JPMorgan Chase, the largest U.S. bank, announced a series of new measures on Tuesday as part of its recently announced $30 billion pledge to increase race rights over the next five years.
As part of its plan, the financial institution pledged to support minority depository institutions (MDI) and diverse-led community development financial institutions (CDFI). Brian Lamb, Global Head of Diversity and Inclusion at JPMorgan Chase, said in announcing the news: “We know that these important institutions have brought lasting changes to black and Latino families. We hope our support will help improve our local economy for the people and companies that are the backbone of the industry.”
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JPMorgan Chase will launch the “Empowering Change”, a new program supported by Google’s $500 million investment, and working with MDI and CDFI to provide economic opportunities for underserved communities. The plan will introduce a new Empower currency market share category, which will be exclusively distributed by MDI and CDFI, including Maryland’s Seaport Bank, Liberty Bank and Trust, M&F Bank and Unity National Bank.
In addition, the new Empower currency market share category will enable institutional clients and investors to support MDI and the diversified-led CDFI, thereby contributing to a positive social impact.
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12.5% of the income from Empower’s stock asset management fees will be donated to Empower and the Community Development Fund of Chicago Community Trust each year. These institutions will also receive the depth and breadth of the resources of JPMorgan Chase Asset Management, including Morgan Money digital investment platform, sales and marketing, and customer service reports. In addition, partner companies will also receive training, education and marketing resources led by JPMorgan Chase.
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JPMorgan Chase also pledged to provide $40 million to MDI led by Black and Latinx as part of its $50 million equity commitment. The first round of investment will be used to support minority-owned and black-dominated MDIs, including holding companies of Liberty Bank and Trust Fund, M&F Bank, Carver Federal Savings Bank and Broadway Federal Bank.
By the middle of the year, JPMorgan Chase expects to increase its investment in MDI, including MDI led by Latinx, and enable the institution to obtain up to $500 million in community loans across the country to create wealth in the community and develop local enterprise. These funds can be used to provide more loans to consumers and businesses, expand operations and open branches to serve more communities, and invest in new technologies and digital functions to modernize the platform, improve efficiency and provide a better customer experience.
In addition to investment, these MDIs will become clients of JPMorgan Chase, thereby obtaining the company’s expertise, solutions and network.
The announcement is based on the company’s close relationship with Liberty Bank, Trust Bank and Maryland Port Bank through the Department of Treasury’s “Bank Mentor Protection Program”, which aims to promote integration among financial institutions and expand access to banking services to all communities range.
US Treasury Chief Secretary Roland Cole said in a statement: “JP Morgan Chase was one of the first to become a mentor bank in the Treasury Bank’s mentor protection program.” “They extended their guidance and training support to various leaders Banks, which shows that they and the Ministry of Finance share a serious commitment to maintain and build the capacity of small and minority banks. Moreover, their newly released financial products and equity investments specifically for MDI and CDFI may have an impact on the communities they serve Have a profound impact.”
In the past few months, other major banks have also invested in minority-owned banks or established cooperative programs with them.
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JPMorgan Chase will also cooperate with MDI and CFDI to provide high-quality new market tax credit investment pricing for non-profit organizations and companies owned, led and served by blacks. The funds will be used for meaningful community projects, including grocery stores, shelters, medical clinics and small businesses. The race equity plan is part of an additional $100 million in financing provided by NMTC to organizations each year.
The first $20 million investment in partnership with Maryland Port Bank, City One Bank, and “Public Goods” partners will provide critical funding for the Hope Community in Washington, DC for purchases, renovations and expansion of family health care and childbirth The center will provide medical, dental and behavioral health services to more than 5,800 patients each year. Hope Community is the only medical institution that provides labor and childbirth services to the Northeast and Southeast Districts of Columbia, providing antenatal care for nearly 400 women each year.
After providing more than US$285 million in loans to CDFIs and their affiliates in 2020 and supporting the development of food banks and shelters, medical centers, grocery stores and schools, JPMorgan Chase will also provide more than US$300 million to CDFIs in the next five years Additional financing. Through the NMTC Racial Equality Program is carried out nationwide. At least six projects (a total of more than US$60 million in financing) have specifically supported low-income communities.
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JPMorgan Chase has also developed other plans to help the global community recover from the COVID-19 pandemic and emphasized racial inequality, including:
- AdvancingCities, a $500 million philanthropic investment aimed at promoting inclusive growth and creating greater economic opportunities in global cities including Detroit, Chicago, Bay Area, Greater Washington (DC) and Paris
- The JPMorgan Chase Policy Center, which works with policy, corporate and community leaders to develop and advance evidence-based sustainable policy solutions to drive economic growth
- Entrepreneurs of the Color Foundation, cooperation with the Local Program Support Company (LISC) and CDFI’s network provide black, Latino and other underserved entrepreneurs with access to capital and technical expertise
- “New Skills at Work”, a $350 million program that focuses on hiring employees with criminal backgrounds and supporting them to return to the workplace