Predatory lending has been devastating for low-income Americans, and some of the biggest banks in the U.S. have been involved in this practice in one way or another, either through their mortgage units or by capitalizing street-level lenders. JPMorgan Chase is one of the banks that's been accused of such bad behavior in the past, including by the City of Los Angeles, which sued the bank last year for steering minority homeowners into risky loans that led to foreclosure.
But lately, JPMorgan Chase has been backing some important and innovative efforts aimed at helping low-income working Americans build financial security—in addition to the bank's ambitious giving for workforce development that we've reported on often. Penance? Maybe, but some of these grants are pretty impressive.
Recently, JPMorgan Chase awarded $1 million to the Financial Clinic, a New York-based nonprofit focused on financial inclusion. This new grant money will help build financial security and improve workforce outcomes for jobseekers in the greater New York City area via the Clinic’s financial security ecosystem model. It will also address financial insecurity through its web-based financial coaching platform called Change Machine in social service organizations in Dallas and Fort Worth, Texas.
Change Machine is a nationwide social enterprise, and some of the money will also grow its overall network of partners and its plan to implement future financial security ecosystems. The Financial Clinic recently announced some new plans based on the findings of a national study, the “Financial Education Program Evaluation Support Services Study” led by the Urban Institute and funded by the Consumer Financial Protection Bureau. The results proved that financial coaching programs make measurable differences in helping clients improve their credit, reduce debt, increase savings, and take financial control of their lives.
“Research has shown that consumers benefit most from having the right financial information and tools at the right time,” said Colleen Briggs, the vice president for financial capability initiatives, JPMorgan Chase. “We are proud to support The Financial Clinic and their work to meet families where they are with valuable financial coaching."
We've previously written about some of JPMorgan Chase's other grantmaking aimed at bolstering financial security for low-income Americans. Earlier this year, for example, the bank committed $3 million to the Center for Financial Services Innovation (CFSI) to fund new financial products that will help households with tight budgets manage their finances.
CFSI is an interesting outfit that is hot on the trail of innovative ways to rescue the poor from check-cashing shops and other predatory outfits, bringing them into the mainstream banking system with low-cost products and services that are appropriate to their needs. It contends that there are profitable ways to responsibly serve the financial needs of low-income Americans, and it's intent on developing that market. CFSI group has also wrangled the support of other banks, as well as the Ford Foundation, the MetLife Foundation, and other funders.
JP Morgan Chase also gave $30 million to the Financial Solutions Lab, which is managed by CFSI, in 2014 to identify, test and scale innovations that help people increase savings, improve credit, and build assets.
Overall, these are the top three goals of the bank’s grantmaking in an area that it calls financial capability:
- To support outcome-based financial coaching.
- To help develop, scale and promote the usage of high-quality, technology-enabled financial products and services designed for the target population.
- To strengthen nonprofit infrastructure through technology and evaluation systems.