August 29, 2007
JPMorgan Chase Committed to Helping Low- and Moderate-income Communities
by Anne Moore Odell
Reporting in its third year, Chase is on target to invest $800 billion over ten years to benefit
low- and middle-income people and neighborhoods.
Since 2004, Chase has invested over $241 billion in low- and moderate-income families,
neighborhoods, and small businesses nationwide. Chase is the commercial banking arm of JPMorgan Chase & Co.
(ticker: JPM). Over the next seven
years, the bank plans to bring the total up to $800 billion, focusing on three key areas: community
development lending and investment, mortgage lending, and small business.
The $241 billion was lent largely over eighteen states.
Florida had the largest number of low- and middle -income mortgages with $2.305 billion in loans,
and New York followed close behind at $2.15 billion in Chase loans to families. There were over
$7.5 billion in loans to small businesses in New York between 2004-2006, and Texas small businesses
saw over $4.8 billion in loans by Chase during the same time frame.
generally has met our expectations, including reaching more than 30 percent of our goal in the
first three years," said Mark Willis, Community
Development Executive at JPMorgan Chase. The ten-year commitment has no special name, because
Chase sees lending and investment in low-and middle-income communities as part of its everyday
To date, Chase has invested $12 billion in community development lending and
investment, looking for organizations with experienced management, command of their markets, and a
track record of delivering community development impact. Beginning in 2004, Chase has loaned over
$440 million to certified Community Development Financial Institutions. National Community
Relations (NCR) is Chase's national community development office with headquarters in New York City
and with support staff all over the country.
One of the community-based organizations that
Chase has partnered with is NCB Capital
Impact, with offices in Arlington, VA, Oakland, CA, and New York, NY. Chase was one of the
first banks to commit to NCB Capital Impact's Charter School Capital Access Program (CCAP), a new
type of financing program focused on financing the development of charter schools serving
"As an early investor, JPMC brought the credibility of a large
financial institution to a relatively new kind of financing program. This credibility got the
attention of other large banks and brought them to the table," explained Jeff Brenner, Chief
Financial Officer for NCB Capital Impact, a non-profit corporation of National Consumer Cooperative
Bank (NCB). "CCAP closed with a $45 million financing commitment that included the largest banks in
Chase has made short and long term financing commitments to NCB Capital
Impact and its programs totaling nearly $60 million. One of the commitments provides financing that
is 2-3 percentage points below market rates. NCB Capital Impact uses this financing to fund loans
to nonprofit, community-based organizations that provide health care and education to low-income
children and families.
$40 billion has been made in small business lending by Chase over
the past three years. Small business customers with annual sales of less than $3 million are served
primarily through their local Chase bank branch as the national bank tries to meet small
businesses' financial needs locally.
So far Chase has invested $188 billion dollars in
mortgages to low-and middle-income families through three avenues: through Chase's bank branches,
through mortgage-only Chase offices, and through correspondent and broker relationships.
The Homeownership Preservation Office was launched by Chase in 2004 to partner with communities
to help homeowners met the obligations of their mortgages. The Office provides a hotline for
customers who are delinquent or at risk of foreclosure. It also holds workshops for non-profit
counselors on foreclosure-prevention. Finally, the Homeownership Preservation office donates or
sells properties at reduced prices in designated areas to community groups and non-profit housing
In light of the recent sub-prime mortgage scandal, at the end of July Chase
announced plans to simplify mortgage disclosures and product choices. Chase will require an
initial fixed rate for at least five years on adjustable-rate mortgages for non-prime borrowers. It
has also changed its guidelines to require borrowers to show their ability to handle increases in
CFED, a national
economic nonprofit, headquartered in Washington, D.C., considers JPMorgan Chase to be a valuable,
long-term partner in its work to expand economic opportunity for low-income communities. CFED
points to JPMorgan Chase's support of CFED's work to connect micro-enterprise to asset building by
linking microcredit to saving in Individual Development Accounts in an initiative called
"Integrating Saving and Credit."
"JPMorgan Chase's support of CFED's work in asset
building is a productive counterweight to the current mortgage foreclosure crisis," said Anne Li,
CFED Development Director. "Creating products and programs that help people build and preserve
equity is the best way to avoid over-borrowing that results in foreclosures and losing homes," she
Yet some question Chase's commitment to low income mortgage lending. Matthew Lee,
Executive Director of Inner City Press /
Fair Finance Watch studied conventional first-lien loans in 2005 from Chase banks in 14 states
and in founded that non-Latino African Americans were confined to higher cost loans over the rate
spread more often than non-Latino whites.
"In a study of the just-obtained 2006 mortgage
lending data, ICP & Fair Finance Watch found that JP Morgan Chase, 19.28% of whose 2006 mortgages
were sub-prime, was particularly disparate in the New Orleans MSA, [Metropolitan Statistical Areas]
where Chase confined African Americans to higher-cost loans 2.74 times more frequently than
whites," Lee said.
Yet Chase is proud of its commitment to help underserved populations in
the gulf region. "Soon after Katrina hit, we kept as many bank branches as possible open in
Louisiana and Texas, some of them seven days a week, to help our customers and the customers of
other banks," Willis told SocialFunds.com. "We opened a Small Business Recovery Center in Baton
Rouge to help displaced businesses. We reopened branches in New Orleans as quickly as possible,
often getting a trailer in place because traditional branches could not be reopened quickly
Chase's Willis concluded, "Our goal is to continue to be involved in the
neighborhoods we serve, as a lender and an investor, through our employee volunteers, as an
employer and through philanthropy."
In 1977 the federal Community Reinvestment Act (CRA),
was enacted. It required banks to meet the credit needs of their communities and not to exclude
low-and middle-income areas. JP Morgan Chase is pleased that all of its subsidiary banks have
"Outstanding" CRA ratings. As one of the largest banks in the US, with more than 3,000 branch
offices, Chase's disclosure of its loans and investments in low- and middle-income neighborhoods
shows that the bank is available to many Americans.
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