Saying it is making “significant business changes” to advance racial equity, Chase Bank on Thursday announced it will increase mortgage lending to Black and Latino families in Chicago by $600 million dollars over the next five years. Chase estimates that would be a 60% increase over current lending.
The effort is part of a nationwide commitment by Chase to direct $30 billion toward what the bank said are “the largest drivers of the racial wealth divide.” It plans to help promote home ownership, grow Black- and Latino-owned businesses, and improve access to banking in Black and Latino communities.
Chicago was the only city where the bank made a separate, targeted commitment.
The announcement comes after reporting by WBEZ and City Bureau showed that Chase has the most racially disparate lending record of any major bank in the city. From 2012 to 2018, Chase sent roughly 80% of its home purchase lending dollars to majority white communities in Chicago. Black neighborhoods got roughly 2% of Chase loan dollars and Latino neighborhoods about 5%.
Since the WBEZ report came out, a small but dedicated group of activists led by 25-year-old former mayoral candidate Ja’Mal Green has protested outside dozens of Chase bank branches in the city — including five just last week — shutting them down temporarily.
The activists often passed out flyers with “1.9%” printed on them — the percentage of home purchase lending dollars Chase invested in Black neighborhoods. Green called on Chase to make $1 billion in reparations to Chicago’s Black neighborhoods. That was a call reiterated by the leader of a respected community non-profit lender as well, Donna Clarke of Neighborhood Housing Services.
On Thursday, Chase executives acknowledged the role activism and advocacy around WBEZ’s reporting played in committing to lend more in the city’s Black and Latino neighborhoods.
“I’ll just be very blatant about it,” said Cerita Battles, Chase’s head of affordable lending, a new role she said is focused on increasing minority homeownership. “I think Ja’Mal [Green] and the city of Chicago brought something to our attention.
“I’m glad that they held us accountable to some of those things, and bringing certain things out around our lack of lending in the Chicago market,” said Battles, who spoke to WBEZ by telephone from her home in Jacksonville, Fla. “It was necessary for us to pay strict and close attention to the work that we were doing in the Chicago market.”
Top Chase executives have been meeting with nonprofit leaders and community lenders in the city. Those conversations also informed Chase’s commitment, Battles said.
Chase says it expects to give out 8,500 home purchase loans and $1.8 billion in mortgages for Black and Latino home buyers in Chicago in the next five years. That’s 3,000 more loans and $600 million more in lending than it would have expected to do, Battles said. To get there, the bank plans to:
Hire a team of community “lending advisors” who will be based at branches on the South and West Sides of the city. They will walk homebuyers through the entire home purchase process and will not work on commission.
Expand the use of Chase’s low down payment loan product.
Increase home buyer assistance grants to $5,000 and closing cost assistance to $3,000 for certain loans.
In addition, Chase says it is launching new programs to help Black- and Latino-owned small businesses. Entrepreneurs will get access to coaching, technical assistance and capital. Some 1,500 Black- and Latino-owned businesses will get mentors and digital education to help grow their business.
The bank will also undertake branch upgrades and marketing to try to expand access to banking in Chicago’s Black and Latino neighborhoods.
Battles said hitting the new lending goals will not be easy.
“It’s not going to be a layup for our organization to be able to do that,” she said. “We’re going to have to … get to work.”
WBEZ reporting showed that even in areas where Chase had a bank branch, that didn’t necessarily mean it was lending for home purchases in the community. In Chatham, a historically middle-class Black community on the South Side, Chase has two branches with $80 million in deposits. Yet it made just three home loans per year on average in the neighborhood across the seven-year period WBEZ examined.
Green called Chase’s announcement a “step in the right direction” but said, “We want oversight over how that money is distributed. And we want to really make sure we can hold them accountable to their word.”
“Chase is starting to listen,” Green said. “But these are drops in a bucket for them. Hopefully … they’ll start to be proactive about really doing what they should be doing in neighborhoods of color all throughout the country and changing their racist lending practices.”
Chase made its announcement about increasing lending in Chicago at the launch of “Together We Rise.” That’s a citywide initiative among philanthropies, business and government in the city to push for “an equitable recovery” from COVID-19. It’s focusing on Black and Latino communities and residents “historically left behind.”
Editor’s note: In the interest of full disclosure, JPMorgan Chase is a WBEZ underwriter.
Linda Lutton covers Chicago neighborhoods for WBEZ. Follow her @lindalutton.