President Donald Trump, left, and JP Morgan Chase CEO Jamie Dimon.
Reuters
JPMorgan Chase CEO Jamie Dimon said Monday that while President Donald Trump’s lawsuit seeking $5 billion in damages for shuttering his accounts was without merit, he sympathized with the president’s anger over the episode.
Trump is accusing JPMorgan and others of closing his accounts for political reasons in what 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 the right to be angry. I’d be angry, too. Like, why is a bank allowed to do that?”
The answer, according to Dimon, is that banks are “forced” to debank individuals to comply with regulators who could punish companies for bringing reputational risk to a lender.
“We debank people because it causes legal, regulatory risk for us,” Dimon said. “It’s been much easier for a bank to say, ‘I’m not taking the risk, let them go bank elsewhere.'”
Trump sued Dimon and JPMorgan in January as part of a broader campaign begun after Trump regained office last year. The president, or his companies, has also sued Capital One over debanking claims; media outlets over alleged defamation; and even the IRS over the leak of his tax information.
In recent court filings, JPMorgan acknowledged it closed dozens of accounts associated with Trump in the weeks after the Jan. 6, 2021, Capitol attack.
While there isn’t an individual law stating that banks must drop customers over reputational risk, the industry operates under a framework of regulations and guidance that makes it risky for lenders to cater to certain clients.
The suit against JPMorgan, the world’s biggest bank by market cap, and its CEO puts Dimon in an awkward position.
It forces Dimon, one of the most outspoken leaders in finance, to toe the line between defending himself and his bank while not further angering Trump, who has the power to move markets with a social media post.
Further, the financial industry is just starting to benefit from a deregulatory push by Trump appointees that will enable banks to become more profitable and hold less capital for losses.
“There are a lot of misunderstandings here,” Dimon said. “Hopefully the law will change, and hopefully it’ll get sorted out.”