December 14, 2009

JPMorgan Chase Plans Continued Support for Sound Lending and Regulatory Reform

New York, December 14, 2009 -- JPMorgan Chase & Co. (NYSE: JPM) confirmed that Chairman and CEO Jamie Dimon would attend today's White House meeting to discuss the bank's plans to continue to support the Administration's objectives of increased and responsible lending to individuals and businesses, increased efforts to keep families in their homes, better consumer protections, and responsible executive compensation.

As a global financial services firm, JPMorgan Chase is connected to many corners of the economy and is working together, every day, with its customers, communities, employees and vendors to support a successful economic rebound.

"This is simply what a bank should do," said JPMorgan Chase Chairman and CEO Jamie Dimon.

JPMorgan Chase serves over 90 million consumers and 2 million small businesses across the country.  The firm lends to approximately 10,000 government organizations, non profits, hospitals and schools in the United States, and the investment bank has client relationships with over 4,000 issuers and 15,000 investor clients globally. As a market leader, the bank has led the market with $120 billion in corporate loans to its large, corporate clients this year and raised $580 billion for clients in the global debt and equity markets.

The bank spends more than $15 billion per year with approximately 40,000 vendors, who provide jobs to millions of employees. JPMorgan Chase pays more than $10 billion a year in taxes to the U.S. federal government as well as to state and local jurisdictions.

Specifically, JPMorgan Chase continues to focuses its efforts on:

Supporting Small Businesses:

  • Recognizing the role small businesses play in creating jobs and supporting our economy, JPMorgan Chase has $29 billion in outstanding balances in the form of loans, lines and credit card balances to small businesses.

  • Last month, the bank announced plans to increase lending to small businesses by up to $4 billion in 2010, boosting expected new lending to about $10 billion next year to this vital segment of the U.S. economy.

  • To accomplish increased lending, JPMorgan Chase is hiring 325 additional small business bankers to work around the country supporting all of these efforts, adding to the 1,900 bankers who currently support the less than $10 million segment.  The bank also added approximately 100 middle market bankers to support lending to mid-sized companies.

  • In November, the bank began offering a second look on all previous loan applications from small businesses to ensure the bank has examined all possible ways to provide the credit.

  • Maintaining Responsible Lending, Despite Decreased Demand:

  • The bank is continuing to offer customers responsible loans that meet their needs and that they can afford.

  • Banks are competing to lend to qualified business borrowers - but demand is down. Mortgage applications are down 10 percent year-to-date, and credit card spending is down 7 percent.

  • Small business loan applications were down 37 percent in the third quarter, but the bank maintained its lending at nearly the same levels over the past year.  JPMorgan Chase has just recently started to see an uptick in these applications, following on its announcement in November that it would increase lending even more in this area.

  • While financial institutions should do all they can to lend responsibly, it is important that institutions are not pushed to lower their underwriting standards.  Making bad loans would be even worse for the economy, and this was one of the leading causes of the financial crisis.

Stepping Up for Local Governments and Non Profits:

  • Since the credit crisis that struck in the fall 2008, JPMorgan Chase has provided more than $90 billion in financing to non-profit and healthcare companies, universities and state and local governments, helping to build bridges and parks, improve social services, train young people for jobs, expand hospitals and fund medical research

  • JPMorgan Chase was able to offer billions of dollars in financing to states and municipalities like Illinois, New Jersey and California at critical times when credit markets were shut down.

  • The company's strong capital position allowed it to step in and help these borrowers through traditional loans, credit facilities and bond and capital market underwritings.

Mortgage Modifications:

  • Chase has offered more than 568,000 mortgage modifications to struggling homeowners in 2009 through the government's and Chase's modification programs.

  • The bank modifies mortgages in accordance with the standards specified by the Obama Administration, and when a borrower does not qualify for the Administration's program, we use a range of other modification programs.

  • Chase opened 30 Chase Homeownership Centers in 13 states this year for more effective face-to-face contact, with a planned addition of 21 more sites in the first quarter of 2010.  We are proud to be the first major servicer to offer this option.

  • We've hired 3,700 additional mortgage operations employees to handle the unprecedented volume generated by the troubled economy and housing market.

  • We've also launched a coordinated program to call a customer 36 times, reach out by mail 15 times and make at least two home visits, if necessary, to get the appropriate documents.

  • We are hopeful that streamlined programs and constant improvements will increase modifications even more.  The bank is constantly working with Treasury officials on new methods to try to increase the number of borrowers who make their mortgage payments under these programs and to encourage them to return income verification documents.

Supporting Financial Regulatory Reform:

  • As CEO and Chairman Jamie Dimon has written in the Wall Street Journal and the Washington Post, we agree with the need for better financial regulation, including regulatory consolidation, systemic risk regulation, ending too-big-to-fail, better consumer protection, and more transparency in the derivatives markets.

  • The details matter, and the stakes are simply too high and the consequences too far-reaching to do this hastily and poorly. While we agree with many of the proposals, we share concerns with others that some regulatory proposals could restrict lending by banks, which will hinder economic growth and job creation.

  • Clarity and consistency build confidence and are critical to companies that are looking to create jobs, invest and expand their businesses.

Upholding Sound Executive Compensation Principles:

  • Poorly designed compensation practices contributed to the financial crisis.  JPMorgan Chase has always tried to stay at the forefront of sound and sensible compensation practices, with a process that is disciplined and rigorous.

  • JPMorgan Chase has always paid a significant share of our incentive compensation in stock. Executive compensation is tied to long-term company performance with equity awards that vest over multiple years. All senior executives retain at least 75 percent of all equity awards granted to them.

  • Incentive compensation is determined by looking at multi-year performance periods, not just a single year, and does not reward excessive risk taking. The bank's bonus recoupment policy is beyond that required by Sarbanes-Oxley.

  • As a general practice, JPMorgan Chase does not have: change-of-control agreements, special executive retirement plans, golden parachutes, special severance or medical packages for senior executives or merger bonuses.

JPMorgan Chase is committed to working with policymakers and looks forward to hearing President Obama's ideas about improving the economy and getting people back to work.  For more information on JPMorgan Chase's work to help the economic recovery and serve its communities, visit www.jpmorganchase.com/thewayforward.

JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2 trillion and operations in more than 60 countries. The firm is a leader in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.


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