US President Donald Trump filed a USD5 billion lawsuit against JPMorgan Chase and its CEO Jamie Dimon on Thursday for closing his accounts allegedly for political reasons. Here is a look at Trump’s claims and how the case could play out:
The largest US bank closed 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 closures about a month after his supporters stormed the US Capitol building on January 6, 2021.
Trump said the bank’s motivation was political and that JPMorgan violated Florida law barring unfair trade practices and acted in bad faith.
Trump also accused Dimon of ordering a malicious “blacklist” to warn other banks about doing business with the Trump Organization, Trump family members and Trump himself. Trump said the publication of this blacklist amounted to trade libel under Florida law and said his businesses suffered considerable financial and reputational harm as a result. The suit comes after Dimon criticized Trump’s immigration policies and proposal to cap interest rates that banks charge on credit cards.
JPMorgan denied wrongdoing, said the lawsuit had no merit and that it closes accounts that create legal or regulatory risk for the company.
The case will likely boil down to whether Trump’s legal team can prove the bank canceled the accounts because of his political viewpoints. Terms of banking agreements tend to strongly favor the banks, which do not need to provide a reason for closing an account and customers often don’t know why their accounts are terminated.
In this case, Trump said JPMorgan gave a 60-day notice of the account closure but did not provide a reason.
Banks must monitor their customers for a variety of potential risks, and a customer who had an account closed because of banned activity such as money laundering would have no grounds to challenge it.
However, some reasons for terminating an account might be considered an unfair trade practice or bad faith, including closing an account due to a customer’s religion or ethnicity.
Legal experts said canceling an account because of an accountholder’s political viewpoint, which JPMorgan said it does not do, would likely be impermissible. However, it might be legal if an accountholder’s views were so extreme they undermined trust in the bank. Trump could argue that his political views were mainstream as he had just amassed more than 70 million votes in losing the November 2020 election.
Trump’s trade libel claim stems from the allegation of a blacklist. Trump claims the JPMorgan blacklist is reserved for clients that have engaged in malfeasance or other actions worthy of having their accounts closed. Trump said his business accounts were in good standing prior to being added to the list. In February 2024, nearly three years after the accounts were closed, a New York state judge found Trump and his businesses liable for civil fraud, in a case brought by the state’s attorney general. A state appeals court later threw out a half-billion dollar penalty against Trump without completely overturning the fraud finding. Both sides appealed.
Legal experts said trade libel claims usually involve a defendant accused of disparaging a plaintiff’s product to gain a competitive edge — an aspect that is lacking from the Trump allegations. The claim will depend on the existence a blacklist and whether JPMorgan made disparaging statements to other banks about Trump and his businesses that were false.
The case was filed in Florida state court in Miami-Dade County. JPMorgan could try to move the case to federal court, which is often the preferred venue for corporate defendants. Unlike Florida trial court judges, who are generally elected, federal judges are appointed for life. Capital One is defending a similar case by Trump businesses, which it had moved to federal court.
JPMorgan will likely try to have the lawsuit quickly dismissed by arguing the allegations are too speculative to sustain a case. If Trump can get past this stage, it clears the way to take discovery and demand documents and access to witnesses inside the bank.
If JPMorgan, which is heavily regulated by the federal government, cannot get the case dismissed, it will be under pressure to settle before a trial. Trump is seeking USD5 billion, but damages would depend on the disruption caused to Trump’s businesses in moving to another financial institution. The president has said the account closures forced him to go to “small banks all over the place.” Trump has sued several media businesses in his personal capacity since he returned to the White House and two of those cases quickly settled, while others continue to be litigated.
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