After George Floyd's murder, Wall Street promised billions of dollars to help Black Americans. 2 years later, here's where that money went and how it's being used.

• After George Floyd's murder, America's biggest banks made promises to Black Americans.
• CEOs of Black-owned or Black-serving banks have been able to make substantial progress.

As Dominik Mjartan approached JPMorgan's towering global headquarters on New York City's Park Avenue on a Friday afternoon in September, he couldn't help but feel skeptical.

Mjartan, the CEO of Optus Bank, a South Carolina lender with $350 million assets under management, was there to meet Jamie Dimon, the CEO of JPMorgan. The meeting was no pairing of equals. JPMorgan, a global finance giant, is about 1,000 times as big as Optus Bank in terms of the assets it manages.

Mjartan, a white bank executive with over a decade and a half of experience serving Black communities and other underserved groups, was there to discuss the $30 billion commitment Dimon made after George Floyd's murder. But he had doubts about whether Dimon and his CEO peers were genuinely committed to closing the racial wealth gap. He thought: Is this genuine? Or is this a moment?

"Whatever cynical views I had before that meeting, they just disappeared almost in the first five minutes," Mjartan, an immigrant from Slovakia, said. "Jamie is an honest and humble guy. He is committed."

In the weeks and months following Floyd's death on May 25, 2020, Dimon and the CEOs of America's largest banks — most notably, Bank of America and Citi — made a promise to the nation, to the tune of about $32 billion. Their pledge was supposed to make the US economy more equitable for Black Americans. Two years later, Insider spoke with several banks that are Black-owned or serve Black customers. They described the investments as game-changing.

CEOs of five banks primarily serving Black communities said they were able 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 in ways that were previously out of the question. But to chip away at the racial wealth gap ⁠— the massive wealth discrepancy between Black and white Americans ⁠— Dimon, Citi CEO Jane Fraser, and their Wall Street peers need to sustain their investments of capital and time at the current pace, according to CEOs of Black-serving banks.

For Mjartan, the future is hopeful. After that meeting with Dimon, he had separate meetings with Fraser and multiple execs at Wells Fargo. They invested in the bank he runs, which primarily serves Black customers. Since then, his bank has been able to hire several more employees, modernize its digital-banking services, and boost the amount it has loaned from $60 million before 2020 to more than $160 million today.

"We were so capital-starved and resource-starved for decades," Mjartan said. "I've never seen anything like this, and it's genuine and it's real."

Wall Street made a strong down payment

After Floyd's killing, JPMorgan made a $30 billion commitment to racial equity, Citi's was $1.1 billion, and Bank of America's was $1.25 billion; part of all the commitments was tens of millions of dollars directed to Black-owned and Black-serving banks, known as minority-owned depository institutions, or community-development financial institutions.

It's important to note that the infusion of this capital was not in the form of grants but in equity stakes, from which America's largest banks stand to profit. But the terms of the investments are clear and fair, multiple CEOs of Black-led or Black-serving banks said.

Jeannine Jacokes, the CEO of the Community Development Bankers Association, said the members of the industry group, which include Black-owned and Black-serving banks and credit unions, felt they were finally getting the attention they deserved. Jacokes was a Senate staffer who helped draft the federal government's policies in the 1990s that created the special designation for banks and credit unions that serve historically marginalized communities.

"It's a great down payment. It's a good start," she said. "I hope that it isn't a moment. I hope that it is a movement because these are systemic problems that we are trying to solve here."

Banks serving marginalized communities have been historically underfunded, industry experts say. But the need for their services hasn't waned. Black Americans remain far more likely to be underbanked compared with white Americans, in part because of decades of racist policies. Researchers agree that white Americans greatly benefited from New Deal programs and numerous post-World War II policies, while Black Americans were discriminated against. When Black Americans started to access welfare benefits at a higher rate starting in the 1970s, there was backlash among conservatives seeking to clamp down on social programs.

Without a bank account or access to bank loans, many Black Americans turn to payday loans or cash-advance loans, which carry onerous terms of repayment and are widely seen as predatory. But the investments of 2020 could significantly increase the number of Black Americans in the banking system, multiple bank CEOs said.

Teri Williams, the chief operating officer and president of OneUnited Bank, a Black-led, Black-serving bank, received an investment from Citi. Though she would not disclose the terms or amount, she said the investment had allowed the bank to reach many new customers and provide new products. The bank recently rolled out a program for same-day small loans of up to $1,000 that don't require a credit check and have an annual percentage rate of 47%, which is significantly lower than a typical payday loan, which has an APR of more than 300%.

"We'd like to wipe payday loans off the map," she said. "This loan is an example of the types of products and services that our community needs. And it's one that a lot of banks don't offer."

Williams added that the bank's lending to small businesses and entrepreneurs "increased dramatically" from 2020 to 2021. OneUnited was also able to invest in a new phone-technology system, allowing customers to obtain answers or get to a live agent more quickly.

"Our abandonment rate, the rate at which people hang up before reaching someone, went from 15% down to 3%, with it sometimes being as low as 1%," Williams said. "It's allowed us to better service our customers and retain our customers."

Detroit's First Independence Bank received investments from JPMorgan, Wells Fargo, and Bank of America. Kenneth Kelly, the chair of First Independence, said the effect had been that his and other Black-owned banks were now able to move past "survival mode."

"For every dollar of equity invested, it allows our banks to hopefully lend up to nine times that," he said. "These investments are certainly off to a very good start that will allow our banks to really begin to grow in a way that they can materially have an impact in all of the communities that we're serving."

Kelly said there'd been a "significant" increase in terms of the mortgages and loans they'd been able to give to customers.

Southern Bancorp, an Arkansas bank, received an equity investment from JPMorgan. CEO Darrin Williams said that because of the investment, the bank was able to acquire a small community bank, thus increasing its customer base and number of branches. It's also on track to acquire another small bank. Southern Bancorp is now making more loans, particularly those of $10,000 or less, which are helping people purchase cars, start businesses, and fix up their homes, he said. In 2020, the bank made about 7,200 loans; in 2021, the number rose to more than 8,000 loans.

"It's fueling growth and innovation," Williams said.

The investments are a work in progress

By the end of last year, JPMorgan had allocated more than $18 billion of its $30 billion racial-equity goal. As part of that, the bank funded $13 billion in loans to help create and preserve 100,000 affordable housing units. It opened or spruced up more than 300 branches with community centers providing free education and resources for small-business owners and entrepreneurs. It took equity stakes totaling more than $100 million in 15 Black-owned or Black-serving banks and credit unions, and spent an additional $155 million with 140 Black and Hispanic suppliers. This is in addition to the $2 billion it spends with them annually.

"Our goal is to use this playbook and share it with other institutions," Carolina Jannicelli, the head of community impact at JPMorgan, said. "We are very interested in scaling this impact beyond just JPMorgan Chase."

Bank of America has deployed over $450 million, or just under half its $1.25 billion five-year commitment. Specifically, the bank invested $43 million total in 22 Black-owned or Black-serving banks and about $300 million in about 100 equity funds that provide capital to minority entrepreneurs and small-business owners. In February 2021, Bank of America expanded its community-homeownership commitment to $15 billion. The program, made up of grants to help with down payments, is directed at helping low- and moderate-income people purchase their first home.

"This isn't just about the $1.25 billion," said Ebony Thomas, racial equality and economic opportunity executive at Bank of America. "Sometimes when progress isn't fast, people lose sight. But we are making progress. It will not be overnight. Progress is incremental."

According to an April report, Citi has invested $1 billion of its $1.1 billion goal, including $44 million in 11 minority depository institutions and community development financial institutions and $88.6 million out of its $200 million pledge to companies founded by women and/or racially or ethnically diverse founders. It also spent over $1.2 billion with diverse suppliers in 2021 and closed $16.5 million in affordable-housing loans with minority-owned banks for a total of over $36 million.

"I'm most proud, though, of the work we've done internally to diversify our teams and embed racial equity across our business practices and policies so that it becomes institutionalized at the firm — this is one of our key measures of success and critical to the longevity of these efforts," Brandee McHale, the head of community investing and development at Citi, said.

Wells Fargo has made $450 million in financial commitments focused on supporting Black Americans since Floyd's murder, according to a company spokesperson. In March this year, Wells Fargo came under scrutiny after a Bloomberg report said it approved just 47% of its Black mortgage applicants compared with 72% of its white applicants in 2020. Kleber Santos, Wells Fargo's head of diverse segments, representation and inclusion, gave context to the statistic, saying the bank had to adhere to guidelines prescribed by Fannie Mae and Freddie Mac. He added that the bank was committed to advancing diverse homeownership.

"We're focused on answering the question: How can we create enduring relationships here?" Santos said.

Here's the breakdown so far:

• JPMorgan has allocated more than $18 billion of its $30 billion racial-equity goal, according to the bank.
• Citi has invested $1 billion of its $1.1 billion goal, according to an April report.
• Bank of America has deployed over $450 million, or just under half of its $1.25 billion five-year commitment, according to the bank.
• Wells Fargo has deployed over $275 million of its $450 million pledge, per a spokesperson.

The future

The $32 billion that America's largest banks committed after Floyd's murder has the potential to reshape the country, as long as it's a starting point, multiple CEOs of Black-owned and Black-serving banks said.

"We didn't get here overnight," Darrin Williams, Southern Bancorp's CEO, said. "And we won't resolve these challenges overnight, either."

Indeed, there is a long way to go. In a 2021 Pew Research Center survey of Black adults, less than half of respondents said they had an emergency fund to weather three months of hardship, and some reported taking multiple jobs to make ends meet. Black Americans, who were among those hit hardest by the coronavirus pandemic, are also more likely to experience unemployment than white Americans.

Compounding this is the fact that Black Americans are more likely to have their homes undervalued in appraisals and are more likely to be denied mortgages than white Americans. For example, Black Americans were over twice as likely as white Americans to be denied home-purchase loans in 2019, and Black borrowers who did get those loans were charged higher rates, according to the Consumer Financial Protection Bureau, a federal agency.

"What's being done now is the right amount of response, but it really does have to be long-lasting. It can't just be short term," OneUnited Bank's Teri Williams said.

Strengthening banks that serve Black Americans is just one part of the equation to solving the racial wealth gap, Valerie Wilson of Economic Policy Institute, an independent think tank, said. The other parts include raising pay, especially in low-wage sectors, improving diversity within the banking system to better serve nonwhite customers, and continuing to support Black-owned businesses as well as historically Black colleges and universities, Wilson and multiple Black bank CEOs said.

Nicole Lee Ndumele, a senior vice president at the Center for American Progress, a policy institute focused on the economy, agreed, saying "sustained effort" was needed from both the private sector and the public sector.

Despite inflation and fears of an approaching recession, Jannicelli, the JPMorgan exec, said the Wall Street giant was prepared to sustain long-term efforts to improve the lives of Black Americans.

"We ultimately want to drive change and see a reduction of the racial wealth gap," Jannicelli said. "We're using all of our resources: philanthropic, business, and human. That is our commitment well beyond the five-year time period."

For Mjartan, the CEO of Optus Bank, 2020 has been influential for his bank and the Black communities he serves.

"I do mean transformational," he said. "I'm not just being hyperbolic here."