JPMorgan Chase Announces Initiatives to Support Minority-Owned and Diverse-Led Financial Institutions
Published: February 23, 2021
JPMorgan Chase today announced initiatives to further support Minority Depository Institutions (MDIs) and diverse-led Community Development Financial Institutions (CDFIs), as part of the firm’s recently announced $30 billion commitment to advancing racial equity.
MDIs and CDFIs provide vital financial services in communities that are often underserved. In order to provide this necessary funding to underrepresented communities, many MDIs and CDFIs need additional capital themselves.
These new initiatives are focused on strengthening minority-owned and diverse-led financial institutions by providing additional access to capital, connections to institutional investors, specialty support for Black-led commercial projects and mentorship and training opportunities.
To support MDIs and CDFIs, today the firm is announcing:
JPMorgan Chase has launched Empowering Change, a unique program supported by Google and in partnership with MDIs and diverse-led CDFIs to provide economic opportunity to underserved communities. The program is designed to allow MDIs and CDFIs to offer new investment products to their customers, boost their technological capabilities and develop new revenues through fund distribution.
Google is anchoring the program’s launch with an intent to invest $500 million in the Empower money market share class that will be initially distributed by diverse-led MDIs The Harbor Bank of Maryland, Liberty Bank and Trust, M&F Bank and Unity National Bank. This initiative builds on Google’s partnership with Opportunity Finance Network to support CDFIs, and multiple racial equity commitments made in 2020.
The Empowering Change program includes:
The annual donation will be made for the life of the Empower share class to the Empower and Community Development Fund, a Donor-Advised Fund administered by the Chicago Community Trust that is committed to supporting community development to expand opportunities within underserved communities.
The firm has invested and committed the first $40 million of the $50 million equity pledge to Black and Latinx-led MDIs. The initial round of investments support minority-owned and Black-led MDIs including the holding companies for Louisiana-based Liberty Bank and Trust, North Carolina-based M&F Bank, New York-based Carver Federal Savings Bank and Los Angeles-based Broadway Federal Bank.
By mid-year, JPMorgan Chase is expecting to increase its investments in MDIs to also include Latinx-led institutions. In total, the investments and commitments could generate access to as much as $500 million in community lending across the nation. The capital will help MDIs create wealth in communities, grow local businesses and could be used to:
In addition to the equity investments, these MDIs will also become J.P. Morgan clients and gain access to the firm’s expertise, solutions and network.
This announcement builds on the firm’s close relationships with Liberty Bank and Trust and The Harbor Bank of Maryland through the U.S. Department of the Treasury’s Bank Mentor Protégé Program, an important part of a broader strategy to promote inclusion across financial institutions and extend access to banking services to all communities.
Working with MDIs and diverse-led CDFIs, JPMorgan Chase is providing premium New Markets Tax Credit (NMTC) investment pricing for Black-owned, Black-led and Black-serving nonprofits and businesses and helping to direct NMTC financing to meaningful community projects, including grocery stores, shelters, healthcare clinics and small businesses. This Racial Equity program is part of the additional $100 million in NMTC financing annually dedicated to diverse organizations, as part of the firm’s $30 billion commitment to advancing racial equity.
The first $20 million investment, made in partnership with The Harbor Bank of Maryland, City First Bank and Partners for the Common Good, will provide critical funds to Community of Hope for the purchase, renovation and expansion of the Family Health and Birth Center. The facility—which will annually provide more than 5,800 patients with medical, dental and behavioral health services—is the only medical establishment with a labor and delivery unit serving the Northeast and Southeast quadrants of D.C. and helps nearly 400 women per year with prenatal care.
JPMorgan Chase is providing more than $300 million in additional financing to CDFIs over the next five years. The firm originated over $285 million of lending to CDFIs and their affiliates in 2020 and has also supported the development of food banks and shelters, healthcare centers, grocery stores and schools across the nation through the NMTC program. Six of these projects, totaling more than $60 million in financing, have specifically supported low-income communities as part of the NMTC Racial Equity Program.
Lasting Community Impact
JPMorgan Chase is using its expertise in business, policy, data and philanthropy to help create an inclusive recovery and provide economic opportunity to underserved populations, especially the Black and Latinx communities.
The firm is also using its resources to provide end-to-end support, including lending, equity, training, mentoring and networking, to Black and Latinx communities and businesses as part of its $30 billion commitment to advance racial equity, Advancing Black Pathways program and other initiatives.
To assist communities as they recover from the COVID-19 pandemic and the racial inequities it has highlighted, JPMorgan Chase continues to create greater economic opportunity in cities around the world through:
Comments on the Importance of Supporting Minority-Owned and Diverse-Led Financial Institutions
“MDIs and CDFIs play a very important role in driving positive change in our communities,” said Doug Petno, CEO of Commercial Banking. “As they continue to strengthen their foundations and scale, these vital institutions will provide additional capital, resources and services to help more people and businesses in the communities that need it most.”
“The COVID-19 pandemic has only exacerbated the racial inequalities in the U.S., which puts a strain on families’ economic mobility and impedes the continued growth of our economy," said Brian Lamb, Global Head of Diversity & Inclusion at JPMorgan Chase. “We know these crucial institutions create lasting change for Black and Latinx families and we hope our support will help uplift the people and businesses that are the backbone of our local economies.”
“The Empowering Change program will create new economic opportunities for minority-owned and diverse-led financial institutions, enabling qualified firms to offer our money market funds, as well as gain access to advisory support, management training and talent development,” said Paula Stibbe, Head of Global Liquidity, Client at J.P. Morgan Asset Management. “This will empower these firms to deliver ongoing positive change in their communities. At the same time, corporate investors can make their money matter by investing in the Empower share class, designed specifically to support their socio-economic goals.”
“JPMorgan Chase was one of the first to step up to become a mentor bank in the Treasury Bank Mentor Protégé Program,” said Lorraine Cole, Chief Diversity and Inclusion Officer for the U.S. Department of the Treasury. “Their expansion of mentoring and training support to diverse-led banks demonstrates the serious commitment they share with Treasury to sustain and build capacity among small and minority-owned banks. And, their newly announced financial products and equity investments directed specifically to MDIs and CDFIs can have deep impact into the communities they serve. As the Administration and nation confront the triple pandemics—to contain COVID-19, deliver economic relief, and advance racial justice—such strategies that strengthen the nation’s financial network and banking services in every community are an important part of this broader imperative.”
“Google is committed to helping create sustainable equity and economic opportunity for all,” said Juan Rajlin, Vice President & Treasurer at Google. “We know that racial equality is directly linked to economic opportunity and are proud to partner on the Empowering Change program, which will help create new business opportunities for minority institutions.”
“This infusion of capital will allow us to scale up our efforts to support small businesses, increase our mortgage lending and help refinance predatory lending products, which will result in significant cash flow enhancements for our most challenged communities,” said Liberty Bank President and CEO Alden J. McDonald Jr. “We appreciate the confidence JPMorgan Chase has placed in our ability to understand our customer base and offer financial services that build wealth in our communities.”
“For nearly forty years, The Harbor Bank of Maryland has been committed to creating wealth in the African-American community by improving access to capital and financial services,” said Joseph Haskins, Jr. Harbor Bank of Maryland Chairman and CEO. “Through our work with JPMorgan Chase and Google, we believe that there is a growing demonstration of the ability of trusted local partners and large, committed corporations to deliver innovative solutions, expand economic opportunity and better serve our communities, customers, and shareholders.”
“Now more than ever, we are committed to building the strength and sustainability of minority-owned banks, particularly Black banks, and the communities they serve,” said Robert James, Chairman of the National Bankers Association. “We welcome JPMorgan Chase as an Affiliate Member of the NBA and look forward to working closely with them as they expand their equity investments and revenue partnerships to more of our members and help them structure those investments in ways that maximize the overall impact in the chronically underserved communities of color served by our banks.”
For more information visit www.jpmorganchase.com/impact/path-forward.
[1] JPMorgan Prime Money Market Fund, JPMorgan 100% U.S. Treasury Securities Money Market Fund, JPMorgan U.S. Government Money Market Fund and JPMorgan U.S. Treasury Plus Money Market Fund