JPMorgan Chase, one of the nation’s largest banks, has committed $30 billion over the next five years to narrow the racial divide when it comes to wealth. It says the spending will be targeted in underserved African American and Hispanic communities to help minority-owned businesses and increase jobs.
In announcing the project, the bank cited an existing racial wealth gap that it says has been made worse by the coronavirus (COVID-19) pandemic. Chase also says it will use its existing investments, along with its financial expertise, to provide support to minority-owned businesses that have been hard hit by the pandemic.
“Systemic racism is a tragic part of America’s history,” said Jamie Dimon, Chase’s chairman and CEO. “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.”
Improving housing options
Much of the money will be used to improve housing options for minorities. Over the next five years, Chase’s investments will include loans, equity, and direct funding to increase affordable housing in underserved communities. That could consist of an estimated 40,000 home purchases using $8 billion in mortgage funding from Chase.
The bank also plans to help 20,000 minority households lower their mortgage payments by allocating $4 billion in mortgage funds for refinancing at lower rates. During the 2008 financial crisis, minority homeowners were saddled with a disproportionate number of subprime mortgages that led to a wave of foreclosures.
Chase says renters will also benefit. The bank plans to finance 100,000 new affordable rental units, providing $14 billion in loans and equity investments in underserved communities.
Help for businesses
To support minority business development, Chase said it will provide an additional 15,000 loans to small businesses in underserved communities, allocating up to $2 billion. The program will provide assistance to minority entrepreneurs in the form of coaching, technical assistance, and funding.
To promote sound financial habits, Chase said it has set a goal of helping 1 million people open low-cost checking or savings accounts. To support that effort, Chase has committed to hiring 150 new community managers and opening new community center branches in underserved communities.
Marc Morial, president of the National Urban League, praised the bank’s initiative, saying it “will bolster the well-being of families across the country, as well as our collective economy.”