Skip to main content

Newsroom

April 30, 2024

Fact Sheet: JPMorgan Still Reaping Benefits of First Republic Acquisition, With Taxpayers Bearing the Cost

WASHINGTON, D.C.— Shayna Olesiuk, Director of Banking Policy, issued the following statement in connection with the release of a Fact Sheet titled “Jamie Dimon is Still Dancing in the Streets One Year After JPMorgan Chase’s Acquisition of First Republic Bank.”

“One year ago, First Republic Bank, with nearly $230 billion in total assets, became the second largest bank failure in U.S. history. Meanwhile, JPMorgan Chase, the United States’ largest bank, got even bigger and more powerful when it acquired First Republic in a generous deal with the FDIC. While JPMorgan greatly benefited from this deal, taxpayers were forced to bear the cost – to the tune of nearly $16 billion. This case shows once again how the most powerful banks on Wall Street benefit from a rigged system that allows them to benefit from crises of their own making, at the expense of the American people.

“JPMorgan framed the acquisition as a gesture of goodwill, stating ‘Our government invited us and others to step, and we did…’ but it failed to mention the benefits that the acquisition has yielded. JPMorgan also received a $50 billion loan from the FDIC and loss-share agreements that will shield JPMorgan from the majority of losses from the purchased First Republic loan portfolios if borrowers do not make payments. The FDIC will cover 80% of losses for the first seven years for single-family residential mortgage loans and for the first five years for commercial loans, including commercial real estate loans. Shortly after the deal was done, JPMorgan announced plans to close 21 of 84 acquired First Republic branches, leaving many depositors with no local branch and 1,000 First Republic employees without jobs.

“As we describe in our fact sheet and have stated previously, the current resolution planning process is inadequate and leaves Americans exposed to contagion and economic distress. Banking regulators have claimed to work on these issues for the past decade, yet the process still comes up short. In 2023, the banking regulators proposed rules that would revise and strengthen the resolution process, but have yet to implement any changes as a result of those proposals. Our banking regulators must find a way to reliably resolve banks without contagion and without turning to too-big-to-fail banks as the default option.”

You can read the fact sheet here.

###

Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.

Press Releases
Share

MEDIA REQUESTS

For media inquiries, please contact us at
press@bettermarkets.org or 202-618-6433.

Contact Us

For media inquiries, please contact press@bettermarkets.org or 202-618-6433.

To sign up for our email newsletter, please visit this page.

Name(Required)
This field is for validation purposes and should be left unchanged.

Sign Up — Stay Informed With Our Monthly Newsletter

"* (Required)" indicates required fields

This field is for validation purposes and should be left unchanged.

For media inquiries,

please contact press@bettermarkets.org or 202-618-6433.

Donate

Help us fight for the public interest in our financial markets, protecting Main Street from Wall Street and avoiding another costly financial collapse and economic crisis, by making a donation today.

Donate Today