America's largest bank, JPMorgan Chase & Co (NYSE:JPM) has committed to extend $30 billion in additional loans to Black and Latino home buyers and small-business owners, in a move to address the nation's racial wealth gap, reports the Wall Street Journal.
What Happened: JPMorgan joins the growing list of companies that have pledged to donate or commit funds to address racial inequality and improve diversity hiring practices.
JPMorgan, along with other U.S. banks have faced criticism over the years about the treatment of Black employees and customers, reports the WSJ.
In 2017, the James Dimon led bank paid $55 million penalty to settle allegations that its independent brokers charged some Black and Hispanic borrowers higher mortgage rates.
In other measures, the bank set aside $4.5 million to recruit and mentor Black employees and provide antibias training.
"Systemic racism is a tragic part of America’s history. We can do more and do better to break down systems that have propagated racism and widespread economic inequality," said Chief Executive Officer James Dimon.
Off the amount, $8 billion will go toward funding an additional 40,000 mortgages to Black and Latino home buyers, $14 billion for financing 100,000 affordable rental units and approximately $2 billion will be devoted to small businesses in majority Black and Latino communities.
Why It's Important: Amid the national outcry after George Floyd's killing, several business leaders have announced new initiatives to support diversity.
In fact, many initiatives came under U.S. Labor Department's scanner and Microsoft Corporation (NASDAQ:MSFT) and Wells Fargo & Co (NYSE:WFC) were sent notices to prove that their actions followed U.S. employment laws.
This move is yet another attempt by the bank to raise its commitment towards social initiatives. Recently, JPMorgan realigned its lending initiatives to follow the Paris Accord.