Dimon says Trump debanking lawsuit ‘has no merit’ but he’s sympathetic to concerns

JPMorgan Chase CEO Jamie Dimon said Monday that President Donald Trump’s $5 billion lawsuit for damages over the closure of his accounts is without merit, but that he understands the president’s anger about the incident.

Trump accuses JPMorgan and others of shutting down his accounts for political reasons, in what his conservative supporters call discrimination.

“The case has no merit,” Dimon told CNBC’s Leslie Picker in an interview on the sidelines of the 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 for banks to be “forced” to bankroll individuals to comply with regulators that can penalize companies for introducing reputational risk to the lender.

“We are closing people’s bank accounts because it creates legal and regulatory risks for us,” Dimon said. “It was much easier for a bank to say, ‘I’m not taking the risk, let them go to another bank.'”

Trump sued Dimon and JPMorgan in January as part of a broader campaign launched after he took office last year. The president or his companies also filed a lawsuit Capital One upon non-bank requests; Media outlets involved in alleged libel; and even the IRS for leaking tax information.

JPMorgan acknowledged in recent court filings that it shut down dozens of Trump-related accounts in the weeks after the Capitol attack on Jan. 6, 2021.

While there is no individual law stating that banks must abandon customers due to reputational risk, the industry operates under a framework of regulation and guidance that makes it risky for lenders to service certain customers.

The lawsuit filed against JPMorgan, the world’s largest bank by market value, and its CEO puts Dimon in a difficult situation.

This is forcing Dimon, one of the finance industry’s most outspoken leaders, to toe the line between defending himself and his bank without further angering Trump, who has the authority to move markets with a social media post.

What’s more, the financial industry is just beginning to benefit from Trump’s appointees’ push to deregulate banks that will make them more profitable and hold less capital for losses.

“There are a lot of misunderstandings here,” Dimon said. “I hope the law changes and I hope it gets resolved.”