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JPMorgan Chase Provides an Update on its $30 Billion Racial Equity Commitment
Represents progress driven through December 2021
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 advance racial equity 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 progress, an overview of the firm’s governance and reporting process and its community and stakeholder engagement approach.
Starting in March 2022, JPMorgan Chase plans to publish its progress annually in its Environmental, Social and Governance (ESG) report. Below is an update following the release of 2021 data as published in the report.
Update on the Racial Equity Commitment
As of end of year 2021, JPMorgan Chase has deployed or committed more than $18 billion of its $30 billion goal to help close the racial wealth gap. . This was largely driven by affordable rental housing preservation and homeownership refinance – areas where we had existing products and processes and could take prompt action to further our efforts. The Firm is building the infrastructure and foundation to make progress on its commitment – and we are taking a thoughtful approach to building long-term, sustainable infrastructure to enable our Firm to accelerate progress and reach more people going forward. As published in our 2021 ESG report, below is an update on progress:
- Originate an incremental 40,000 home purchase loans ($8 billion) and refinance an additional 20,000 mortgages ($4 billion) for Black, Hispanic and Latino households.
- Home Lending continues to make progress in its lending commitment to Black, Hispanic and Latino communities.
- Refinanced 19,000 of the 20,000 incremental loans goal, nearly $5 billion.
- Originated nearly 12,000 home purchase loans for Black, Hispanic and Latino households in 2021, totaling more than $4 billion. While the number of units was slightly below 2019 production volume, the firm continues to pace towards originating an incremental 40,000 purchase loans by 2025.
- Hired more than 150 Community Home Lending Advisors as part of our newly-established Community and Affordable Home Lending business.
- Finance the creation and preservation of 100,000 affordable rental units through $14 billion in new loans, equity investment and other efforts.
- Provide more than $300 million in additional financing to Community Development Financial Institutions ("CDFIs") to support communities that lack access to traditional financing.
- Target an additional $100 million in New Markets Tax Credit ("NMTC") investments with a focus on Black-owned or -led projects primarily serving Black populations
- Approved funding of approximately $13 billion in loans to help preserve more than 100,000 affordable housing and rental housing units across the U.S.
- Created the Community Development Banking Capital Solutions team to offer innovative financing options for affordable housing and community facilities by working with a broad range of capital sources.
- Increased Low-Income Housing Tax Credit ("LIHTC") investments by $400 million.
- Closed on $76 million of the $500 million commitment to affordable housing preservation funds.
- Provided more than $190 million in incremental financing to CDFIs.
- Established a new Racial Equity Initiative, which uses NMTC investments to spur growth and inclusion. Since 2020, the Firm has funded $221 million in new projects related to that effort.
- Invest up to $50 million (later increased to $100 million) –in the form of capital and deposits to Black, Hispanic and Latino-owned or -led Minority Depository Institutions ("MDIs") and CDFIs.
- Invested more than $100 million of equity in 15 diverse-owned or -led MDIs and CDFIs that collectively serve more than 89 communities in 19 states and the District of Columbia.
- Provide an additional $2 billion for 15,000 small business loans to Black, Hispanic and Latino communities.
- Building the infrastructure and foundation to help small businesses grow through new programs, products and hiring, including:
- Hired 25 diverse senior business consultants to provide free one-on-one coaching for business owners in 14 U.S. cities.
- Mentored more than 1,000 small businesses.
- Hosted educational events, community workshops and business training sessions with more than 28,000 participants.
- Through government relief programs, business owners sought relief and liquidity from the U.S. Small Business Administration ("SBA"), including the Paycheck Protection Program ("PPP") and Economic Injury Disaster Loans ("EIDLs"). While PPP loans are not part of the Firm’s Racial Equity Commitment, JPMorgan Chase was the #1 PPP lender on a dollar basis – over the life of the program, we funded more than 400,000 loans for more than $40 billion. More than 30% of those loans went to businesses in majority-minority census tracts.
- While small business lending volume through 2021 is below 2019 levels, the Firm expects to make progress against the $2 billion small business lending commitment in the years ahead.
- Spend an additional $750 million with Black, Hispanic and Latino suppliers.
- Spent an additional $155 million with more than 140 Black, Hispanic and Latino suppliers.
- Help one million consumers open low-cost checking or savings accounts by opening branches in underserved communities and increasing marketing to reach more underserved, unbanked or underbanked consumers.
- Hire 150 community managers and open new Community Center branches in underserved communities.
- Continue to invest in our real estate presence in low-to-moderate income neighborhoods around the country.
- Helped customers open more than 200,000 low-cost checking accounts with no overdraft fees.
- Opened an additional 10 Community Center branches in low-to-moderate communities, often in urban areas with larger Black, Hispanic and Latino populations.
- Opened 47 out of 100 new branches in low-to-moderate income communities, many with larger Black, Hispanic and Latino populations.
- Hired more than 100 Community Managers in underserved communities who serve as local ambassadors to build and nurture relationships with community leaders, nonprofit partners and small businesses
- Build a more equitable and representative workforce and hold executives accountable by incorporating priorities and progress into year-end performance evaluations and compensation decisions for members of the Operating Committee and their direct reports.
- Expanded our Accountability Framework to include additional select senior leaders.
- Expanded the Diversity, Equity and Inclusion program to create three new employee programs supporting Hispanic and Latino employees, LGBT+ employees and Asian and Pacific Islander employees.
- The Firm pledged to hire 4,000 Black students by 2024, and exceeded the total goal this year by hiring 4,192 Black students as interns, fellows and entry-level analysts.
- Provide $2 billion in philanthropic capital to advance an inclusive economic recovery and support Black, Hispanic and Latino and other underserved communities.
- Committed $396 million toward our philanthropic target, which includes grants, low-cost loans and direct equity.
We are holding ourselves accountable to achieving our Racial Equity Commitment.
We have established a robust reporting and governance process for tracking our commitment and plan to publicly share our progress in future ESG reports.
We also announced we intend to retain a third-party to perform an audit of this effort and plan to prepare and publish a report based on the results of the audit by the end of 2022.
The Firm’s Community Impact organization serves as the crossline-of-business group responsible for reviewing and reporting on the activities that align to the Racial Equity Commitment. The governance team consists of: executive owners from each line of business with accountability to both the Chief Executive Officer ("CEO") and the Community Impact team; community teams that are responsible for on-the-ground implementation in partnership with local market leadership teams; and the executive leadership team with CEOs from each line of business.
The Public Responsibility Committee of the JPMorgan Chase Board of Directors provides oversight of this work and is briefed periodically on the Firm’s progress. The Firm's Public Engagement team is dedicated to connecting with external stakeholders, including civil rights organizations, consumer policy groups, non-profit organizations, civic leaders, trade associations and diverse chambers of commerce.
In addition to ongoing relationship building, the Public Engagement team facilitates the Chase Advisory Panel ("CAP") program, a series of regular conversations between stakeholders and JPMorgan Chase senior executives. The CAP program is grounded in the Firm's commitment to including diverse voices in the development of products, services and approaches, including accountability for racial equity. In 2021, Public Engagement connected with over 200 stakeholders around the Racial Equity Commitment.
Continue our efforts to help expand homeownership for Black, Hispanic and Latino households and, in doing so, help to stabilize and revitalize communities across the country. We will continue to execute and enhance our six-pillar community and affordable strategy focused on enhancing products; increasing our people; expanding our presence, partnerships and promotion; and supporting housing policy reform. The Firm plans to continue prudently expanding Federal Housing Administration ("FHA") lending and supporting policy reforms to the FHA program, including servicing standards.
EXPAND 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. Additionally, the Firm will continue to make data-driven policy recommendations aimed to preserve and increase the availability of and equitable access to affordable housing for renters.
GROW SMALL BUSINESSES
Plan to further expand access to credit through targeted adjustments to how the Firm evaluates credit applications and introduces new product offerings. The Firm plans to also hire additional senior business consultants and expand the free one-on-one coaching program to additional cities. The Firm plans to also expand the digital lending product more broadly and continue to promote policies that would improve access to capital.
IMPROVE FINANCIAL HEALTH AND ACCESS TO BANKING
Continue efforts to improve the financial health and resiliency of our customers and communities. The Firm plans to 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 and community events to reach more people across the country.
INVEST IN MDIS AND CDFIS
Each MDI and CDFI is onboarded as a client and connected to the Firm’s expertise, network and advisory support – including the Firm’s Advancing Black Pathways Fellows and Service Corps volunteers
To learn more about how JPMorgan Chase is helping advance racial equity, visit www.jpmorganchase/racialequity.