JPMorgan (NYSE:JPM) is freezing customer bank accounts in the latest bank scandal.
Republican attorneys general from 19 states say the bank is “persistently” discriminating against its own clients and closing bank accounts without warning.
The law enforcement officials, led by Kentucky Attorney General Daniel Cameron, sent a letter to JPMorgan CEO Jamie Dimon stating that the banking giant’s practices go against the company’s own policies on equality, per Business Insider.
The letter, which has now been published by the Wall Street Journal, states that JPMorgan has repeatedly discriminated against customers based on their religious or political beliefs.
“It is clear that JPMorgan Chase & Co. (Chase) has persistently discriminated against certain customers due to their religious or political affiliation.
This discrimination is unacceptable.
Chase must stop such behavior and align its business practices with the anti-discrimination policies that Chase proclaims.”
The attorneys general cite the sudden account closure of a religious liberty organization as an example of the bank’s discriminatory practices.
In May 2022, Chase abruptly closed the National Committee for Religious Freedom’s (NCRF) checking account.
NCRF is a ‘nonpartisan, faith-based nonprofit organization dedicated to defending the right of everyone in America to live one’s faith freely.’
When NCRF inquired about the reason Chase closed the account, multiple bank employees stated that the decision came from the ‘corporate office.’ Specifically, NCRF’s executive director “was informed that a note in the file read that Chase employees were not permitted to provide any further clarifying information to the customer.’’
A JPMorgan representative told The Journal: “We have never and would never exit a client relationship due to their political or religious affiliation.”
Latest JPMorgan Banking News
The nation’s largest bank JPMorgan is facing a painful $1.5 billion fee that may also be felt by various other banks later this year.
The Federal Deposit Insurance Corporation’s board of directors approved a proposal to raise the fees banks pay to have depositors’ money insured.
This comes after the government insured depositors’ money that exceeded the $250,000 insurance cap at Silicon Valley Bank and Signature Bank to stem the panic that ensued from their failures.
In total, that depleted $15.8 billion from the FDIC’s Depositor Insurance Fund (DIF).
Banks that are FDIC-insured pay fees to the fund in exchange for coverage in the event that they fail.
To recover the $15.8 billion, the FDIC is proposing levying higher fees on banks that have more than $5 billion in uninsured deposits.
The FDIC is focusing on these banks since they benefited the most from the FDIC’s unprecedented actions in the wake of the collapse of SVB and Signature Bank, according to CNN.
The proposed rule would charge banks 0.125% annually for two years on all their uninsured deposits as of the end of last year after deducting $5 billion.
JPMorgan Chase would pay around $1.5 billion in additional fees given the bank had around $1.2 trillion in uninsured deposits at the end of 2022, according to FDIC records.
JPMorgan Now Freezes Customer Account After Whopping Withdrawal
A new report is going viral after JPMorgan froze a customer account after withdrawing $99bn without explanation.
The report is quite bizarre, however; most wouldn’t be surprised given the banks long history of scandals.
According to the user, the withdrawal automatically caused his account to freeze, and all attempts to contact customer support for an explanation have failed.
“My checking account has been like this since last Monday and I’ve called Chase and been transferred to five different departments and nobody knows WTF is going on.
And I’ve got a mortgage due at the first of the month. Once this clears up, because of Chase’s incompetence I’m considering switching to Wells Fargo,” said the user.
But this isn’t the first time a JPMorgan customer account has been overdrawn by $99bn says DailyHodl.
“In April of 2016, a woman in Chicago abruptly realized $99 billion had been withdrawn from her deceased mother’s bank account.
At the time, Chase told ABC News it was “investigating the issue”.
And in February of 2020, a woman in Texas was shocked to see that the account that she shared with her late husband was also overdrawn by more than $99 billion.
In response to that report, a Chase representative said it routinely places massive debt on accounts held by people who have passed away to protect against unauthorized withdrawals.”
Early this month, it was reported that JPMorgan began to abruptly close business accounts as well as personal accounts in its latest scandal.
Other Recent Banking News
Morgan Stanley (NYSE:MS) CEO James Gorman said last Friday he plans to step down as CEO this year.
The bank’s board has narrowed its CEO search to three “very strong” internal candidates, Gorman said.
Morgan Stanley’s CEO candidates are the men leading the bank’s three main businesses: Ted Pick, Andy Saperstein and Dan Simkowitz, according to people with knowledge of the matter, per CNBC.
Gorman will still take on the executive chairman role “for a period of time” after stepping down as CEO, he said.
“The specific timing of the CEO transition has not been determined, but it is the board’s and my expectation that it will occur at some point in the next 12 months,” Gorman said.
“That is the current expectation in the absence of a major change in the external environment,” he continued.
Morgan Stanley’s CEO’s resignation comes after several banks have begun to experience turmoil in the banking sector.
After the collapse of Silicon Valley Bank and Signature Bank in March and First Republic Bank in April, a study on the fragility of the U.S. banking system found that 183 more banks are at risk of failure even if only half their uninsured depositors—those with deposits greater than $250,000—decide to withdraw their funds, USA Today reported.
“If a ‘confidence crisis’ can happen to First Republic, it can happen to any bank in this country,” says Jake Dollarhide, Chief Executive Officer of Longbow Asset Management.
A run on these banks could pose a risk to even insured depositors—those with $250,000 or less in the bank—as the FDIC’s deposit insurance fund starts incurring losses,” the economists wrote.
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