JPMorgan Chase commits $30B to advance racial equity.

Let’s break this down.

$8B promised to come in the form of home purchase loans. That would increase wealth held by Black households by 00.17%.

The share of wealth Black households hold in the U.S. would remain…unchanged

Source for the graphs: https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#quarter:123;series:Net%20worth;demographic:race;population:1,3,5,7;units:levels

But that’s a bit unfair.

You can’t expect one bank to close the racial wealth gap by itself, even if that bank has $2.6 trillion in assets.

So let’s drill down to see the $30 billion in the context of just JPMorgan Chase.

And a reminder, that’s $30B mostly in loans and investments. While there are some philanthropic grants in that total, it’s mostly interest-bearing loans and investments that JPMorgan Chase is obligated to make anyway under the Community Reinvestment Act. https://nextcity.org/daily/entry/fed-wants-push-reset-button-on-community-reinvestment-regulation-update

Anywho, it’s $30B over five years.

So in addition to $1.6B/year in home purchase loans, the bank is promising $400M/year in small business loans & some other investments, and some other investments totaling $6B a year.

What is $6B a year in the context of JPMorgan Chase?

Like all big banks today, JPMorgan Chase provides loans that come out of its commercial banking side & underwrites debt from corporations & cities on its investment banking side. All told, Chase provided $2.3 trillion in financing for its clients in 2019.

That’s from JPMorgan Chase’s 2019 annual report: https://www.jpmorganchase.com/corporate/investor-relations/document/annualreport-2019.pdf

So it’s fair to ask, what is $6B/year for racial equity in the context of Chase’s annual $2.3 TRILLION in financing.

The answer is 0.26%.

Chase is promising to allocate 0.26% of the business it does on an annual basis to closing the racial wealth gap. For the next five years.

Put another way, for every dollar in loans & underwriting JPMorgan Chase loans or invests under its racial equity banner, it’s doing $385 dollars in loans or investments with zero racial equity factors taken into account.

As I and many others have reported, in this country, when you don’t take past generations of racial inequity into account, you end up reproducing or perpetuating that racial inequity for subsequent generations. https://nextcity.org/features/view/breaking-through-and-breaking-down-the-delmar-divide-in-st.-louis

So you can have some good stories that come out of the $1 dollar for racial equity, but this pandemic, the growth of Black Lives Matter these past few months, have shown that the focus now needs to be on that $385 and what is happening or should be happening with that.