By Tom Halls
Jan 24 (Reuters) – U.S. President Donald Trump on Thursday filed a $5 billion lawsuit against JPMorgan Chase and its CEO Jamie Dimon for allegedly closing its accounts for political reasons.
Here’s a look at Trump’s claim and how the case might play out:
Why is Trump complaining?
America’s largest bank closed the accounts of several Trump businesses in April 2021 after they had been customers for decades, according to Trump’s lawsuit. JPMorgan notified Trump of the shutdown on January 6, 2021, about a month after his supporters stormed the US Capitol building.
Trump said the bank’s motivations were political and that JPMorgan violated Florida law to prevent unfair business practices and acted in bad faith.
Trump also accused Dimon of ordering a malicious “blacklist” to warn other banks from doing business with the Trump Organization, Trump family members and Trump himself. Trump said publication of the blacklist constituted trade defamation under Florida law and resulted in significant financial and reputational damage to his business.
The lawsuit comes after Dimon criticized Trump’s immigration policy and his proposal to cap the interest rates banks charge on credit cards.
JPMorgan has denied wrongdoing, saying the lawsuit has no merit and that it closes accounts that create legal or regulatory risk for the company.
What will Trump have to show to win?
The case will likely boil down to whether Trump’s legal team can prove the bank canceled the accounts because of his political views. The terms of the banking agreement strongly favor banks, who are not required to provide a reason for account closure and customers often do not know why their account was closed.
In this case, Trump said JPMorgan gave 60-day notice to close the account but did not give a reason.
Banks have to monitor their customers for various types of potential risks, and a customer whose account has been closed due to prohibited activities such as money laundering has no basis to challenge it.
However, some grounds for account termination may be considered unfair business practices or bad faith, including account termination due to the customer’s religion or race.
Legal experts say canceling an account because of an account holder’s political views, which JPMorgan does not do, would likely be unacceptable.
However, it may be legal if an account holder’s views were so extreme that they undermined trust in the bank. After losing the November 2020 election, Trump can argue that his political views are mainstream because he recently garnered more than 70 million votes.
