A billion dollars. That’s how much the leader of a respected Chicago nonprofit says JPMorgan Chase Bank needs to invest in the city’s Black and Latino neighborhoods to make up for gaping racial disparities in lending documented recently by WBEZ and City Bureau.
“Give us a billion dollars,” said Donna Clarke, interim president and chief operating officer of Neighborhood Housing Services of Chicago.
Clarke wants Chase to channel the $1 billion to Chicago’s Black and Latino neighborhoods. She suggested three-quarters of the investment come in the form of home loans and small business loans, with the rest being used for things like major home repairs or down-payment assistance.
The WBEZ/City Bureau investigation showed that from 2012 to 2018, less than 2% of Chase’s home purchase lending in Chicago went to Black neighborhoods and just under 5% went to Latino neighborhoods, compared with 80% — $6 billion — that went to white neighborhoods.
“The social contract has been broken … between the banks and the community,” Clarke said. “And they’ve somehow got to regain the trust of the community. To me, making that billion dollar investment within the community is one way to start to rebuild the trust. ”
Chase loaned nine times more in one white North Side community — Lake View — than it did in all the city’s majority-Black neighborhoods combined.
“I was completely offended by that,” said Clarke, who is African American. “I drive through communities, north and south, and … you see the stark difference that investment makes.”
NHS Chicago is a highly respected, 45-year-old nonprofit group with a lending arm that makes home loans itself — it has lent $644 million over the past 30 years to Chicagoans looking to buy, fix or keep their homes, nearly all in Black and Latino neighborhoods.
Clarke said she does not intend to single out Chase — other major banks should give a billion dollars, too. “To all of those big banks, … shame on you,” said Clarke. “They need to do something substantial.”
Clarke’s ask from Chase is a bold move. Like many nonprofits in Chicago, Neighborhood Housing Services gets money and support from Chase. A Chase vice president sits on the NHS board.
Clarke points to the moment that Chicago and the nation are presently in. “This is a time to speak up, this is a time to have these uncomfortable conversations,” said Clarke.
Clarke said if Chase wants to change its lending patterns, the bank is going to have to value Black and Latino people and their neighborhoods in a way it hasn’t up to now.
Chase has said it wants to improve its lending in Black and Latino neighborhoods.
A spokesman said the bank has invested nearly $1 billion over the last decade to create and preserve affordable housing in Chicago, and is in “meaningful and collaborative conversations” with community leaders that will inform the approach to further investing on the South and West sides.
Chase consults nonprofits on how to fix lending disparities
Last week, Chase convened a two-hour video call with top executives from the bank — including its CEO of home lending, managing director of corporate responsibility and executive director of community reinvestment strategy — and a who’s who of Chicago nonprofit leaders working on affordable housing, home ownership and community development.
Clarke participated in the meeting but would not talk to WBEZ about the call, citing a request by Chase to keep it confidential. She said she did not make the $1 billion demand on the call, but it’s something NHS staff have been discussing since the WBEZ/City Bureau investigation was published in early June.
“I want the Black communities in Chicago to be getting as fair a shot as the folks that are sitting on the North Side,” said Clarke.
WBEZ spoke to a half dozen nonprofit leaders who were on the Chase call. While it was supposed to be private, activist Ja’Mal Green live-streamed part of the call to Facebook, where thousands have viewed it. Green has held numerous protests at Chase Bank branches around the city to demand reparations from Chase for its disparate lending.
Sources said Chase began the call by presenting lending products and proposed adjustments, and then asked for feedback and other ideas from the nonprofit leaders.
“Most of what you just shared is really about individual products and loans,” Sylvia Puente, executive director of the Latino Policy Forum, can be heard saying on the live-streamed portion of the call. “And I think that there is a broader systemic issue here that also needs to be addressed. … My question for Chase is: What is your process of internal reflection on how this situation came to be, and what are the systemic solutions to how it’s going to be addressed? Because product by product is only going to create incremental change. It’s not going to create the systemic change that’s required.”
Others were also looking for remedies that went far beyond what Chase proposed.
James Rudyk, executive director of the Northwest Side Housing Center, said his hope for Chase going into the call was, “do something different. Think outside the box. And none of the suggestions were that.”
“It was business as usual that hasn’t worked,” at least not for Black and Latino neighborhoods, said Rudyk.
“Maybe … if this happened five or 10 years ago, we would have applauded them for increasing the down payment assistance or for a new program,” said Rudyk. “But we’re in a different time. We’re in a different moment. We’re in a civil rights movement that is not accepting the status quo. And [the meeting] felt like the status quo.”
A truly structural shift, Rudyk said, would be for Chase to flip its lending record — and invest 80% of its loan dollars in Black and Latino areas, instead of the current 7%.
In addition to the Latino Policy Forum, Neighborhood Housing Services, Northwest Side Housing Center, and Ja’Mal Green’s Majostee Marketing, the call included directors from Austin Coming Together, the Chicago Community Loan Fund, Housing Action Illinois, Lawndale Christian Development Corporation, Metropolitan Planning Council, Southwest Organizing Project, Spanish Coalition for Housing, The Resurrection Project, the Urban League and the Woodstock Institute.
Chase declined to talk about the proposals it laid out on the call, saying this was the beginning of a process and the first of a number of meetings with community groups.
“We appreciate the engagement of our community partners to help identify meaningful and collaborative change on the South and West sides of Chicago,” the bank wrote in an emailed statement. “This is part of an ongoing series of meetings to collectively develop solutions to lift up these communities.”
Previously, Chase Bank has touted its investments in affordable housing and a recent doubling of down payment assistance to South and West side borrowers, from $2,500 to $5,000. The bank has also highlighted a private loan product meant to compete with FHA loans.
In a follow-up interview, Puente said nonprofit leaders on the call were “frank” and “candid,” despite the fact that many of the groups, including hers, receive charitable funding and other assistance from Chase. One nonprofit leader, who asked to remain anonymous, said the call highlighted an “unequal power relationship between people who have money and people who need it.”
For his part, Green stormed off the call after telling Chase executives he was “utterly disgusted” with the meeting, which he called a “smokescreen” because it addressed neither reparations nor structural racism inherent in Chase’s lending.
“This is serious,” he told Chase executives on the call. “Kids are dying in these streets every single day. And it’s because you’re not allowing us to create generational wealth, because folks are not able to create opportunities for these young people. … You guys are not making up for what you’ve done.”
Green has been calling for reparations from Chase for a month. He wants $1 billion in grants and $10 billion in loans for Chicago’s Black neighborhoods. In the days following the call, Green’s protest activity resulted in Chase temporarily shutting down seven branches. Late Thursday, the bank barred Green from its property, saying his protests threatened the safety of employees and customers.
Linda Lutton covers Chicago neighborhoods for WBEZ. Follow her @lindalutton.