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JPMorgan pledges $30 billion to boost diversity for Blacks, Hispanics

JPMorgan Chase announced a five-year, $30 billion initiative to tackle racial inequality within Black and Hispanic communities. Yahoo Finance’s Kristin Myers joins Zack Guzman to discuss.

Video Transcript

ZACK GUZMAN: Have been discussing here in 2020 there have been noted discrepancies in terms of communities impacted by the coronavirus pandemic. Not just in deaths or unemployment tied to the pandemic, but also, we've been seeing these trends happen even before the pandemic hit in terms of home ownership and different homeownership rates across different communities of color.

It's been a problem. A lot of people have been talking about it. But now JP Morgan is coming out and putting money where their mouth is on the issue. I want to get to Yahoo Finance's Kristin Myers, who has what exactly they're planning to do to solve the problem. Kristin.

KRISTIN MYERS: Hey, Zack. Yeah, so JPMorgan Chase has decided that they're going to be spending tens of billions of dollars to tackle racial and equity inside the country. To be specific, $30 billion, Zack, is the money that the bank says that they're going to be spending over the next four years as a part of their commitment to essentially improve racial equity inside this country.

Now this does, of course, as we had discussed last week, come after the news that Citibank would be spending $1 billion to tackle racial equity. You and I had chatted about this. That came after a report from Citi showed that systemic racism in the United States cost $16 trillion.

So, to their part, the banks have decided that they're going to focus on housing, lending programs for small businesses, and more to intentionally improve the economic and financial prosperity of Black and Hispanic households.

I want to run through the plan quickly right now. JP Morgan's plan, the lion's share of that $30 billion is going to be focused on housing, spending about roughly $25 billion to increase Black and Hispanic home ownership. They're going to be spending $8 billion to create 40,000 loans for Black and Hispanic households to purchase homes.

$4 billion will be used to help them lower their mortgage payments. That's for refinancing loans. And another $14 billion will actually be used for rentals to help finance affordable rental units.

Secondly, they hope to increase Black and Hispanic-owned businesses, spending roughly $3 billion on small business loans for 15,000 businesses in Black and Hispanic communities-- excuse me. And $750 million of that roughly $3 billion will be spent already on existing Black and Hispanic businesses.

So the bank says they are going to actually start to really spend on suppliers that they already use. So they're making a commitment there on that.

Thirdly, they hope to increase minority access to financial services. This is something that we've talked about before. Minority communities are frequently underserved and lack equitable access to financial services. So they hope to open 1 million low cost checking and savings accounts and open new branches.

And lastly, Zack, talking to the banks, they say that within their own ranks, they are creating an accountability framework to essentially boost diversity, not just of the regular rank and file employees, but also among the senior executives at the bank, Zack.

ZACK GUZMAN: Yeah, it's an important problem to address here. And also, I just want to highlight the fact that you have been talking a lot about these social issues here in our own special here on Yahoo Finance. And Kristin's going to be doing so again today.

"2020, A Time for Change" will be airing here at 4:30 PM Eastern time right here on Yahoo Finance. She'll be speaking with filmmaker Ava DuVernay later on today. You will not want to miss that.