CEO of the one of the largest banks in the world, Jamie Dimon, speaks to us about the firm’s commitment to diversity, the opportunities for midsize businesses and more.
JP Morgan Chase pledged $30 billion towards supporting minority communities. In your view, has this pledge been effective? And what other opportunities exist?
It’s been hugely effective. After the murder of George Floyd, a lot of companies already did things. JP Morgan Chase has always been doing things to try to advance racial equity years before. Some worked and some didn’t work. But I would say that we started Advancing Black Pathways before that, which is both inside and outside of that advancing black leaders, entrepreneurs of color, hiring veterans, minority, Hispanic, white veterans, affordable housing. But after the murder of George Floyd, we had this $30 billion racial equity commitment, which is an enormous amount. But it’s also very specific. $12 billion of affordable housing, $8 billion of mortgages, community branches, financial education, entrepreneurs of color fund, things that we do in purchasing, diverse vendors. We spend, I think, almost $800 million with minority vendors, $2 billion with a total if you include disabled, veterans and women and all that, and it works. And we’ve basically met the commitment.
But what really happens, these are really big numbers, but it’s a mortgage loan officer in that part of town. It’s a community branch in that part of town. Those community branches hire locally. When they get built or rehabbed, we use local contractors. We have events there. We use local food. They’re maintained by local systems companies and others like that. And it will become a permanent program soon as opposed to a five-year commitment. And it will be that number with more growing over time.
But I would tell you, and very important to understand, the government needs to do other things too. You can have every company in the world doing this, it won’t make up for shortcomings of inner city schools, the earned income tax credit, child care, all these other things. Those are really important if you really want to lift up all these communities.
In the report in partnership with Next Street, the numbers speak for themselves, with 300,000 mid-sized businesses across the US that generate $13 trillion in annual revenue and employ more than 40 million people. How can we ensure more diverse companies are represented in this segment?
You have to keep in mind, the world is symbiotic. Those companies, a lot of them exist to serve big companies. So it’s not like they exist on their own. But what we’re doing is very special programs to lend, support women, minority, veteran businesses. We purchase from them, which I think if you ask them, they tell you it might be even the bigger thing. They give them a chance to be a vendor to a J.P. Morgan Chase & Co. Because when they become a vendor, it means they’ve been through a process. Very often, when they’ve been through that process other people just take them on. They don’t worry about due diligence or something like that. And then we started something – the Entrepreneur of Color Fund, which I think has been so far hugely successful. It’s one thing to lend money, some money, but what a lot of people need is advice. So we started small business consultants. I learned this from a community development fund – The guy, they [business owners] were telling me, “that guy, he helped us more. He helped us find leases, and negotiate terms, and how to hire people, and how to find the second location for a restaurant,” all these various things. But it’s doable. It’s working. It’s hard. It’s taken a long time.
Your tenure is historic, and your name will go down in the books, as far as the financial industry is concerned. What does legacy look like for you?
So when I took over Bank One, a former CEO came to see me and said, you’ve got to make a name for yourself, and leave the legacy behind, and he was a little guy, and I said to him, what do you mean? And he said, you’ve got to make a name. You’ve got to do something special, maybe you should take Bank One International. I said, Bob, we’re doing a [terrible] job in the United States of America. What gives us the right to try to attack overseas? When we’re doing a good job here, then we’ll think about international. I told him how hard it was. And when he was walking out, I said, by the way, if I ever do international, it’ll be big, and four years later, when we merged with J.P. Morgan Chase & Co, I called him up and said, “That’s what I mean!”
But the only legacy is knowing you’ve built a better place and left a better world. Not whether you did one innovative thing, or eight innovative things, or started a thing? No, you leave behind a healthy, vibrant, strong company of people of character, where you’re trusting your communities. You’ve done a good job for shareholders. You’ve done a great job for your employees. You’ve done a great job for all the companies and people you work with. That’s all I want. And on my gravestone, you can just say we’re going to miss this SOB.
Jamie, the Indianapolis Recorder and Recorder Media Group work with JPMorgan Chase’s Regional Communications team through the Multicultural Media Project. Each month, we publish your sponsored content that focuses on financial health and literacy . I’m curious to hear from you about the why behind this program – why is it important for the firm to invest in local journalists, especially those publications like ours with a diverse audience.
So we’ve been doing this for a long time. But when I went to our community branch in Harlem, Crenshaw, LA, South Side of Chicago, opening one in Brooklyn and Bronx soon and when I went to the one in Harlem, I was interviewed by two newspapers… You don’t really realize that these papers are really embedded in their communities. Believe it or not, they write better than some of these other people. They actually write the story with some facts and detail. It’s a wonderful thing that you get because they’re there. They watch our branch in Harlem. It wasn’t me trying to sell them what’s going on in the branch, they saw what’s going on in the branch. They saw that these community managers are bringing in the local religious institutions and small businesses. …And they were having fun and the art was done by local people. The one I went to in Harlem had someone draw a picture of me and put it up there. So as we work with you guys, we get better at it. And you get better at working with us. We want to reach out to your community and we’re not going to stop doing that. So that’s why. And we’re big supporters of the media in general, even though we complain about it, just like a lot of the people. You’re probably going to get it wrong.
What is the Future of FinTech and Banking partnerships as some of the regulators have seemed to be scrutinizing it a little more because it’s an emerging field. And then part two of that, what do you see as the future of cash?
Banks are big tech companies. We have 55,000 people in technology. We run 6,000 applications. We partner with hundreds of other companies in cyber and FinTech and core systems that you wouldn’t necessarily know about. So it’s both. And then a lot of these FinTech companies won’t make it and a lot of them are quite good. And they’ve done a very good job, like Stripe and PayPal. Apple, I put that in the category as kind of a new emerging thing. One thing I pointed out before about fair and unfair competition, we have social obligations, FDIC obligations, insurance obligations, reporting obligations,capital obligations, stress test obligations. And some of these other people have none. I mean, that’s why some of the banks could be valuable to the FinTechs, is that you’ve got the things that maybe they need. Yes, and vice versa. Some of them are quite good at things they do, but we have absolutely no doubt we can compete with just about anybody. To the second part of that question cash is coming down and your debit cards and credit cards are going way up. They’re both fabulous products. A debit card is, for a consumer, you don’t have to carry around cash, you don’t have to get cash, it’s not risky. You can go anywhere with it, it’s great for retailers. Even though they complain because when they have to process cash, it costs them a lot of money, insurance, defalcation, the register machines, they have to drop the cash off at a bank, they have to sometimes have guards. It causes huge issues… But one day, your finger or your eyeball will be like a debit card or credit card. It’s the same thing. It’ll just be identified, and so more and more payments will become non-cash. But people always use some cash, at least in America. Old habits die hard.
President & CEO of the Recorder Media Group, Robert Shegog, was part of a reception where Jamie Dimon shared insight into the bank’s goals and successes. He remarked, “The impact that J.P. Morgan Chase & Co is making on the community and the focus on overall economic impact gives confidence that the underrepresented are being considered and given the opportunity to not only grow their personal financial health but deepen the sustainability and growth of their businesses.”
