The Color of Money: A Top Bank and Nonprofit Take Aim at the Racial Wealth Divide
Thursday, February 11, 2016
We started writing about the Corporation for Enterprise Development a year ago, when we talked to its founder, Bob Friedman, about how the organization got its start, and where it is going with addressing asset-building and financial inclusion for low income Americans and people of color. Now, CFED has announced a new partnership with JPMorgan Chase & Co. to bring asset building initiatives to multiple cities across the country, starting with New Orleans and Miami this spring.
The idea here is that JPMorgan Chase will be investing $2 million dollars in developing leadership in local nonprofit organizations, in order to address racial and financial equity issues.
This grant is significant, not just because it’s a sizeable chunk of money that the bank is laying out, but because of the explicit racial framing of the effort. While the community of asset building nonprofits and experts has long highlighted America’s alarming racial wealth gap, such talk is less common in the financial services sector. In fact, that sector has been strongly criticized since the 2008 financial crisis for helping widen the racial wealth gap through predatory lending practices that stripped wealth out of communities of color.
JPMorgan Chase itself was sued by the City of Los Angeles in 2014 for “a continuous pattern and practice of mortgage discrimination” that led to borrowers of color paying higher interest rates than they should have.