Why it matters: "JPMorgan essentially is setting an example of what to do," Andre Perry, a fellow at the Brookings Institution, told Axios.
- JPMorgan is the country's largest bank but more importantly CEO Jamie Dimon leads the Business Roundtable, a group of nearly 200 CEOs at America's largest corporations, Perry said.
- "If a fraction of the members of the Business Roundtable follow suit then you're talking about a more concrete effort than anything we've seen before."
Details: JPMorgan has earmarked $14 billion for new housing loans to Black and Latino borrowers plus...
- $8 billion to increase affordable housing and homeownership in underserved communities.
- $4 billion for mortgage refinancing.
- $2 billion for small business lending.
- $2 billion in philanthropic capital.
The bank also committed to increased hiring and investment in existing employees "to build a more equitable and representative workforce and hold executives accountable" as well as $50 million of deposits in minority-owned financial institutions.
- All of the programs are designed to drive "an inclusive economic recovery and support Black, Latinx and other underserved communities," the bank said.
Say it with your chest: "Systemic racism is a tragic part of America’s history," Dimon said in a statement.
- "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. It's long past time that society addresses racial inequities in a more tangible, meaningful way.”
The big picture: The 100 largest American companies already had committed $3.33 billion since the death of George Floyd at the hands of Minneapolis police in May, which was the largest sum in history toward fighting racism and closing the racial wealth gap.
- JPMorgan increased that number tenfold with its announcement, bringing the total to $33.54 billion.
- The three largest contributors are all banks, with Citigroup and Bank of America also having committed to each provide more than $1 billion to the cause.
Capital One this week launched a similar program with a $200 million, five-year commitment on top of the $10 million it pledged in June.
- AT&T similarly announced a $10 million pledge to "Black and underserved communities" in addition to the $500,000 it committed in June.
What's next: "Certainly there is a precedent that’s being set," Dana Peterson, chief economist at the Conference Board, tells Axios.
- "If you’re a corporation or especially a financial institution money is the easiest thing. But the hard thing is implementation, making sure that you’re actually having an effect. The execution is going to be very important."
By the numbers: JPMorgan's commitment amounts to about 16% of its 2019 profits for the next five years. The top 10 companies excluding JPMorgan committed an average of less than 2% of their 2019 profits.
- The other 48 companies committed around 0.1% of 2019 profits.
