Rolling in a sleek, silver motor home through the streets of north Tampa, Jamie Dimon epitomizes a man on the move. Or, to be more precise, someone eager to move on. As CEO of JPMorgan Chase, Dimon commanded a front-row seat in the financial debacle that mushroomed into the Great Recession. The combination of JPMorgan Chase's $25 billion bailout package and Dimon's own hefty paycheck ($21 million a year ago) made him a key target of Occupy Wall Street protestors. Mistakes were made, Dimon said during a bus tour visiting the megabank's Florida network. But it's time to move beyond a seemingly endless debate about who's to blame in the mortgage crisis; to move past vitriol over bank fees, the bailout, and America's widening wealth gap. "You need to stop denigrating business, because it doesn't build confidence," he said. "We need to move on."
At 55, Dimon is a bit grayer, but hasn't lost the spitfire that turned the onetime protege of Citigroup's Sandy Weill into one of the most powerful figures in finance. He now presides over a $2 trillion global institution, one that has powered past Bank of America to become the country's biggest bank.
Since getting a toehold in Florida by buying Washington Mutual's branch network, Chase Bank has swelled to more than 17,000 employees here, nearly 5,000 in the bay area alone. The company has added more than 100 branches in three years and, from nowhere, become the biggest small-business lender statewide.
Dimon, an entourage that included former U.S. Sen. Mel Martinez (now chairman of Chase's Florida operation), and a heavy security detail spent nearly a week crossing Florida on a fact-finding mission.
The Tampa Bay Times caught up with Dimon during the Tampa leg of the trek, as he wound through rush-hour traffic to Chase's Fountain Square complex near Tampa International Airport for a company rally.
The recent $25 billion mortgage settlement with regulators is viewed by some as a great deal for banks to move past the robo-signing controversy, but not so great for homeowners.
Were the foreclosures improper? No? That's a very important distinction. … Of all the foreclosures, we don't know of any where the actual information in the affidavit about the foreclosure itself is wrong.
We made a mistake. Punish us, but the punishment should fit the crime. You could argue that (the settlement) isn't enough, that the banks are getting away with something. That's all fine. … But the country is better off clarifying (procedures for) foreclosures and letting people move on. We've modified almost a million loans, three times more than we foreclosed on. We're trying to save everyone possible.
How much will the deal expedite foreclosures?
A little bit, but I don't think you'll see a dramatic change. A lot of the modifications … we're already doing.
You've predicted housing has bottomed out, at least nationally. Prices as well?
Prices will still go down a little bit. A lot of this is because you have a high percentage of distressed sales: 20 or 30 percent. Those are (selling) at a 30 percent discount to normal prices. But leading indicators — household formation, rental prices, supply and demand, investors coming in, all-time affordability, the recovery of jobs to back up household formation — all those actually are positive signs.
Eventually, we're going to see a real bounce off the bottom. Once distressed inventory comes down and all of a sudden there's not enough homes, you're going to have a bounce.
You've criticized others for an ongoing vilification of Wall Street and bankers?
I would say it differently. This indiscriminate scapegoating and finger-pointing. I don't think it's a good thing if you do it to banks or media. The point is there is some decent media and not decent; some good businesspeople and some not so good. My belief is this indiscriminate blame of both classes denigrates our society, destroys confidence — it certainly can't boost it — and damages us.
Is it surprising that people lash out after such a severe recession in which we've seen these polars of wealth creation and destruction?
I can give you all the reasons why. But whenever anyone says to me, "All media," I turn it off. "All politicians." I turn it off. I don't think it's the right way to have discourse. Abe Lincoln didn't do it. George Washington didn't do it. It shouldn't be done.
You don't justify it because you've had a tough time. As a matter of fact, in a tough time, the best people stand tallest. They're the ones who discriminate between the right and wrong. They're the ones who stick to the true blue. … Not the ones who out of convenience scapegoat and finger-point.
We seem entrenched in class warfare. How do we break free?
You know, I'm a banker. Ask him (gesturing to Martinez). He's a politician. A reformed politician.
Martinez: I'm a recovering politician.
Do you agree with the Buffett Rule, trying to make the wealthy pay more in taxes?
Dimon: Capital gains and interest income are (taxed) at 15 percent. Could they go to 20 or more? Sure. Is that part of a rational conversation about how we're going to deal with things? Yeah. I don't mind paying 39.6 percent (income tax), going up from 35. But that doesn't solve the problem of how much money we're wasting. I think just having a rational conversation is what's needed.
What I do object to is when politicians make statements that people who make a lot of money are trying to get away without paying. That's just not true. That's just not true. That's a big lie. Why doesn't the government (go after) the 6,000 people who have overseas accounts? Why doesn't the government publish their names? I think they should be paying their damn taxes. You guys should be in outrage about that. That's even worse. That's stealing.
For Mitt Romney to be paying 15 percent (on capital gains) legally, that's good. There are some who are deliberate tax cheats. That's a whole different issue.
You're sounding rather political. Any political aspirations?
No. It just doesn't suit me. I would get ulcers.
Still, you've been in this role at JPMorgan Chase for a while. Ready for a change?
No. I like what I'm doing. I think Chase can be a huge positive force in the recovery — for the world, the country, the community, charity. I've very proud of the place and the people here.
You've been a Democrat a long time, but sounding disheartened lately.
I know. I sound like barely a Democrat. Barely hanging on.
The wing nuts in both parties drive me crazy. I just wish the very liberal part of the Democratic Party would understand the importance of the economy. The importance of business. Business is generally very good. These companies make huge investments. They treat their people well. They're philanthropic. They follow the laws of the land.
Do we make mistakes? Of course we do. There's just some disconnect here that isn't good. … People pander to the wing nuts.
Are you supporting Obama for a second term?
I don't take a public position in who I'm supporting.
Your name was on a short list as possible Secretary of Treasury in Obama's first term. Are you interested in any government post if approached?
Let's talk about fees. We've seen some fees like the debit charge go away at the same time others are surfacing. Has it gone too far?
More than 80 percent don't pay the monthly fee (on checking). Here's the issue: It costs $300 to give you a checking account. What's the cost of that? Branches, ATMs, online bill pay, Smart systems, checking account, a debit card. Any business has a cost. If you want a customer, you care, but you have to make a fair profit to survive.
But even after the debit fee went away, banks were still profitable.
Very often people will see us as having a profit, and I'm saying it's really suboptimal results. Because we're big and have a lot of capital, it sounds like a lot. But these are huge services and huge risks these banks take. We want to be fairly paid for services we provide. Just like a newspaper or anybody else.
Is the issue one of degree? For instance, that $5 ATM fee you were testing?
If you're a client, we don't charge you for ATMs. We charge nonclients. I think we charge $2 now. It costs us $50,000 a year to have an ATM. It's not a gift. It's for our clients. The politicians that complain, I tell them, "You know what? I'm driving by your house. I'm feeling hungry and I need something to eat. So I walk through your living room and eat your dinner." I mean, who is supposed to provide services for free?
Are you only trying to make up operating costs through fees or steering customer behavior?
Obviously, if it relates a little to our costs, it may be pushing you a little bit to what we want. But we don't want what we want. We want what you want. That's how you make clients happy. When you walk into a restaurant, they may make more money on the Coca-Cola than on the Sprite, but they offer you, "What would you like to drink?" That's the way to treat people.
How much business did you lose to credit unions capitalizing on consumer discontent?
The credit unions weren't a big factor. And we want the credit unions to survive. But they've got their own set of benefits, like not paying taxes. What I don't like is when they badmouth other good companies. I really don't like that.
What's your biggest opportunity?
America is going to grow 3 million people a year. America is going to grow over the next 20 years. Middle market will grow. This private client thing (offering Chase Private Client banking services to customers with a net worth under $5 million), we would say is a huge opportunity.
One of the things I love is there's a lot of spirit here. A lot of entrepreneurs. The immigrant population — and I'm only one generation removed — their belief in this country and the opportunities kind of puts the rest of us to shame.
They see America for what it is, whereas a lot of other people are busy complaining about a lot of things. Yes, we had some severe issues. But it's time to move on. Here it is four years later and we're still fixing. Or not even fixing.
Where are we in the arc of economic recovery?
I think we're in a very broad-based recovery that is mild and strengthening.
Will the recovery endure when discouraged workers on the sidelines come back and unemployment rises again?
I think so. As long as we keep adding jobs. Adding jobs become self-fulfilling because people with jobs buy homes; they get married; they have babies. So we add 3 million Americans a year. That's a lot of corn. That's a lot of diapers. That's what creates a self-sustaining recovery, and I think we're seeing that now. Whether it is derailed by Europe, I don't know. I hope not.
Any surprises you've discovered during the road trip?
A funny one today is this one department where we had to send them three or four faxes. I said, "We're still sending faxes?" Why do we have fax machines at all? You always learn. It's always moving. … It's like playing a sport. When a player makes a shot, you have to move to it. Business is not static.
Jeff Harrington can be reached at [email protected]