JPMorgan Chase Commits $30 Billion to Advance Racial Equity


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JPMorgan Chase is making a $30 billion commitment over the next five years to address some of the largest drivers of the racial wealth divide. The following outlines the firm’s business, policy and philanthropic commitments.

I. Promote Affordable Housing and Homeownership for Underserved Communities

Black and Latinx households face a housing affordability crisis when it comes to both homeownership and rental opportunities. Homeownership rates are 25% lower for Black and Latinx families and, as rents continue to rise, Black and Latinx households are more likely to be cost-burdened than White households.

A. Homeownership

Over the next five years, the firm expects to originate an additional 40,000 home purchase loans for Black and Latinx households. To do this, the firm is committing $8 billion in mortgages. The firm is also committing to help an additional 20,000 Black and Latinx households achieve lower mortgage payments by providing up to $4 billion in refinance loans over the next five years.

  • Increase down payment and closing cost assistance funds for purchased and refinanced loans, and increase availability of affordable lending products for both buyers and current homeowners.

    • One of the material impediments to home ownership is closing costs and the following programs help address the issue:
      • Chase is making it easier for first time homebuyers in underserved communities to achieve homeownership. For example, in Chicago, Chase has doubled its homebuyer assistance grant to $5,000 in majority-Black communities.
      • To help more current homeowners take advantage of historically-low interest rates, but who cannot afford the upfront cash needed to refinance, Chase is providing a $2,500 grant to customers who refinance with the firm’s DreaMaker product.
  • Amplify education and counseling programs to prepare more Black and Latinx communities for sustainable homeownership. To ensure lasting and responsible homeownership, Chase will further its work with counseling entities across a wide range of nonprofit relationships to develop, maintain and innovate homebuyer readiness programs. Additionally, the firm will leverage resources across the firm to optimize existing financial education services to better reach these communities.  

  • Policy: Advocate for comprehensive housing reforms to increase access to homeownership. JPMorgan Chase will work with the U.S. Department of Housing and Urban Development (HUD) to modernize FHA servicing and origination, improve loss mitigation options, and simplify policies and procedures; advocate for the GSEs to meet Duty to Serve commitments; and work with regulators to open private securitization markets for safe loans all of which will significantly improve the cost and availability of mortgages to consumers. These actions could increase homeownership, increase economic growth by up to 0.2% per year, reduce mortgage cost by 20-30bp, and add $500B of additional mortgages to the market. Approximately 70% of this increase will be in GSE production and 30% in FHA production.

B. Affordable Rental Housing

Over the next five years, the firm will finance an additional 100,000 affordable rental units. To do this, the firm will provide $14 billion in new loans, equity investments and other efforts to expand affordable housing in underserved communities.   

  • Increase funding for the construction and rehabilitation of affordable housing for low- and moderate-income households by $2 billion over the next five years. Additionally, this year the firm increased Low-Income Housing Tax Credit (LIHTC) investments by $400 million, in line with its significant long-standing commitment.

  • Expand financing to preserve affordable rents. JPMorgan Chase will create incentives to help maintain affordability for rental units over the next five years. The firm will also invest $500 million in affordable housing preservation funds over the next five years.

  • Invest in vital community institutions and services. JPMorgan Chase will provide over $300 million in additional financing to Community Development Financial Institutions (CDFIs) over the next five years to support communities that lack access to traditional financing. Additionally, this year the firm is making an additional $100 million in New Market Tax Credits (NMTC) investments with a focus on Black-owned or -led projects as well as projects primarily serving Black populations.

II. Grow Black- and Latinx-owned Businesses

Black and Latinx small business owners face barriers to grow and scale their businesses. Black people represent nearly 13% of the U.S. population but only 4% of small business owners.

A. Small Business Support

Over the next five years, the firm will provide an additional 15,000 loans to small businesses in majority-Black and -Latinx communities. To do this, the firm will deliver $2 billion in loans.

  • Launch a new program designed to help entrepreneurs in historically underserved areas access coaching, technical assistance and capital. The new program will provide small businesses with 1:1 coaching and mentorship to help grow their businesses. The program will launch in Chicago, Atlanta, Los Angeles, Washington D.C., Houston and Detroit in 2020, with expansion to additional cities in 2021. Next year, the program expects to rollout lending solutions with expanded credit eligibility to business owners from historically underserved communities.

  • Accelerate a digital lending product to better support the needs of small Black- and Latinx-owned businesses seeking quick access to capital. According to the Federal Reserve, minority small business owners cite long wait times for funding as their most common pain point with large bank lending. Minority small business owners are also twice as likely as White business owners to not apply for credit they need due to challenges with the application process. In order to better meet the needs of minority business owners, the firm will accelerate the rollout of its digital lending product. This digital lending product will better serve small business owners by offering faster time-to-funding and requiring a shorter, simpler application.

  • Expand the Entrepreneurs of Color Fund to support more Black and Latinx small business owners nationwide. In collaboration with LISC and a network of CDFIs, JPMorgan Chase will join other funders in supporting the expansion of the Entrepreneurs of Color Fund, currently operating in five U.S. cities, to a nationwide program providing low-cost loans and technical assistance to minority-owned small businesses.  

  • Policy: Advocate for Small Business Administration (SBA) reforms and new aid for COVID-19.  JPMorgan Chase will work with SBA to align products to meet the needs of Black and Latinx businesses and communities, provide additional aid for small businesses impacted by COVID-19 and more.

B. Supplier Diversity

  • Building on the firm’s supplier diversity efforts, JPMorgan Chase will spend an additional $750 million with Black and Latinx suppliers. 

III. Improve Financial Health and Access to Banking in Black and Latinx Communities

There are significant racial disparities in the financial health of Black and Latinx households, which serve as a barrier to achieve financial stability, meet their long-term financial goals and build wealth. According to the JPMorgan Chase Institute, Black and Latinx families have 32 and 47 cents in liquid assets for every $1 held by White families.

A. Financial Health

Over the next five years, the firm expects to help one million people open new low-cost checking or savings accounts. To do this, the firm commits to hiring 150 new community managers, open new Community Center branches in underserved communities and materially increase marketing spend to reach more customers who are currently underserved, unbanked or underbanked.

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