NEW YORK – JPMorgan Chase on February 23 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.
According to a JPMorgan news release, 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.
JPMorgan announced the $30 billion commitment last October last October, following the killings of George Floyd and Breonna Taylor, CNBC reported, adding that “the ongoing coronavirus pandemic has also highlighted longstanding systemic health and social inequities.”
“Systemic racism is a tragic part of America’s history,” Greek-American Jamie Dimon, CEO of JPMorgan Chase, said in a statement at that time, CNBC reported. “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.”
“Historically, banks have contributed to inequality through now-banned practices such as redlining,” CNBC reported, adding that “JPMorgan’s peers, such as Bank of America and Citigroup, also made billion-dollar commitments to reduce inequality.”
As part of its latest efforts, JPMorgan Chase said it has “invested and committed the first $40 million of its $50 million equity pledge to Black and Latinx-led minority depository institutions,” CNBC reported, noting that “the firm added that it has also established a racial equity program, by providing New Markets Tax Credit investment pricing for Black-led, Black-owned and Black-serving nonprofits and businesses.”
“This tax credit provides investors a tax incentive for investing in low-income communities,” CNBC reported, noting that “JPMorgan said it will help direct financing from the tax credit to community projects, including shelters, healthcare clinics and small businesses.”
Also announced in its statement on February 23, 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:
• A new Empower money market share class for distribution by MDIs and diverse-led CDFIs, offered across J.P. Morgan Asset Management’s suite of money market funds, allowing institutional clients to support MDIs and diverse-led CDFIs and create a positive social impact
• An annual donation of 12.5% of revenue received from the management fees on Empower share class assets to support community development
• Access to the depth and breadth of J.P. Morgan Asset Management’s resources, including the Morgan Money digital investment platform, sales and marketing and client service support
• Training, education and marketing resources for partner firms led by JPMorgan Chase
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.
More information is available online: www.jpmorganchase.com/impact/path-forward.