JPMorgan Chase uses $ 30 billion to promote racial equity

The United States’ largest bank, JPMorgan Chase, unveiled a series of new initiatives on Tuesday as part of its recently announced $ 30 billion pledge to promote racial heritage over the next five years.

The financial institution is pledging support to Minority Depositary Institutions (MDIs) and Community Development Financial Institutions (CDFIs) led by several institutions as part of its program. “We know that these crucial institutions create lasting change for the Black and Latinx families,” said JPMorgan Chase’s global head of Diversity and Inclusion, Brian Lamb, in making the announcement, “and we hope that our support will help elevate people and businesses. that are the backbone of our local economies. “

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JPMorgan will launch Empowering Change, a new program supported by a $ 500 million investment from Google and in partnership with MDIs and CDFIs to provide economic opportunity for underserved communities. The program will introduce a new class of participation in the Empower money market, which will be distributed exclusively by MDIs and CDFIs, including Harbor Bank of Maryland, Liberty Bank and Trust, M&F Bank and Unity National Bank.

In addition, the new Empower money market share class will allow institutional clients and investors to support MDIs and CDFIs from diverse backgrounds, helping to create a positive social impact.

An annual donation of 12.5% ​​of the revenue received from management fees on the assets of the Empower share class will be made to the Community Development and Empowerment Fund of the Chicago Community Trust. Institutions will also have access to the depth and breadth of JPMorgan Asset’s management resources, including the Morgan Money digital investment platform, sales and marketing and customer service reporting. In addition, partner companies will receive training, education and marketing resources led by JPMorgan.

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JPMorgan is also committing $ 40 million to the MDIs led by Black and Latinx as part of a $ 50 million capital pledge. The initial round of investments will be used to support minority-owned and black-led MDIs, including holding companies for Liberty Bank and Trust, M&F Bank, Carver Federal Savings Bank and Broadway Federal Bank.

By mid-year, JPMorgan Chase expects to increase its investments in MDIs to also include Latinx-led MDIs and give institutions access to up to $ 500 million in community loans across the country to create wealth in communities and develop local businesses. The funds can be used to provide more loans to consumers and businesses, expanding operations and opening branches to serve more communities and investing in new technologies and digital resources to modernize platforms, increase efficiency and provide a better customer experience.

In addition to the investments, the MDIs will become JPMorgan’s clients, gaining access to the company’s expertise, solutions and network.

The announcement is based on the company’s close relationship with Liberty Bank and Trust and Harbor Bank of Maryland through the Treasury Department’s Bank Mentor Protégé Program, which aims to promote inclusion among financial institutions and extend access to banking services to all communities.

“JPMorgan Chase was one of the first to become a mentor bank for the Treasury Bank’s Mentor Protégé Program,” said Lorraine Cole, chief director of Diversity and Inclusion at the US Treasury Department. “The expansion of mentoring and training support for banks with diverse leaderships demonstrates the serious commitment they share with the Treasury to sustain and develop capacity among small and minority banks. In addition, their newly announced financial products and capital investments, targeted specifically at MDIs and CDFIs, can have a profound impact on the communities they serve. “

In the past few months, other major banks have also invested in or created programs with minority-owned banks.

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JPMorgan will also work with MDIs and CFDIs to offer premium tax credit investment prices from new markets to nonprofits and black, led and black owned companies. Funding will go to significant community projects, including supermarkets, shelters, health clinics and small businesses. The racial equality program is part of an additional $ 100 million NMTC funding annually dedicated to various organizations.

The first $ 20 million investment, made in partnership with the Harbor Bank of Maryland, City First Bank and Partners for the Common Good, will provide essential funds to the Community of Hope, based in Washington, DC, for the purchase, renewal and expansion of a family health center and childbirth center, which will provide more than 5,800 patients annually with medical, dental and behavioral health services. The Community of Hope is the only medical facility with a labor and delivery unit that serves northeastern and southeastern DC and helps nearly 400 women a year with antenatal care.

JPMorgan will additionally provide more than $ 300 million in additional financing for CDFIs over the next five years, after originating more than $ 285 million in loans to CDFIs and their affiliates in 2020 and supporting the development of food banks and shelters, health centers , supermarkets and schools across the country through the NMTC Racial Equity program. At least six of the projects, totaling more than $ 60 million in funding, specifically supported low-income communities.

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Other programs that JPMorgan has established to help communities around the world as they recover from the COVID-19 pandemic and the racial inequalities it highlighted include:

• AdvancingCities, a $ 500 million philanthropic investment to drive inclusive growth and create greater economic opportunities in cities around the world, including Detroit, Chicago, Bay Area, Greater Washington Area (DC) and Greater Paris
• The JPMorgan Chase Policy Center, which develops and advances sustainable and evidence-based policy solutions to drive economic growth in collaboration with political, business and community leaders
• The Entrepreneurs of Color Fund, a collaboration with Local Initiatives Support Corporation (LISC) and a network of CDFIs that provide Black, Latinx and other needy entrepreneurs with access to capital and technical knowledge
• New Skills at Work, a $ 350 million initiative that focuses on hiring employees with a criminal record and supporting their re-entry into the job market