Chase CEO details coronavirus relief measures
The ongoing spread of COVID-19 has suppressed activity in nearly every sector of the economy. Today, in his annual letter to shareholders, JP Morgan CEO Jamie Dimon outlined some of the steps his bank will be taking to help affected customers.
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JP Morgan's coronavirus relief measures
While we tend to focus on JP Morgan's credit card portfolio here at TPG, the company manages over $2 trillion across a wide range of financial products including mortgages and car loans. JP Morgan's relief efforts reflect this diverse array of business activity, including the following:
- Providing a 90-day grace period for mortgage and auto loan/lease payments and waiving any associated late fees.
- Removing minimum payment requirements on credit cards and waiving associated late fees.
- Not reporting payment deferrals such as late payments to credit bureaus for up-todate clients.
- Continuing to responsibly lend to qualified consumers.
- Waiving or refunding some fees, including early withdrawal fees on certificates of deposit.
Reduced fees, payment flexibility and grace periods are sure to provide immediate relief to customers who may be out of work right now, but it's good to see Chase taking the next step and not reporting deferred payments to credit bureaus. This means that customers won't have to worry about any negative impact on their credit report if they choose to take advantage of one of these programs.
Many of JP Morgan's customers will qualify for some type or assistance here, but in most cases it won't be provided automatically. You can visit Chase's dedicated coronavirus webpage to request payment assistance, find updated branch hours, and get help disputing charges that have been affected by the coronavirus (including travel plans).
Dimon predicts a "major recession"
The annual shareholder letter covers a wide range of topics and includes detailed financial information about many of JP Morgan's subsidiary businesses, but it's also an opportunity for the chief executive to share his insight and outlook on prevailing market conditions. It's quite obvious that the coronavirus is negatively impacting the U.S. economy, but the full extent of that impact may not be known for months or even years. However, Dimon is predicting that the U.S. will face a major recession:
"We don't know exactly what the future will hold – but at a minimum, we assume that it will include a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008. Our bank cannot be immune to the effects of this kind of stress. "
However, it's not all doom and gloom. Dimon notes that JP Morgan is coming off record years in terms of both revenue and profit and has performed well in the Federal Reserve's annual stress tests and the banks own internal testing. The latest stress test showed that even in extremely adverse financial conditions, JP Morgan can continue to lend out an additional $150 billion to its clients. The bank voluntarily suspended stock buybacks recently to preserve capital and liquidity and may reduce or suspend its dividend payment if the situation deteriorates further.
Related Reading: Best Chase credit cards
Bottom line
JP Morgan is one of the largest companies in the US, with hundreds of thousands of employees, customers and clients. CEO Jamie Dimon projected strength in his annual letter to shareholders, noting that the bank is taking immediate action to help its customers and its well prepared to weather further economic challenges. For Chase customers, hopefully this news provides some relief during these uncertain times.
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