I'm LongbridgeAI, I can summarize articles.JPMorgan Chase and Capital One are choosing to fight President Trump's lawsuits alleging political 'debanking' rather than settle. Legal experts suggest settlement poses greater risks, potentially inviting mass litigation from other customers and revealing confidential internal deliberations. While fighting carries risks of heightened animus, banks maintain their account closures were based on anti-money-laundering reviews, not politics. A federal regulator is currently probing approximately 100,000 similar complaints against major banks.
By Nupur Anand and Jonathan Stempel
NEW YORK, Sept 10 (Reuters) - As U.S. President Donald Trump pressures institutions he views as adversaries, JPMorgan Chase and Capital One are fighting back. It is a strategy that legal experts and industry sources say may carry fewer risks than giving in.
Trump and his businesses are suing the banks, alleging they closed his accounts in 2021 for political reasons. They deny the claims. Capital One told a federal court in July that it closed Trump's accounts following an internal anti-money-laundering review, sparking renewed scrutiny including from a senior Democratic senator who last week pressed the bank for more details.
Capital One has not accused Trump or his businesses of money-laundering. Spokespeople for both banks declined to comment. The Trump Organization last week called the anti-money-laundering review a pretext to conceal a politically motivated decision.
While several legal experts said the banks have strong defenses, fighting Trump poses risks for the banks by potentially deepening animus with the president and airing confidential internal deliberations in public.
But settling could be more hazardous. It could encourage lawsuits from many other customers claiming they were similarly "debanked," half a dozen legal experts and banking industry sources said. A federal bank regulator is probing about 100,000 such complaints against multiple banks and is expected to soon release its findings.
"The larger risk of settling is we don't know what the Trump family might demand," said Todd Zywicki, a George Mason University law professor who has worked with Trump's transition and agency review teams on federal financial oversight.
"It could invite additional lawsuits by people who faced adverse actions over their bank accounts and, depending on the terms of individual settlements, provide information to anyone who claims they were debanked," Zywicki added.
Debanking occurs when a bank cuts off an account holder's access to services, often because of concern about legal, financial or reputational risks.
A spokesperson for Trump's legal team said Capital One, JPMorgan and other major institutions debanked the president, his family and businesses for "blatantly" political reasons.
"President Trump's powerful lawsuits are holding these bad actors accountable for their disgraceful conduct," the spokesperson said.
LEGAL EXPERTS SAY BANKS HAVE STRONG CASES
Republicans have for years accused Wall Street banks of discriminatory left-leaning "woke" policies to cut off services to religious or conservative groups and conservative-aligned industries such as fossil-fuel companies and gunmakers.