story.

Behavioral signals often provide a much clearer view of customer intent.

Transaction activity, digital interaction patterns, channel preferences, service interactions, and shifts in financial behavior can reveal customer needs long before they are explicitly stated.

Imagine being able to detect signs of financial distress before a customer asks for help. Imagine recognizing life-stage changes and proactively offering relevant financial guidance. Imagine understanding which customers are considering refinancing, opening a new account, or expanding their relationship with your institution before they start shopping elsewhere.

This is not merely personalization; it is customer insight at scale.

The institutions that succeed in the coming decade will not be those with the largest technology budgets, but those that can most effectively turn intelligence into action.

As the adoption of artificial intelligence accelerates, success will depend on more than just technology. Trust, governance, transparency, and human oversight will remain fundamental. Customers desire relevant experiences, yet they also expect their information to be managed responsibly.

For banks and credit unions, the opportunity lies not in becoming more like technology companies, but in leveraging technology to excel at what has always driven their success: building trusted relationships.

The future of banking growth lies not in increased automation, but in the ability to make better decisions.