New York: President Donald Trump sued banking giant JPMorgan Chase and its CEO Jamie Dimon for USD 5 billion Thursday over allegations that JPMorgan stopped providing banking services to him and his businesses for political reasons after he left office in January 2021.
The lawsuit, filed in Miami-Dade County court in Florida, alleges that JPMorgan abruptly closed multiple accounts in February 2021 with just 60 days notice and no explanation. By doing so, Trump claims JPMorgan and Dimon cut the president and his businesses off from millions of dollars, disrupted their operations and forced Trump and the businesses to urgently open bank accounts elsewhere.
“JPMC debanked (Trump and his businesses) because it believed that the political tide at the moment favoured doing so,” the lawsuit alleges.
In the lawsuit, Trump alleges he tried to raise the issue personally with Dimon after the bank started to close his accounts, and that Dimon assured Trump he would figure out what was happening.
The lawsuit alleges Dimon failed to follow up with Trump. Further, Trump’s lawyers allege that JPMorgan placed the president and his companies on a reputational “blacklist” that both JPMorgan and other banks use to keep clients from opening accounts with them in the future.
In a statement, JPMorgan said it believes the suit has no merit.
Trump threatened to sue JPMorgan Chase last week at a time of heightened tensions between the White House and Wall Street. The president said he wanted to cap interest rates on credit cards at 10 per cent to help lower costs for consumers.
Chase is one of the largest issuers of credit cards in the country, and a bank official told reporters that it would fight any effort by the White House or Congress to implement a rate cap on credit cards. Bank industry executives have also bristled at Trump’s attacks on the independence of the Federal Reserve.
Debanking occurs when a bank closes the accounts of a customer or refuses to do business with a customer in the form of loans or other services. Once a relatively obscure issue in finance, debanking has become a politically charged issue in recent years, with conservative politicians arguing that banks have discriminated against them and their affiliated interests.
Debanking first became a national issue when conservatives accused the Obama administration of pressuring banks to stop extending services to gun stores and payday lenders under “Operation Choke Point.”
Trump and other conservative figures have alleged that banks cut them off from their accounts under the umbrella term of “reputational risk” after the Jan 6, 2021, attack on the US Capitol. Since Trump came back into office, the president’s banking regulators have moved to stop any banks from using “reputational risk” as a reason for denying service to customers.
“JPMC’s conduct … is a key indicator of a systemic, subversive industry practice that aims to coerce the public to shift and re-align their political views,” Trump’s lawyers wrote in the lawsuit.
Trump accuses the bank of trade libel and accuses Dimon himself of violating Florida’s Unfair and Deceptive Trade Practices Act.
In its statement, JPMorgan said that it “regrets” that Trump sued the bank but insisted it did not close the accounts for political reasons.
“JPMC does not close accounts for political or religious reasons,” a bank spokesperson said. “We do close accounts because they create legal or regulatory risk for the company.
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