Black banks say money pledged after George Floyd’s death is helping
After the death of George Floyd in May 2020, the CEOs of JPMorgan, Bank of America, Citi and others pledged more than $30 billion to black banks to make the US economy fairer for black Americans.
Two years later, Business Intern spoke to several black banks to see if these CEOs delivered on those promises.
The CEOs of five banks that primarily serve black customers and communities told Insider that cash is important to them. The money allowed black banks to acquire customers at faster rates, lend to more black-owned small businesses and entrepreneurs, service more mortgages for black families, and improve their technology and their operations in ways previously unimaginable.
However, Black Bank CEOs added that to start closing the racial wealth gap, Wall Street CEOs will need to keep their capital investments at their current pace. Dominik Mjartanthe CEO of Optus Banka South Carolina bank in which Wells Fargo and JPMorgan have invested said its bank was able to hire more staff, modernize its digital banking services and increase its loan size by $60 million dollars in 2020 to over $160 million today.
“We have been so starved of capital and resources for decades,” Mjartan said. “I’ve never seen anything like it, and it’s genuine and it’s real.”
In the aftermath of Floyd’s death and national and global protests for social justice, JPMorgan committed $30 billion, Citi committed $1.1 billion and Bank of America $1.25 billion. the commitments are not subsidies, but equity investments, which means that the banks will benefit from their commitments.
In addition to money from banks, black celebrities, corporations and organizations have also committed millions to help black small business owners and entrepreneurs access credit, technical assistance and advice on how to grow.
Jeannine Jacquesthe CEO of the Community Development Bankers Association said black-owned and black-serving banks and credit unions believe they are getting the attention and money they deserve after decades of underfunding.
Investments made by bank CEOs in 2020 have led to an increase in the number of black Americans in the banking system. It has also stopped thousands of black Americans from turning to payday loans and cash advances which carry exorbitant interest rates and are seen as predatory.