JPMorgan Chase (JPM) says news reports circulating on the Internet that the bank is exerting new capital controls on certain bank accounts are an overreaction to a "streamlining" and "derisking" process Chase says has been underway for several months.
The reports indicate the bank has moved to limit cash withdrawals and wire transfers for certain business customers starting on November 17, including Chase BusinessSelect checking and Chase BusinessClassic checking. The bank has sent letters to certain customers saying they will be unable to send and receive domestic and international wire transfers, and "cash activity" will be limited to $50,000 per statement cycle, including cash deposits, night drops, and ATM and cash withdrawals.
"These changes will help us more efficiently manage the risks involved with these types of transactions," one letter reads.
The fear is small and medium-sized businesses could be hurt by the restrictions. But the bank says these were typically mass accounts opened on the Internet, with no bank representative managing them, where domestic or international wire transfers could be sent without bank oversight.
The bank says it is "derisking" these accounts by streamlining the number of customer accounts from, say, six accounts with no bank contact or representative to three accounts with a bank rep managing them. Also the bank said some of the accounts customers had signed up for did not have wire transfer services that customers had wanted, or had limited withdrawal services, but that the bank is instead transferring these customers into new accounts that do provide these services.
Chase said it is not exerting new capital controls on customer accounts.
Elizabeth MacDonald joined FOX Business Network (FBN) as stocks editor in September 2007 and is the author of Skirting Heresy: The Life and Times of Margery Kempe (Franciscan Media, June 2014).
Follow Elizabeth MacDonald on Twitter @LizMacDonaldFOX.