JPMorgan Chase said on Thursday that it is pledging $30 billion to help address the U.S. racial wealth gap, the latest such initiative unveiled by a major bank since the death of George Floyd, a Black American, at the hands of Minneapolis police in May.
The bank’s commitment, which is meant to assist Black and Latino communities and is scheduled to be implemented over a five-year period, will cover housing, small-business support and financial products.
JPMorgan Chairman and CEO Jamie Dimon said that the initiative is meant to help respond to the economic inequality linked to racism.
“Systemic racism is a tragic part of America’s history,” he said in a statement. “We can do more and do better to break down systems that have propagated racism and widespread economic inequality, especially for Black and Latinx people. It’s long past time that society addresses racial inequities in a more tangible, meaningful way.”
For the initiative’s housing component, the bank said that it will commit $8 billion to mortgages and originate 40,000 home purchase loans, commit $4 billion toward refinancing to help 20,000 Black and Latino homeowners reduce their mortgage payments and give $14 billion in loans to help pay for 100,000 new affordable rental units.
JPMorgan said that the initiative’s business-support component includes lending $2 billion to provide 15,000 small-business loans in communities with Black and Latino majority populations, offering a new program “to help entrepreneurs in historically underserved areas access coaching, technical assistance and capital," committing $750 million to Black and Latino suppliers and hastening the offering of “a digital lending product to better support the needs of small Black- and Latinx-owned businesses seeking quick access to capital.”
For the program’s personal-finance component, JPMorgan said that it plans to help 1 million people open savings or checking accounts that will be low-cost, adding that this will be achieved by opening branches in underserved areas and by hiring 150 community managers, as well as “materially increasing marketing spend to reach more customers who are currently underserved, unbanked or underbanked.”
The bank also said that it will provide an investment of as much as $50 million in Community Development Financial Institutions and Minority Depository Institutions, which it said will be done through a mix of deposits and capital.
Additionally, JPMorgan said that it will donate $2 billion, which it said will be “in philanthropic capital over the next five years to drive an inclusive economic recovery and support Black, Latinx and other underserved communities.”
The bank also reiterated support for improving diversity in its staffing and in an ongoing initiative to add 100 branches “in low-to-moderate income communities across the country as part of the firm’s market expansion initiative.”
The firm has its own history connected to alleged discrimination. In 2017, it agreed to a $53 million settlement with the federal government in a lawsuit claiming that mortgage brokers discriminated against minority borrowers. The bank said that the allegations involved behavior by independent brokers and did not admit to wrongdoing itself, according to media reports from shortly before the deal was announced.
JPMorgan’s vow comes days after Bank of America disclosed that it has invested in four community-development and minority-owned banks in connection with a $1 billion initiative to address racial and economic inequalities, which it said were exacerbated by the COVID-19 pandemic. The news followed a trio of investments that Bank of America disclosed last month as part of the same initiative.
-- Additional reporting by Patrick Hoff and Allie Ciaramella