JPMorgan Chase & Co. (NYSE:JPM) is redeploying hundreds of employees to help the nation’s largest bank resolve mounting regulatory problems, people familiar with the developments told Dan Fitzpatrick and Julie Steinberg of the Wall Street Journal. The company plans to double the number of staff working on regulatory issues by the end of this year. JPMorgan expects that there could be more regulatory enforcement actions attacking the loopholes in its consumer operations.
With over 256,000 employees worldwide, the Jamie Dimon-led bank continues to record solid growth, and its shares closed yesterday to six-year highs. But the bank’s senior executives realize that it would take several years to resolve the regulatory problems and regain regulators’ trust.
JPMorgan Already Has Four Enforcement Actions
On Tuesday, JPMorgan Chase & Co. (NYSE:JPM) shareholders voted in favor of Jamie Dimon’s dual role as the bank’s chairman & CEO. Many of the bank shareholders were demanding that the roles of chairman and chief executive officer be split. After his victory at the annual shareholders meeting on Tuesday, Dimon’s next challenge is to overcome regulatory problems. According to the research firm SNL Financial, JPMorgan already has four enforcement actions. Two of the enforcement actions are about risk management weaknesses that the regulators identified after huge losses in London Whale trade last year. The other two want JPMorgan to improve its anti-money-laundering systems.
The company is responding to regulatory actions by forming a team dedicated to address only regulatory problems. The Oversight & Control Group will look after more than 20 internal measures taken to improve the company’s controls. Every business division of JPMorgan Chase & Co. (NYSE:JPM) will have a control officer reporting to the head of that business unit as well as Oversight & Control Group.
JPMorgan Halts Other Projects
However, it is still unclear how much money JPMorgan Chase & Co. (NYSE:JPM) will have to spend to resolve these issues. Sources said that the bank has halted several new projects so that it can focus completely on regulatory issues. The two important projects that have been halted are the development of instant-issue credit cards for people who lost their cards and advertising campaign for its private-wealth- management division in California.
JPMorgan Chase & Co. (NYSE:JPM) shares were down 1.03% to $53.08 at 9:36 AM EDT.