JPMorgan Chase Provides an Update on its $30 Billion Racial Equity Commitment
JPMorgan Chase released a Fact Sheet today to provide an update on its $30 Billion Racial Equity Commitment. The following is the Executive Summary. The full fact sheet is available online here.
In October 2020, JPMorgan Chase announced the $30 Billion Racial Equity Commitment to help close the racial wealth gap among Black, Hispanic and Latino communities. The firm is bringing together its business, philanthropy, policy and data expertise to help close the racial wealth gap and drive inclusive growth.
The five-year Commitment includes lending, equity and direct funding to help increase sustainable homeownership, expand affordable housing, grow small businesses, support diverse suppliers, improve financial health and access to banking and build a more diverse and inclusive workforce.
The firm is building the infrastructure and foundation to make progress on its Racial Equity Commitment. With more work to do, this fact sheet contains three sections: an update on its progress, an overview of the firm’s governance and reporting process and its community and stakeholder engagement approach.
Moving forward, the firm plans to publish its progress annually in its Environmental, Social and Governance (ESG) report starting in May 2022.
Summary of Progress
JPMorgan Chase has deployed or committed more than $13 billion of its $30 billion goal to help close the racial wealth gap. This is largely driven by homeownership refinance and affordable rental housing preservation, which were existing products and processes where the firm took immediate action to do more. While there is more work to do, below is an update on the Commitment.
- Mortgage Refinance: Given the historically low rate environment, the firm quickly helped homeowners save money on their monthly mortgage payments by refinancing 16,000 of the 20,000 incremental loans goal, $4 billion to date.1
- Homeownership: Hired more than 130 Community Home Lending Advisors, expanded the homebuyer grant program to $5,000 in 6,700 minority neighborhoods nationwide and enhanced mortgage products to create better access to credit through pricing improvements and credit expansion.
- Affordable Rental Housing: Funded more than $6 billion in loans to help preserve more than 60,000 affordable housing and rental housing units across the U.S. Also approved lending of $1 billion for the new construction and rehabilitation of affordable housing for low- and moderate-income households.
- Grow Small Business: Hired more than 20 diverse senior business consultants to provide free one-on-one coaching for business owners in 13 U.S. cities and have mentored more than 900 small business owners so far.
- Financial Health: Helped customers open more than 200,000 low cost checking accounts with no overdraft fees. Opened nine Community Center branches and hired 72 Community Managers in underserved communities to build and nurture relationships with community leaders, nonprofit partners and small businesses.
- Minority Depository Institutions (MDIs) and Community Development Financial Institutions (CDFIs): Invested more than $100 million of equity in 14 diverse-owned or -led MDIs and CDFIs that serve more than 87 communities in 18 states and the District of Columbia.
- Workforce: Grew partnerships with Historically Black Colleges and Universities from 3 to 17 to deepen the firm’s recruiting partnerships, expand curriculum development, scholarships and mentorship programs. The firm pledged to hire 4,000 Black students by 2024. It has hired more than 3,800 Black students as interns, fellows and entry-level analysts and is on track to surpass the original goal.
- Philanthropy: Committed $128 million of its five-year, $2 billion philanthropic target, which includes grants, low cost loans and direct equity. The firm is on pace to allocate its full year target of more than $400 million by the end of the year.
- Additional Activities: The Racial Equity Commitment has been a catalyst for evolving how the firm does business and has inspired other activities and investments that go above and beyond the $30 billion. Some examples include creating an Empower money market share class, co-investing $200 million in Project Black, elevating DEI standards as part of its supply chain assessment and investing in the Appraiser Diversity Initiative. Visit jpmorganchase.com to learn more.
- Reporting and Governance: Established a robust reporting and governance process for consistent tracking of the $30 billion Commitment, which is run by the Community Impact organization. The Public Responsibility Committee (PRC) of the JPMorgan Chase Board of Directors provides oversight of this work and is briefed bimonthly on the firm’s progress.
Building on the hiring of community managers, community home lending advisors and small business consultants, the creation and enhancement of products, expansion of new branches in more communities and other efforts, the firm plans to take the following next steps.
- Homeownership: Continue prudently expanding FHA lending and supporting policy reforms to the FHA program, including servicing standards.
- Affordable Rental Housing: Explore innovative financing solutions and work with new public resources to support the development of vital community facilities and new housing for individuals and families earning a wider range of incomes than conventional projects serve.
- Small Business: Further expand access to credit through targeted adjustments to how the firm evaluates credit applications, and it will introduce new product offerings.
- Financial Health: Continue to open more branches, including Community Center branches in low-to-moderate income communities, hire additional Community Managers and host more financial health workshops.
- Workforce: Continue to build a more equitable and representative workforce and hold executives accountable.
- Community Engagement: Host more local convenings with executives who play a direct role in the development of products, services, policy solutions and community investments.
- Multicultural Engagement: Explore opportunities to expand access to in-language resources, services and support in accordance with the latest guidelines from industry regulators.
To learn more about how JPMorgan Chase is helping advance racial equity, visit www.jpmorganchase/racialequity.
1 Based on most recent data collected under the Home Mortgage Disclosure Act (HMDA). Note that while HMDA data collected before or during calendar year 2020 is final, 2021 data may be subject to revision, as HMDA permits correction of any good faith errors identified prior to the annual filing on March 1, 2022.
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