Wednesday, May 07 15:40:47
US Bank, JP Morgan Chase, is closing the accounts of current and former foreign government officials and a number of prominent US adult film stars.
It is closing the diplomats' accounts in an attempt to avoid the compliance costs associated with them, the Financial Times reported.
Meanwhile, according to American celebrity blogger Perez Hilton, the bank has reportedly sent out letters to the adult film actors in the US informing them that their accounts would be closed by May 11, but withheld specific reasons for why they were doing so.
Around 100 accounts are affected.
The bank, according to a report on Euromoney.com today, also had a run-in with some others in the adult entertainment business last year when porn studio MRG Entertainment filed a lawsuit against JPMorgan Chase for refusing to underwrite a loan for "moral reasons."
The ban on diplomats by the largest U.S. bank by assets, which affects 3,500 accounts, has prompted former Colombia finance minister Jose Antonio Ocampo to accuse it of discrimination in a complaint to the consumer regulator, the report said.
According to an FT article, JPMorgan said it was closing the Chase accounts and stopping the credit cards of the officials because of increased compliance costs. Banks are obliged to subject accounts of "politically exposed persons" to added scrutiny.
Ocampo, an economist who was also nominated to become World Bank president, has written to the U.S. Consumer Financial Protection Bureau to complain that he was a victim of discrimination, the FT report states.
The ban does not apply to JPMorgan's private bank, which caters to wealthy clients, the FT quoted a person familiar with the situation as saying.
Brian Marchiony, a JPMorgan spokesman, could not be immediately reached for comment on the report outside regular U.S. business hours.