Trump sues JPMorgan and CEO Dimon over alleged ‘debanking’

After he quit as president of the United States in January 2021, Donald Trump filed a lawsuit against JPMorgan Chase and its CEO, Jamie Dimon, for $5 billion, alleging that JPMorgan had defrauded him and his businesses for political reasons.

The lawsuit was filed in Florida’s Miami-Dade County on Thursday. It claims that JPMorgan gave out no justification for the abrupt closing of several accounts in February 2021. Trump claims that doing so caused JPMorgan to cut off access to the president’s and his companies’ millions of dollars, stifled their operations, and forced them to move bank accounts to a different location.

According to the lawsuit, “JPMC debanked Trump and his businesses” because it believed the current political climate would encourage doing so.

JPMorgan said in a statement that it regrets Trump’s lawsuit, but that they won’t close the accounts for political reasons.

A bank spokesman said, “We think the suit has no merit.” For political or religious reasons, JPMC does not close accounts. Accounts are closed because they present a risk to the business in terms of law or regulations.

The White House announced that it would refer the issue to the president’s outside counsel.

In recent years, conservatives have voiced their opposition to banks because they improperly adopted “woke” political positions and, in some cases, discriminated against particular industries like firearms and fossil fuels.

During Trump’s second term, the Republican president claimed in interviews that some banks had refused to hire him and other conservatives for services. The banks have refuted the claim.

In a practice known as “debanking,” a US banking regulator reported last month that the nine largest US banks had previously imposed restrictions on providing financial services to some contentious industries.

In light of the Trump administration’s efforts to investigate banks over alleged debanking, JPMorgan announced last year that it was cooperating with inquiries from government agencies and other entities.

reputational risk

US regulators have examined themselves to see if excessive supervisory controls stifled the provision of services by banks to particular industries.

Federal bank regulators last year declared they would stop policing banks based on what is known as “reputational risk,” and Trump-led officials have also taken steps to relax oversight.

In accordance with that strategy, supervisors could impose sanctions on institutions that were otherwise prohibited from public view or that would result in expensive legal action.

Banks have voiced their frustration with the vague and subjective reputational risk standard, which enables supervisors to veer off specific groups or industries.