JPMorgan Chase will contribute $30 billion in an effort to close the racial wealth gap through a combination of loans, investments and philanthropy made to Black and Latinx communities, the bank said Thursday.
The nation’s largest bank said it would spend $8 billion to originate 40,000 mortgages for Black and Latinx households over the next five years, and provide $14 billion in loans and investments meant to create 100,000 affordable rental units in underserved communities.
The New York-based bank joins a growing number of financial institutions and corporations that have pledged funds to combat racial injustice, as well as the economic and racial inequality exacerbated by the coronavirus pandemic in recent months.
JPMorgan’s $30 billion pledge includes external and internal commitments to close the racial wealth gap, and comes amid a national reckoning on racial equality following the deaths of Ahmaud Arbery, George Floyd and Breonna Taylor this year.
Other large banks, including Bank of America, U.S. Bank and PNC have announced similar efforts to fight racial injustice.
"Systemic racism is a tragic part of America’s history," JPMorgan Chase CEO Jamie Dimon said in a statement Thursday. "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."
The majority of JPMorgan’s pledge focuses on narrowing the gap in housing and homeownership among Black and Latinx communities.
As of the first quarter of the year, 44% of Black families owned a home, compared with 73.7% of White families, according to a Redfin analysis of U.S. Census data.
JPMorgan's initiative also includes plans to provide $2 billion to originate 15,000 loans to small businesses in Black and Latinx communities.
The bank said it will launch a new coaching program designed for entrepreneurs in historically underserved areas, and accelerate a digital lending product to better support the needs of minority-owned small businesses seeking access to capital. The bank said it would also spend an additional $750 million with Black and Latinx suppliers.
The bank's pledge also includes expanding banking services to underserved communities. JPMorgan Chase said it will continue to open 100 new branches in low-to-moderate income communities across the country as part of its market expansion initiative. It will also invest up to $50 million in capital and deposits in Black and Latinx-led minority depository institutions (MDIs) and community development financial institutions (CDFIs).
JPMorgan's internal initiatives aim to hold executives accountable for diversity targets by incorporating priorities and progress into year-end performance evaluations and compensation decisions, the bank said.
The bank will also provide $2 billion in philanthropy, expanding on the bank’s current five-year, $1.75 billion philanthropic commitment made in 2018.