JPMorgan Puts $30B Toward Fixing Banking’s ‘Systemic Racism’
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Earlier by Steve Sailer: Financial Racism: A Concept Promoted By People Who Want To Make Money Off Lending To Blacks

From the Associated Press:

JPMorgan puts $30B toward fixing banking’s ‘systemic racism’


CHARLOTTE, N.C. (AP) — JPMorgan Chase said Thursday it will extend billions in loans to Black and Latino homebuyers and small business owners in an expanded effort toward fixing what the bank calls “systemic racism” in the country’s economic system.

The New York bank said it is committing $30 billion over the next five years toward programs that include earmarking more money for getting Black and Latino families into homeownership and providing additional financing to build affordable rental housing units.

“Systemic racism is a tragic part of America’s history,” said JPMorgan Chase CEO Jamie Dimon in a statement. “We can do more and do better to break down systems that have propagated racism and widespread economic inequality.”

In the immediate aftermath of the police killing of George Floyd, JPMorgan announced a commitment of $1.75 billion toward programs they said would help address racial inequalities. But since then, as protests have remained constant in some urban centers, there has been a push for banks to do more. …

JPMorgan, which has $3.2 trillion in assets, said it expects the $30 billion to help finance 40,000 additional mortgages for Black and Latino households, another 20,000 loans that will refinance mortgages and help construct 100,000 affordable rental units. Additional funds will go to finance 15,000 small business loans to Black and Latino-owned businesses. …

American banking still has a long way to go to fix the problems of the past. Banks large and small are still regularly cited for discriminatory practices, including allegations of “redlining” Black homebuyers. Redlining is a practice in which banks deny or avoid providing credit services to consumers because of racial demographics or the neighborhood where they live.

Ed Golding, the executive director of the MIT Golub Center for Finance Policy, said JPMorgan’s investment is impressive but narrowing the gap requires more fundamental changes to the financial system. He noted that there’s a 30% gap between Black and white homeownership, amounting to about 4.5 million households. JPMorgan’s investment would go to a fraction of those.

“We are not going to do it overnight,” said Golding, who served as the head of the Federal Housing Administration under the Obama administration. “I applaud the energy and the direction but it’s going to take massive government policy changes to really move the needle and make up for hundreds of years of systemic racism.”

According to a recent study that Golding co-authored, African Americans on average pay higher mortgage interest payments, insurance premiums and property taxes than white families, adding an average of $67,320 to their homeownership costs. The study said Black families are disadvantaged by a risk-based pricing system, which charges higher mortgage rates for lower down payments and credit scores. Golding called for a system that would pool risk among borrowers.

What the Diversity Inclusion Equity movement wants most is the equity you’ve built up in your home.

By the standards of the Bush Push for Increasing Minority Homeownership, $30 billion is small change. In January 2005 Angelo Mozilo announced that Countrywide Financial was devoting one trillion dollars to mortgages for minorities and lower income borrowers by 2010.

Interestingly, Bush and Mozilo were more focused on lending more money to Hispanics than to blacks. Mexicans were the new kids in town back then, so it was easier to imagine that they’d pay back the massive mortgages needed to buy even crummy houses in immigrant dense California, Arizona, Nevada, and Florida. In contrast, blacks didn’t need huge loans to buy into black neighborhoods in places like Detroit. Moreover, lots of lenders back in 2005 could recall being burned on lending to black neighborhoods in previous frenzies to prove the old redliners were WRONG.

But now it’s 2020, and nobody can remember nothing except FDR’s redlining and Emmett Till.

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