JPMorgan, Capital One Litigate Trump Lawsuits, Weighing Risks of Settling

JPMorgan Chase and Capital One Financial are actively fighting lawsuits from former President Donald Trump regarding the 2021 closure of his accounts, a legal strategy that experts suggest may be less perilous than settling. The banks are defending their decisions amid allegations of political bias, betting that a court battle poses fewer long-term risks than a settlement that could encourage a wave of similar litigation.

The Lawsuits and Defenses

Former President Trump and his businesses have filed separate lawsuits against the two financial institutions, claiming his accounts were terminated for political reasons. A suit filed in January 2026 against JPMorgan and its CEO, Jamie Dimon, seeks at least $5 billion in damages, alleging the bank acted to promote a "woke" agenda. In a separate case filed in March 2025, the Trump Organization sued Capital One over the closure of more than 300 accounts, alleging political bias.

In its defense, Capital One told a federal court its decision followed a careful internal anti-money-laundering (AML) review, though it has not accused Trump or his businesses of wrongdoing. JPMorgan has called the lawsuit against it "meritless," stating it does not close accounts based on political affiliation. A spokesperson for Trump's legal team maintained the closures were for "blatantly" political reasons.

A Strategic Calculation

While fighting a high-profile figure like Trump risks airing confidential bank procedures and prolonging a public dispute, legal and industry sources cited by Reuters believe settling could be more hazardous. A key concern is that a settlement could set a precedent, potentially inviting a flood of lawsuits from other customers whose accounts were closed, a practice often termed "debanking."

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According to legal experts, settling could be interpreted as an admission that accounts were closed improperly, exposing the banks to further regulatory scrutiny and compensation claims. Customer agreements, however, typically grant banks broad discretion to close accounts, which forms a core part of their legal defense.

Broader 'Debanking' Scrutiny

The lawsuits are unfolding against a backdrop of heightened political and regulatory scrutiny over debanking, where banks terminate services due to perceived legal, financial, or reputational risks. The issue has become a political flashpoint, with some Republicans accusing Wall Street firms of discriminating against conservative-aligned individuals and industries.

The matter has also attracted significant regulatory attention. The Office of the Comptroller of the Currency (OCC) is reportedly investigating approximately 100,000 debanking complaints against multiple banks, while the Department of Justice is also reported to be probing related allegations.