Since 2011, JPMorgan Chase has been quietly building a banking presence in Charlotte, the backyard of rival Bank of America.
For now, the New York-based bank has focused on serving corporate customers while recently launching a private banking office for wealthy individuals. But could retail branches someday be in the plan?
“Not yet,” CEO Jamie Dimon said in an interview with the Observer this week on a quick trip to Charlotte. “But I think it’s not unreasonable sometime in the future.”
After a visit to Denver earlier in the week, Dimon, 61, stopped in Charlotte Wednesday to meet with clients and employees at a reception at at Quail Hollow Club. He said he hadn’t been in town probably since the late 1980s when he was an executive at the bank that would become Citigroup.
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“I remember coming here and there was the battle of the buildings, who was going to have the biggest building,” said Dimon, referring to the rivalry between Charlotte banks NCNB (now Bank of America) and First Union (now part of Wells Fargo).
Deploying any branches in Charlotte would ramp up competition between JPMorgan, the largest U.S. bank by assets, and Bank of America and Wells Fargo, its next-biggest competitors. But for now the company, which uses the Chase name for retail operations, is focused on building its corporate client base, part of an effort started a few years ago to serve business customers outside of its traditional footprint.
The bank, which has long had clients such as Duke Energy and Martin Marietta Materials in the state, has about about 100 employees in North Carolina,. most of whom are in Charlotte, said Doug Petno, head of commercial banking at JPMorgan, who also made the trip.
“We’ll grow that team as the business grows, but it’s a long process,” he said. “We want to bank the best clients here in town. They typically don’t just move their business over night. So we’re here to stay.”
Dimon began his banking career at American Express in the 1980s, moved on to Citigroup predecessor Commercial Credit and in 2000 landed as CEO of Chicago-based Bank One, which he merged with JPMorgan Chase in 2004. Among the four largest U.S. banks, Dimon is the only CEO to have kept his job since the 2008 financial crisis, although he did come under fire in 2012 for losses caused by a trader nicknamed the “London Whale.”
In recent years, Dimon has emerged as a prominent voice in the business world. He’s chairman of a national trade group called the Business Roundtable and had served on one of Donald Trump’s presidential councils until it disbanded amid criticism of the president’s response this summer to the violence in Charlottesville, Va.
Soon after the riots, Dimon wrote in a memo to employees that he strongly disagreed with Trump’s reaction in which the president appeared to equate the actions of white supremacist groups and those protesting them. “There is no room for equivocation here: The evil on display by these perpetrators of hate should be condemned and has no place in a country that draws strength from our diversity and humanity,” he wrote.
During his stop in Charlotte, Dimon, who underwent successful treatment for throat cancer in 2014, discussed a range of issues with the Observer, from the future of retail banking to the president’s tax plan to the Equifax data breach. Questions and answers have been edited for clarity and brevity.
Q. Bank of America and Wells Fargo have been cutting back on branches. What is JPMorgan’s approach?
A. Every bank is doing it slightly differently. What we see is the traffic is coming down. The average size will change. It will become more automated. It’s still there to serve clients. You might very well have less operations in a bank, like less tellers, more advisers. Those advisers would be investment advisers, mortgage advisers, small business loan officers. People want to see people face to face, so I think branches will be important.
Q. What are you doing to replace entry-level jobs that are being displaced because of technology?
A. Technology has been doing that your whole life. It’s just now people talk about it all the time. Your whole life there are jobs ‘being displaced’ but in reality there are always new jobs being created. And it’s not like you’re simply laying off tellers. Many are being retrained, some go on to be bankers, some go on to do other stuff, some retire. We have huge programs to hire people in call and operating centers, to hire people in branches as personal bankers. And more training, by the way. And there very well may be more of those. I don’t want to give away our secrets, but there will be new jobs created because it’s a new world.
Q. Economic growth has not come back as much as people would like. What would you recommend to increase growth?
A. I’m a believer that we have 2 percent growth in spite of what the government has been doing. I’m not talking about the last seven months, I’m talking about the last 10 years or so. In my chairman’s letter, I made a list of things we are not doing well. And honestly saying that if we did them well – you could argue whether it’s even possible – I think we would grow to 3 to 4 percent. That’s educating kids, work skills, that’s the competitive tax system, our inability to rapidly develop infrastructure programs, where it takes 10 years on average to build a bridge. That’s a disgrace.
Q. Any immediate reaction to the tax plan announced Wednesday by the Trump administration?
A. The first thing is we have to have corporate tax reform. It’s a huge mistake for America not to have a competitive tax system. Over the last 20 years, it’s gone from being the most competitive to the least competitive. The damage is permanent and it’s staring you in the face. I think the corporate tax rate should be 20 percent. We have to go to a territorial system (in which companies would not be taxed on their overseas earnings), so we don’t have this buildup of capital overseas. There is $2.5 trillion overseas. Some will come back here if they kind of neutralize everything.
Q. We still view Charlotte as a big financial center, but we have diversified. How are we viewed by Wall Street?
A. I think you’re being diversified. You have Bank of America here, Duke Energy, we’ve seen a whole bunch of impressive companies on this trip. It’s got low inflation, very good education, fairly good infrastructure, much better weather than most of us have to deal with most of the time. I’d say quite good. My guess is over time you will become more of an economic hub, not a financial hub.
Q. You spoke out about the administration’s move to end the Deferred Action for Childhood Arrivals program, which protects young undocumented immigrants from deportation. What do you think should be done?
A. We should pass something that looks a lot like what the (previous) executive order was, give the dreamers a path to citizenship.
Q. You’ve expressed support for expanding the Earned Income Tax Credit, which lowers taxes and provides refunds for working people of low to moderate incomes. Why do you want it expanded?
A. It is a very good program that should be increased significantly. Has flaws. But a single mother, two children, could get up to $6,000 a year if she’s earning 14 thousand dollars. To me, that’s jobs, which leads to dignity, leads to first job, leads to second job, leads to household formation. It would reduce some of the social problems we have.
Q. A 2014 Harvard-University of California, Berkeley study named Charlotte last out of 50 big cities for economic mobility. What can Charlotte’s business community do to improve economic mobility?
A. Focus on growing the economy more. I think the business people have to be more engaged in what makes a more vibrant economy, which involves taxes, infrastructure and, at the local level, skills. Skills training has got to be local, because what you need here is different than what they need in Detroit. We directly go hire people out of schools and make them tellers. My guess is if you made a list of what all the companies do here in Charlotte, it’s probably pretty extensive.
Q. In the wake of Wells Fargo’s sales scandal that erupted last year, has JPMorgan done any analysis of its sales practices or made any changes because of what happened?
A. Whenever there’s a problem like that you can imagine every regulator demands all this information. And even if they don’t, by the way, when I wake up in the morning and we see something like that, we all expect, without even making a phone call, that the people involved in those businesses would (look into the issue). No, we haven’t found those problems here. But there will be lessons you’ll always learn from something.
Q: Credit-reporting company Equifax has been in the news since a major data breach the credit-reporting company recently disclosed. What would you tell your customers worried about security of their personal data as we all do more things online?
A. We spend $700 million a year on cybersecurity. We’ve been talking about this for years. Most of the banks have very good standards. It is a major issue for the United States of America, and we know that. You shouldn’t roll out a new thing if it hasn’t been cyber-tested. So our rollouts are all cyber-tested. The clients are completely protected with us. If you lose money because of a cyber issue that’s our fault at JPMorgan Chase on the consumer side, we’re responsible, you don’t have to worry.