US President Donald Trump believes the bank is discriminating against him and his supporters, adding that Bank of America and JPMorgan Chase had previously refused to accept his deposits.
“I think they’re totally discriminating, but I think there are more, but they discriminate against a lot of conservatives,” he told CNBC in an interview Tuesday. “I think this phrase might be more Trump supporters than conservatives.”
Trump commented when asked about a Wall Street Journal report that he said he plans to punish banks that discriminated against conservatives but did not specifically address the order.
According to a draft reviewed by Reuters, the order directs regulators to review banks for “politicized or illegal de-pasting” practices.
“Well, they discriminated,” Trump said of the actions JPMorgan Chase took after his first term in office. “I had hundreds of millions of people, and many accounts were stuffing cash. And they told me, “Sorry, we’re not you. You’re leaving for 20 days.”
Trump said he believes the refusal of banks to deposit without providing evidence indicates that former US President Joe Biden’s management has encouraged bank regulators to “destroy Trump.”
Trump then tried to deposit funds with Bank of America, which he was denied and eventually split the cash into many smaller banks.
“The bank discriminated against me very seriously,” he said.
In a statement, Jpmorgan did not address the president’s specific claim that it discriminated against him.
“We will not close our explanation for political reasons. I agree with President Trump that there is a desperate need for changes in regulations,” Jpmorgan said. “We praise the White House for addressing this issue and look forward to working with them to get this right.”
Bank of America declined to comment.
“Reputation risk”
During Biden’s administration, regulators may have asked banks why they are offering banking services to Trump due to the “reputation risk” issue, a source familiar with the issue told Reuters.
Another source said the bank is under intense scrutiny and pressure on what was recognized as a risk to the bank’s reputation and should be careful due to Trump’s legal entanglement.
Sources said that JPMorgan currently has banking ties with members of the Trump family, dating back to the year, adding that the bank is also processing many campaign accounts related to Trump.
After Trump came to power, the Federal Reserve announced in June that it would instruct its supervisors not to consider “reputation risks” when investigating banks, and would remove the indicators that were the focus of industry complaints.
The Wall Street Journal reported Monday that the expected executive order directs regulators to investigate whether financial institutions violate the Equal Credit Opportunity Act, Antitrust Act, or Consumer Financial Protection Act by dropping clients for political reasons.
He signed it as early as this week, saying it could approve financial penalties, consent forms or other disciplinary measures against violators.
The White House did not immediately comment on the reported order.
Trump in January said the CEOs of JPMorgan Chase and Bank of America refused to serve conservatives. At the time, the two banks refused to make bank decisions based on politics.
“This seems like rhetoric that is likely to be forgotten at lunchtime,” said David Wagner, equity director at APTUS Capital Advisors. “There are many other drivers who ultimately predict bank performance, such as deregulation, so there is no significant impact on banks.”
Stocks in both banks are hits on Wall Street. As of 11am (15:00 GMT) in New York, JP Morganchase has dropped by 1.6% and Bank of America has dropped by 1.4%. Wells Fargo was not specifically appointed, but stocks from competing financial institutions also fell 1.3%.
The market responds
Banks have consistently argued that complaints about “stopping off” should be targeted at regulators. Because they argue that it can discourage troublesome rules and bank supervisors from engaging in certain activities.
“The heart of the matter is regulatory overreach and supervisory discretion,” the industry group Bank Policy Institute said in a statement.
“Bank agencies have already taken steps to address issues such as reputational risks, and we hope that future executive orders will strengthen this progress by directing regulators to stand up to the flawed regulatory framework that first raised these concerns.”
In January, Trump alleged that Bank of America was denounced conservatives in a Q&A session, along with Bank of America CEO Brian Moynihan at the World Economic Forum in Davos, Switzerland.
“We hope that many conservatives will start opening banks to conservatives as they complain that banks do not allow businesses within the banks and that it includes places called Bank of America,” Trump said at the time.
Separately, in March, the Trump Organization, the holding company of the Trump family’s business venture, sued Capital One Finance to close what the Trump organization claimed was political reasons.
