JPMorgan and Bank of America, the two top U.S. banks by assets, increased their investment commitments by a total of $600 million in the first quarter of the year, targeting minority-owned underserved retail customers and small businesses.
This amount follows their initial pledges announced in the second half of 2020, as the havoc created by the COVID-19 crisis deepened the racial wealth gap in the country.
In February, JPMorgan announced a new round of $350 million to expand access to financing for Black, Latinx, women-owned and other underserved small businesses.
More than 40% of the five-year commitment would mix low-cost loans and equity investments, and the remaining would be put towards philanthropy efforts, according to a press release.
Part of that amount, $42.5 million, will go to its Entrepreneurs of Color Fund to expand it to more U.S. cities. The fund was launched in 2015 in Detroit with the goal of providing low-cost loans and advisory services to Black- and Latinx-owned small businesses. It has supported more than 300 small businesses between 2015 and 2018, and it’s available in Chicago, San Francisco, the South Bronx and Greater Washington region (D.C.).
Jamie Dimon, Chairman and CEO of JPMorgan, has been vocal about the urgency of the corporate sector to play a more relevant role in tackling social issues. In October of 2020, the bank pledged a five-year $30-billion investment program to boost homeownership, consumer banking and financing to small business in Black and Latinx communities.
Similarly, at the end of March in 2021, Bank of America announced it will pledge an additional $250 million to its $1-billion commitment launched in June 2020, all of which will be rolled out in the next five years.
The funds aim to expand access to capital to communities of color, including those of Asian descent, in four different areas: health, jobs and reskilling, small businesses and homeownership.
The move came a few days after March 16, when three shootings took place in different spas in Atlanta, leaving eight dead, six of them women of Asian descent. The killings were preceded by a rising number of hate crimes reported against Asian-Americans in the context of the pandemic.
“The urgency we feel to address long-standing issues of inclusion and racial inequality has only increased following the attacks and hate speech directed at Asian people over the last year,” Bank of America Chairman and CEO Brian Moynihan, said in a press release.
During the second half of 2020, following the George Floyd protests and the deepening of the pandemic, financial entities such as Citi, Wells Fargo, Goldman Sachs, Morgan Stanley and PayPal committed specific funding to support small businesses and consumers in communities of color affected by the pandemic.