Explainer: Does Trump have a case against JPMorgan for closing his accounts?

By Tom Hals

Jan 24 (Reuters) – U.S. President Donald Trump filed a $5 billion lawsuit on Thursday against JPMorgan Chase and its chief executive Jamie Dimon for allegedly closing accounts for political reasons.

Here’s a look at Trump’s claims and how the case could play out:

WHY TRUMP SWING?

The largest U.S. bank closed the accounts of several Trump companies in April 2021 after they had been customers for decades, according to Trump’s lawsuit. JPMorgan notified Trump of the closings 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 prohibiting unfair business practices and acted in bad faith.

Trump also accused Dimon of ordering a malicious “blacklist” to warn other banks against 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 damage as a result.

The lawsuit comes after Dimon criticized Trump’s immigration policies and proposed capping interest rates that banks charge on credit cards.

JPMorgan has denied wrongdoing, said the lawsuit has no merit and is closing accounts that create legal or regulatory risks for the company.

WHAT WILL TRUMP NEED TO SHOW TO PREVAIL?

The case will likely come down to whether Trump’s legal team can prove the bank canceled the accounts because of his political views. The terms of banking agreements tend to heavily favor banks, which do not have to provide a reason for closing an account, and often customers do not know why their accounts are being closed.

In that case, Trump said JPMorgan gave 60 days notice of closing the account, 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 due to prohibited activity such as money laundering would have no reason to challenge it.

However, some reasons for closing an account may be considered an unfair business practice or bad faith, including closing an account because of a customer’s religion or ethnicity.

Legal experts said that canceling an account because of the account holder’s political views, which JPMorgan said it does not do, would likely be impermissible.

However, it could be legal if an account holder’s views were so extreme as to undermine trust in the bank. Trump could argue that his political views were mainstream because he just collected more than 70 million votes in losing the November 2020 election.

AND THE COMMERCIAL LIBEL FILING?

Trump’s trade defamation claim stems from the blacklisting allegation. Trump claims that JPMorgan’s blacklist is reserved for clients who have engaged in irregular or other actions worthy of having their accounts closed. Trump said his business accounts were in good standing before 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 attorney general. A state appeals court later vacated a half-billion-dollar penalty against Trump without completely overturning the fraud finding. Both sides appealed.

Legal experts said trade defamation claims typically involve a defendant accused of disparaging a plaintiff’s product to gain a competitive advantage — an aspect missing from Trump’s allegations. The claim will depend on the existence of a blacklist and whether JPMorgan made disparaging statements to other banks about Trump and his businesses that were false.

HOW WILL THE CASE TURN OUT?

The case was filed in Florida state court in Miami-Dade County. JPMorgan could try to take the case to federal court, which is often the preferred venue for corporate defendants. Unlike Florida circuit court judges, who are generally elected, federal judges are appointed for life. Capital One is defending a similar case against the Trump Companies, which it has moved to federal court.

JPMorgan will likely try to have the lawsuit dismissed quickly, arguing that the allegations are too speculative to support a case. If Trump can get past that stage, it will pave the way for him to take discovery and demand documents and access to witnesses from inside the bank.

HOW CAN THE CASE BE RESOLVED?

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 wants $5 billion, but damages would depend on disrupting Trump’s business by moving to another financial institution. The president said the account closures forced him to go to “small banks everywhere.”

Trump has sued several media companies in his personal capacity since returning to the White House, and two of those cases were quickly settled, while others continue to be litigated.

(Reporting by Tom Hals in ‌Wilmington, Delaware; Additional reporting by Jonathan Stempel in New York; Editing by Noeleen Walder and Bill Berkrot)