President Donald Trump (left) and JP Morgan CEO Jamie Dimon.
Reuters
JPMorgan Chase CEO Jamie Dimon said Monday that while President Donald Trump’s lawsuit seeking $5 billion in damages for closing his accounts was without merit, he sympathized with the president’s anger over the episode.
Trump accuses JPMorgan and others of shutting down his accounts for political reasons, which his conservative supporters have called discrimination.
“The case has no merit,” Dimon told CNBC’s Leslie Picker in an interview on the sidelines of a JPMorgan conference in Miami.
“But I agree with them,” he said. “They have a right to be angry. I would be angry too. Like, why is a bank allowed to do this?”
The answer, according to Dimon, is that banks are “forced” to take banking away from individuals to comply with regulators who could punish companies that expose a lender to reputational risk.
“We exclude people from banks because it creates legal and regulatory risks for us,” Dimon said. “It’s much easier for a bank to say, ‘I’m not taking the risk, let them go elsewhere.'”
Trump sued Dimon and JPMorgan in January as part of a broader campaign launched after Trump returned to office last year. The president, or his companies, also sued Capital one on bank debts; the media for allegations of defamation; and even the IRS because of the leak of his tax information.
In recent court filings, JPMorgan acknowledged shutting down dozens of accounts associated with Trump in the weeks following the Jan. 6, 2021, Capitol attack.
While there is no individual law stating that banks must abandon customers due to reputational risk, the industry operates within a framework of regulation and guidelines that makes it risky for lenders to meet the needs of certain customers.
The lawsuit against JPMorgan, the world’s largest bank by market capitalization, and its CEO puts Dimon in a difficult position.
That forces Dimon, one of finance’s most vocal executives, to choose between defending himself and his bank without further angering Trump, who has the power to move markets with a social media post.
Additionally, the financial sector is just beginning to benefit from deregulatory efforts by Trump appointees, which will allow banks to become more profitable and hold less capital in case of losses.
“There’s a lot of misunderstanding here,” Dimon said. “I hope the law changes and this gets sorted out.”