This Week in ESG and Impact Investing

From:  The Current State of Black Banking . August 12, 2016.  On April 28, 2003, several major US investment banks, including J.P. Morgan Chase (JPMC), were embroiled in aiding and abetting efforts to defraud investors, leading to a fine of $1.4 billion imposed by the SEC. Despite the severity of their fraudulent actions, the repercussions for these institutions seemed inadequate to deter future unethical practices. In 2012, the LIBOR scandal brought to light a series of deceitful maneuvers linked to the London Inter-bank Offered Rate. Banks unscrupulously manipulated interest rates to bolster their own profits or portray themselves as more creditworthy than they actually were. This scandal, involving approximately $350 trillion in derivatives, stands as an unparalleled financial scam in history. Unfortunately, the punishment meted out to the involved institutions did not seem to be a sufficient deterrent against future misconduct. These incidents serve as a backdrop for ex...

The sale, by the FDIC , of  First Republic Bank to JPMorgan Chase Bank highlights the strong support system in place for financial institutions, exemplified by the various liquidity and financing programs provided to non-Black banks. Since the beginning of the 2023 bank crisis, large banks have received a staggering $147 billion in financial assistance, showcasing the dedication of regulatory authorities to ensure the stability of the financial sector. This support has been vital in maintaining confidence in the banking system and averting a potential domino effect with far-reaching economic implications. However, it is crucial to acknowledge that the same level of support is not always extended to Black-owned financial institutions, emphasizing the need for regulatory authorities and policymakers to address this obvious disparity in access to resources. First Republic primarily catered to affluent clients, and, given racially based wealth and income disparities, the acquisition m...

According to a March 25, 2021 press release, "Greenwood, the digital banking platform for Black and Latino individuals and business owners..announced it has closed $40 million of Series A funding from six of the seven largest U.S. banks and the top two payment technology companies: Truist, Bank of America, PNC, JPMorgan Chase, Wells Fargo (Its still time to Clean House at Wells), Mastercard, and Visa."  The Greenwood online fintech platform (not a bank) officially opened its virtual doors for business on April 26, 2022.  The website notes that "Greenwood is not a bank. Banking services provided by Coastal Community Bank , Member FDIC. The Greenwood Debit Card is issued by Coastal Community Bank pursuant to a license by Mastercard International." It is significant to note that Coastal is not Black-owned, but they do have a significant social impact portfolio. We have no doubt that Greenwood attempted to enlist the aid of a Black bank, but, in addition to being small...

According to a press release, "Greenwood, the digital banking platform for Black and Latino individuals and business owners, today announced it has closed $40 million of Series A funding from six of the seven largest U.S. banks and the top two payment technology companies: Truist, Bank of America, PNC, JPMorgan Chase, Wells Fargo (Its still time to Clean House at Wells ) , Mastercard, and Visa." The investor group also includes the largest Hispanic bank in the US, Banco Popular. (Looks like the crisis has finally forced the realization that, as MLK noted , "we must 'live together as brothers or perish together as fools." ) FIS, TTV Capital, SoftBank Opportunity Fund, Lightspeed Venture Partners and All-Pro NFL running back Alvin Kamara were also listed as investors. For a startup to receive funding from six of the seven largest firms in its industry is significant. The key question is why and what will they do with this funding? Greenwood started out of the Bank...

  JPMorgan Chase announced a $30 billion “commitment” to address U.S. wealth inequality in Black and Latino communities. The pledge consists of actions, over five years, designed to increase the number of loans, investments, donations and grants the bank makes. The focus of the effort is housing, where the bank says it will lend an additional $14 billion dollars, finance the construction of 100,000 affordable rental units and issue $12 billion in mortgages. These efforts are meant to be supplemental, that is, the bank says these are loans and investments it would not otherwise make. Of course, problems with racial inequality in the U.S. have been magnified after the May 25 death of George Floyd, instigated by former members of the Minneapolis, MN police department. The incident sparked weeks of protests across the globe. In addition, the COVID pandemic exposed gaps in health care access. The Black community has experienced far higher Covid-19 mortality than in the overall populatio...

Fiscal Forum: “The Political Economy of High Debt” IMF, April 19, 2015. L to R: David Wessel, Maria Luís Albuquerque, Christine Lagarde, Helen Clark, Joaquim Levy. I was at the IMF yesterday with a bunch of rich white people ( @ Lagarde @ HelenClarkUNDP   @ davidmwessel ) when the subject of poor people came up. Of course, as they do with Black people, rich white people claim to know everything there is to know about the poor. I think their main fear is that poor people will want the same deal that Goldman Sachs got, or the deal JP Morgan got, or the deal the " London Whale " or the LIBOR manipulators got. This fear is borne of a certain selfishness and greed. It is, also, completely wrong, so I took the time to tell them what I think. Here is what we want: 1. Water. Not privatized water systems. Access to clean water. 2. Food. Not GMO degraded, just clean food. 3. Shelter. Not subprime loans, but shelter. 4. Peace. Not the opportunit...

Summary version from The American Banker Newspaper. Wednesday, May 19, 2010. Story by Robert Barba. Sources said early Tuesday that the struggling $2.3 billion-asset lender had secured $140 million in capital commitments, well exceeding the $125 million it needed to become eligible for a $75 million investment from the Treasury Department. Though most of the companies on the roster have been solid supporters of community development financial institutions, Goldman Sachs Group Inc. and General Electric Co.'s GE Capital were two newcomers. They also were among the biggest investors in the group, kicking in $25 million and $20 million, respectively. Another headline investor in ShoreBank is Citigroup Inc., at $20 million. Others include Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., U.S. Bancorp, Morgan Stanley, Northern Trust Corp. and PNC Financial Services Group Inc. Also on board were State Farm, the Ford Foundation and the John D. and Catherine T. MacArth...

1. Topic: TARP Accountability: Use of Federal Assistance by the First TARP Recipients 2. Date and Time: Feb 11, 2009, 10:00 am – 1:00 pm 3. Place: 2128 and 2172 Rayburn House Office Building 4. Chairman: Mr. Barney Frank, Chairman of the House Financial Services Committee 5. Witness List: Mr. Lloyd C. Blankfein, Chief Executive Officer and Chairman, Goldman Sachs and Co. Mr. James Dimon, Chief Executive Officer, JPMorgan Chase and Co. Mr. Robert P. Kelly, Chairman and Chief Executive Officer, Bank of New York Mellon Mr. Ken Lewis, Chairman and Chief Executive Officer, Bank of America Mr. Ronald E. Logue, Chairman and Chief Executive Officer, State Street Corporation Mr. John J. Mack, Chairman and Chief Executive Officer, Morgan Stanley Mr. Vikram Pandit, Chief Executive Officer, Citigroup Mr. John Stumpf, President and Chief Executive Officer, Wells Fargo and Co. Eight bank CEOs from companies receiving the first TARP funds testified before the House Financial Services Committee. All t...