The investment will help support M&F Bank and The Harbor Bank of Maryland through the J.P. Morgan Asset Management’s Empower share class. A new institutional money market share class created in February 2021 for exclusive distribution by minority and diverse-led financial institutions.
With the share class, J.P. Morgan takes on the administrative and back-office work while training and mentoring the MDIs throughout the process. HubSpot explained that the MDIs gain a revenue share for most of the management fees charged on these accounts. That allows MDIs to gain a new recurring income stream without any of the regulatory challenges that come with taking large deposits directly into their bank, so they can better serve their communities.
The most recent figures show just 20 banks in America as of the third quarter of 2021, per the Federal Deposit Insurance Corp. That number was down from a robust 48 in 2001.
HubSpot believes its investment will help expand banking to Black businesses and families.
“By partnering with M&F Bank and The Harbor Bank of Maryland via the Empower share class program, we hope to help close the racial wealth, health, and opportunity gap for the underbanked Black communities these MDIs serve and build strong relationships with the banks to help them grow, support and nurture their customer base,” HubSpot CFO Kate Bueker told BLACK ENTERPRISE by email.