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Dimon: JPM 'Simplifying' Its Business, Improving Compliance

WASHINGTON JPMorgan Chase (JPM) is focusing on simplifying its businesses and improving compliance with regulatory requirements, Jamie Dimon said in an email to employees on Tuesday.

The bank's chairman and chief executive said that its recent exit from the student lending business and elimination of its physical commodities sales and trading businesses was an attempt to "refocus our priorities."

"We have been asking our senior people to eliminate products and services that are not essential to serving our customers and are not core to our business," Dimon wrote.

In the lengthy email, Dimon said the bank is also working to confront the regulatory challenges facing it, including reviewing its foreign correspondent banking business, improving oversight of outside vendors, and adding regulatory compliance staff.

The email comes as JPMorgan Chase nears a $750 million to $800 million settlement with regulators related to last year's "London Whale" trading scandal. An announcement could come as early as this week.

It also is yet another sign of a newly resurgent Dimon who, after the criticism he took over the Whale incident, successfully fought off an attempt by shareholders to strip him of his chairman title earlier this summer. Since then, he has become more outspoken about the issues facing the industry and his company.

The regulatory settlement is expected to include an admission of wrongdoing by the bank. Although Dimon did not reference it directly, he said in his email that if "you don't acknowledge mistakes, you can't fix them and learn from them."

"So now, as in the past, we are recognizing our problems, rolling up our sleeves and fixing them," Dimon wrote. "Our control agenda is priority #1."

That includes a renewed focus on the bank's foreign correspondent banking business, an area that has gotten several large banks, including HSBC and Standard Chartered, into trouble recently with U.S. regulators.

JPMorgan Chase was slapped with a consent order from the Office of the Comptroller of the Currency in January over "critical deficiencies" with respect to its anti-money-laundering practices. Many observers expect regulators to impose a monetary penalty on the bank soon over those failures.

Dimon said JPMorgan Chase is strengthening its internal controls "particularly around 'Know Your Customer' and transaction monitoring."

He also said the bank is stepping up supervision of outside vendors, yet another area that has tripped up the bank.

"If a vendor or partner engages with our customers, we need to be as vigilant about their practices as we are about our own, particularly if they interact directly with customers," Dimon wrote. "We are also proactively trying to decrease the number of vendors we have, which reduces complexity in our business and creates more jobs internally."

This summer, JPMorgan Chase halted most sales to third-party collectors of credit card debts amid regulatory concerns over how it pursues payments from customers who are delinquent.

Dimon said that the bank has significantly boosted compliance resources, adding roughly 3,000 employees this year that are dedicated to risk, compliance and control efforts. The bank has also provided 750,000 hours of regulatory and control-related training related to topics like anti-money-laundering and Dodd-Frank implementation, he said.

Dimon added that he has also tried to build a "more open and transparent relationship with our regulators." He held town halls for examiners with the OCC, Federal Reserve Board and Federal Deposit Insurance Corp. in May and June. He also held a corporate town hall with bank employees who "regularly interact with regulators."

"We discussed our culture of transparency, stressing the necessity of fully and accurately reporting material issues to our regulators in a timely manner and responding promptly to their requests," Dimon said.

Dimon concluded by pledging to create a "best-in-class operating system" for the bank.

"Never before have we focused so much time, effort, brainpower, technological power and money on a single, enterprise-wide objective," he wrote. "Make no mistake we are going to get this right."


(2) Comments



Comments (2)
All evidence is going public Jamie including your solution to the problem when you personally flew Mike in to tell me and the others that you solved the problem by replacing General Counsel with a former reputable SEC Enforcement attorney you hired. The evidence is indisputable especially those 134 areas you intentionally had off balance sheet and was verified you ordered it and continued to sign the SOX control certifications. I can't watch this grow anymore and again now with announcement after announcement and trying to fix all the wrong things hurting tens of millions in the process. And that is exactly what is happening and lawyers nationwide all arming up again and all going to have the wrong causes of action and people again.
Now this is very troubling as I know and others do 100% positive, I was there and personally gave evidence to the CFPB and SEC. The version of the NAF story now and what was reality is two very different stories. Where did the criminal securities fraud go all under the criminal codes of sox and concealed from internal and regulatory reporting including ffiec, call reports, fed, treasury, irs, sec enterprise control report numbers for 10k's and 8k's. I had recently taken the position at Chase over the Litigation and Arbitration firms internal and external I had a great deal of experience from GE Cap, and WaMu (funny seems mostly missing division that had consumer mortgages, helocs, small business and commercial and nothing matches official story but I do have a 6 hour long tape from 2005 that will soon make clear to all). There was no failure of SOX systems or law there was a meeting to go over final cba and benefits hard and soft when I said the 1099's and things like banko, no off balance sheet for third parties and payments, accounting, invoicing and the systemic compliance control systems, ffiec and call reports etc the the big one TRANSPARENCY SO NO WORRIES OR COMPLIANCE ISSUES..funny a few key people now SVP and EVP level at Chase and other banks went plowing through that division the first and only on the CGI sox complaint systems and all came and top industry experts in the US and Globally in their fields from GE Capital same as me and put targets on all and got them out as fast as possible. And since that whole NAF and my catching the truth literally real time in the middle of the Congressional orders and investigation and prepping everything with internal compliance per the detailed orders by the OCC and I spoke to the OCC Criminal and Audit in one short conference call and there was supposed to be follow ups and two way conversations as a lot I had to track the effects and then re-engineer back to the root cause. Funny thing is probably a one in a billion chance that would drop on me and although never worked in card I recognized and saw what others didn't in that Minn AG suit first of all "that's my super computer and who is abusing it I got blocked from turning the cas and third party processing on and impacts to all kinds of areas that interfaced with government various systems and insurance taxes and government loans or government backed items. So it isn't the evil republicans in Texas you need to worry about it is the millions of employees of major banks, global operations and enterprise operations and over 600 operations and call centers where most of the global and enterprise operations is for all banks, insurance, major companies, government contractors etc.. Put here in the middle of Texas for "sustainability" after all of the hurricanes in 2004 and 2005 so wanted no flood zones (this year blew that) hurricanes, blizzards, tornadoes, earthquakes etc. for the enterprise and global main centers. And now the criminal enterprise of Ogletree who until their new blown up website strarted making its way literally around the world enraging employees everywhere and in multiple countries looking at the criminal charges and securities criminal fraud charges to bring against them and all involved and why limit to Texas nail them in numerous countries. Myself and other witnesses abus
Posted by Linda.Almonte | Monday, September 05 2016 at 12:31PM ET
Wonder if by "simplifying" Mr. Dimon means complying with regulations instead of devising and executing complex schemes to circumvent regulations?
Posted by jim_wells | Wednesday, September 18 2013 at 1:45PM ET
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