JPMorgan Chase Must Allow Shareholders to Weigh in on Report Into Politically-Motivated ‘Debanking,’ SEC Rules
Tyler O'Neil /
JPMorgan Chase & Co. must allow shareholders to vote on a resolution urging the company to investigate politically-motivated discrimination after Chase denied payments or canceled accounts in what critics call a discriminatory trend in banking.
The Securities and Exchange Commission declined Chase’s attempt to exclude a resolution on the issue from the company’s proxy materials for the annual shareholder meeting on May 16.
“Banks shouldn’t be punishing customers for their speech,” Michael Ross, a legal counsel with Alliance Defending Freedom, which supports the resolution, told The Daily Signal in an exclusive statement Wednesday. “Every American needs access to financial services. And governments have granted Chase and other financial institutions significant privileges so that they can serve the public.”
“So when megabanks like Chase start discriminating against customers for their political and religious views, they’re betraying the public trust and jeopardizing the ability of millions of Americans to participate in the marketplace,” Ross added.
Jeremy Tedesco, senior counsel and senior vice president for corporate engagement at Alliance Defending Freedom, hailed the SEC move as “a much-needed step toward transparency.”
“Chase’s recent behavior suggests a pattern of politically motivated debanking,” Tedesco argued. “The company needs to change course and assure its shareholders and customers that it respects everyone’s freedom to participate in the marketplace without fear of political or anti-religious bias.”
Related: Watchdogs Press JPMorgan Chase Bank for Answers on Cancellation of Religious Freedom Group’s Account
In May 2022, Chase closed an account for the National Committee for Religious Freedom, an organization founded by Sam Brownback, a former Kansas governor and former U.S. ambassador-at-large for international religious freedom under President Donald Trump. Brownback, along with conservative organizations, suggested Chase closed the account for religious or political reasons, a claim Chase denied. The bank claimed it closed the account because it needed more information about donors and recipients than the nonprofit provided.
The bank did not act in a discriminatory manner, a JPMorgan spokesperson previously told The Daily Signal.
“I can tell you confidently we have never [closed], and would never close, an account due to one’s political or religious affiliation. Full stop,” the spokesperson said. “I can’t discuss confidential client relationship information publicly, but I can tell you that we communicated with the former client many months ago, in writing, and they are aware of why we closed the account.”
Chase had also closed accounts associated with the Arkansas Family Council and Defense of Liberty in 2021.
The Bahnsen Family Trust submitted a shareholder proposal directing Chase’s board of directors to evaluate and issue a report on Chase’s debanking. The resolution states:
Shareholders request the Board of Directors of JPMorgan Chase & Co. conduct an evaluation and issue a report within the next year, at reasonable cost and excluding proprietary information and disclosure of anything that would constitute an admission of pending litigation, evaluating how it oversees risks related to discrimination against individuals based on their race, color, religion (including religious views), sex, national origin, or political views, and whether such discrimination may impact individuals’ exercise of their constitutionally protected civil
rights.
The resolution’s supporting statement warns that “many companies in the financial services industry … frequently include vague and subjective standards in their policies like ‘hate speech’ or promoting ‘intolerance’ that allow employees to deny or restrict service for arbitrary or discriminatory reasons.” The Viewpoint Diversity Business Index, which Alliance Defending Freedom publishes, identified numerous examples of this in many companies’ terms of service.
“The inclusion of vague and arbitrary terms risks impacting clients’ exercise of their constitutionally protected civil rights, by creating the potential that such persons or groups will be denied access to essential services as a consequence of their speech or political activity,” the supporting statement warns. “Moreover, they risk giving fringe activists and governments a foothold to demand that private financial institutions deny service under the sweeping, unfettered discretion that such policies provide.”
Chase aimed to remove the proposal, claiming that it falls under ordinary business matters. The SEC firmly rejected that move in a March 21 letter. Alliance Defending Freedom sent the SEC a letter supporting the proposal.
The Daily Signal’s Fred Lucas contributed to this report.
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