JP Morgan Chase to spend $30B to close racial gap

Amid a national reckoning on racism, JP Morgan Chase says it will dedicate $30 billion to closing the racial wealth gap, from granting loans that help Black and Latino Americans purchase homes, to helping the unbanked open checking and savings accounts.

The five- year effort aims to chip away at the systemic racism and inequities that have been on glaring display during the coronavirus pandemic, which has had a disproportionate impact on the financial as well as physical health of Black and Latino communities.

“Systemic racism is a tragic part of America's history,” Jamie Dimon, JP Morgan Chase's chairman and CEO 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. It's long past time that society addresses racial inequities in a more tangible, meaningful way.”

The initiative will be multipronged, chipping away at the barriers that have hindered the ability of many African Americans and Latinos to buy property, launch a business or find work.

In addition to financing 40,000 mortgages totaling $8 billion, JP Morgan Chase will direct another $4 billion toward helping 20,000 Black and Latino homeowners shave their borrowing costs by refinancing. It's also committing to helping renters, spending $14 billion to help pay for the building and rehabilitation of 100,000 affordable rental units.

Businesses in largely Black and Latino neighborhoods will get technical assistance, coaching and a financial boost from $2 billion in loans.

And JP Morgan plans to spend $750 million with Black and Latino vendors.

New branches opened in underserved neighborhoods will enable 1 million people to open bank accounts at minimal cost. And JP Morgan Chase says it will invest in financial institutions helmed by Black and Latino Americans, contribute $2 billion to initiatives focused on those communities, and track its own internal goals to have a more inclusive workforce by making those markers a factor in performance evaluations.

Discrimination, including outright violence have long made it difficult for people of color, particularly African Americans, to build and hold onto wealth. The differences remain stark. The national homeownership rate for white households was 73.7% in the first quarter of this year, according to a report from real estate brokerage Redfin as compared to 44% for Black households.

And in addition to dying at a disproportionate rate from the coronavirus, Black and Latino Americans are also bearing the brunt of the economic downturn sparked by the pandemic.

The jobless rate for whites was 7% in September as compared to 10.3% for Latinos and 12.1% for African Americans.