President Donald Trump (left) and JPMorgan Chase CEO Jamie Dimon.
Reuters
JP Morgan Chase CEO Jamie Dimon said Monday that President Donald Trump’s lawsuit seeking $5 billion in damages for account closures was without merit, but that he sympathized with the president’s anger over the incident.
President Trump has accused JPMorgan and other banks of closing accounts for political reasons, which his conservative supporters call discrimination.
“This lawsuit has no value,” 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. Why are banks allowed to do that?”
The answer, Dimon said, is that banks are being “forced” to strip individuals of their bank accounts to comply with regulators who could punish companies for posing reputational risks to lenders.
“Debunking people’s bank accounts creates legal and regulatory risks,” Dimon said. “It’s now much easier for banks to say, ‘I’m not going to take the risk, so let me go to another bank.'”
Trump sued Dimon and JPMorgan in January as part of a broader campaign that began after he returned to office last year. The president and his company are also filing lawsuits. capital one Concerning a request for bank account abolition. Alleged defamation by media outlets. And even the IRS regarding leaking his tax information.
In a recent court filing, JPMorgan acknowledged that it closed dozens of accounts associated with Trump in the weeks after the Jan. 6, 2021, attack on the Capitol.
While there is no specific law that says banks must turn customers away due to reputational risk, the industry operates under a framework of regulations and guidance that makes it risky for lenders to cater to certain customers.
Mr. Dimon’s lawsuit against JPMorgan, the world’s largest bank by market capitalization, and its CEO has put Mr. Dimon in an awkward position.
That leaves Mr. Dimon, one of the most outspoken leaders in the financial industry, forced to walk the line between protecting himself and his bank while trying not to further anger President Trump, who has the power to move markets with his social media posts.
Additionally, the financial industry is just beginning to benefit from a push for deregulation by President Trump’s appointees, which will improve banks’ profitability and allow them to reduce their capital against losses.
“There’s a lot of misconceptions here,” Dimon said. “I hope the law changes and the problem gets resolved.”
