JPMorgan Pledges To Invest $30 Billion Into Narrowing The Racial Wealth Gap
The corporation's investment plan includes $4 billion for mortgage refinancing.
October 09, 2020 at 1:27 pm
Amid the ongoing nationwide outcry for social justice, one of the largest banks in the United States has answered the bell with a $30 billion investment to address the massive wealth gap between Black and white Americans.
The corporation's investment plan includes $4 billion for mortgage refinancing, $2 billion for small business lending, $2 billion in philanthropic capital, as well as $8 billion to increase affordable housing and homeownership in underserved communities. Another $50 million will go toward supporting minority-owned financial institutions.
JPMorgan is also investing $14 billion for new housing loans to Black and Latinx borrowers. In addition, the bank is looking to increase hiring and investment in existing employees, with the goal of building a more equitable and representative workforce and holding executives accountable.
"Systemic racism is a tragic part of America’s history," CEO Jamie Dimon 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."
With its massive investment, JPMorgan continued the recent trend of large corporations contributing to the fight for social justice. According to AXIOS, 58 companies have pledged more than $3 billion since the killing of George Floyd, which sparked the nationwide protests.
Some of the companies which have committed to contributing include Comcast, Bank of America, Walmart, IBM, Pepsi, Apple, Citigroup, Anthem and Capital One. JP Morgan, however, became the largest monetary contributor with its $30 billion investment.
"JPMorgan essentially is setting an example of what to do," Andre Perry, a fellow at the Brookings Institution, told Axios.
The bank's contribution also comes at a time when the Black community has been disproportionately hampered by the pandemic. As Blavity previously reported, more than 400,00 Black businesses have closed permanently because of COVID-19.
Black and Latinx people have also reported a much higher rate of economic hardship than their white counterparts during the pandemic, a study from The Commonwealth Fund concluded.
“I am heartened to see JPMorgan’s specific, measurable commitments that we believe will address decades of systemic racism toward Black communities – and will bolster the well-being of families across the country, as well as our collective economy,” Marc Morial, president of the National Urban League, said in a statement.
According to CNBC, Banks have historically contributed to redlining, refusing to invest in Black communities. But the contributions from JPMorgan, Bank of America and Citigroup signals a shift from previous years.
Dana Peterson, chief economist at the Conference Board, said there is a precedent being set, but the key is to make sure the contributions are making an impact.
"If you’re a corporation or especially a financial institution money is the easiest thing," Peterson said. "But the hard thing is implementation, making sure that you’re actually having an effect. The execution is going to be very important."