Jamie Dimon, CEO of JPMorgan Chase, speaks at the 2019 North America’s Building Trades Unions (NABTU) Legislative Conference in Washington, April 9, 2019.
Jeenah Moon | Reuters
JPMorgan Chase is making a $ 30 billion commitment that it says will help tackle wealth inequality in the United States, especially in traditionally disadvantaged Black and Latino communities.
Questions about racial inequality in the United States were triggered after George Floyd’s May 25 death at the hands of a police officer sparked weeks of protests across the country. The coronavirus pandemic has also highlighted the gap in the circumstances and health outcomes faced by the black community in particular, resulting in a much higher Covid-19 death rate than the general population.
“Systemic racism is a tragic part of American history,” said Jamie Dimon, CEO of JPMorgan, in a statement. “We can do more and do better to break down the systems that have propagated racism and widespread economic inequality, especially for Blacks and Latins. Society has long been addressing racial inequalities in a more tangible and meaningful way.” .
Banks, which have historically contributed to inequality through practices that are now prohibited, including redlining, hope to be part of the solution to society’s problems. Previously, Bank of America and Citigroup had each committed $ 1 billion to reduce inequality.
Most of JPMorgan’s dollar commitment is related to housing. The New York-based bank says it will provide $ 14 billion in loans and investments to stimulate the creation of 100,000 affordable rental units in disadvantaged communities.
The bank will also create 40,000 home equity loans for black and Latino families, adding $ 8 billion worth of mortgages to its pledge. It will also help 20,000 other Black and Latino customers lower their mortgage payments with $ 4 billion in refinancing. That effort will include grants for down payments and closing costs, the bank said.
The bank said the $ 12 billion in additional mortgages is calculated based on the company’s 2019 mortgage volume for minority communities, using that default rate for loans it would make over the next five years.
JPMorgan said it will also provide 15,000 loans worth $ 2 billion to small businesses in the Black and Latin neighborhoods and launch a new program to help entrepreneurs. Additionally, it will spend another $ 750 million with black and Latino suppliers.
“I am heartened to see JPMorgan’s specific and measurable commitments that we believe will address decades of systemic racism towards black communities – and strengthen the well-being of families across the country, as well as our collective economy,” Marc Morial, president of la National Urban League said in a statement.
JPMorgan also said it would give 1 million people in disadvantaged areas access to low-cost bank accounts, in part by opening branches in lower-middle-income communities.
As for its 256,710 workforce, the bank said it will hold managers accountable for diversity goals by incorporating the goals into compensation decisions.
Finally, the bank is providing $ 2 billion in philanthropy, extending and expanding a previous $ 1.75 billion pledged five-year pledge in 2018.