Jamie Dimon said the U.S. economy is headed for a “bad recession” in the wake of the coronavirus pandemic, but this time around his company is not going to need a bailout. Instead, JPMorgan Chase is ready to lend a hand to struggling consumers and small businesses.
“At a minimum, we assume that it will include a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008,” Dimon, the CEO of JPMorgan Chase, said Monday in his annual letter to shareholders. “We have the resources to emerge from this crisis as a stronger country.”
JPMorgan, largest U.S. bank by assets, won’t ask for regulatory relief, Dimon said. It’s instead working closely with the government and will participate in relief programs to address the severe economic challenges that borrowers face.
The bank is providing a 90-day grace period for mortgage and auto loan or lease payments. It is also removing minimum payment requirements on credit cards. Payment deferrals, such as late payments to credit bureaus for up-to-date clients, won’t be reported. It will also wave or refund some fees, including early withdrawal fees on certificates of deposit.
Dimon said the bank is also stepping up efforts to help small businesses that have been heavily disrupted by the crisis. About 50% of small businesses have less than 15 cash buffer days, according to research from the JPMorgan Chase Institute.
To support businesses during the pandemic, the bank is extending credit to businesses of all sizes for working capital and general corporate purposes. In the past 60 days, it has extended $950 million in new loans to small businesses, he said. The bank is waiving and refunding fees for businesses in need.
To be sure, Dimon warned the bank may have to consider whether to suspend its dividend if the economy reaches “extremely adverse” conditions.
“The country was not adequately prepared for this pandemic – however, we can and should be more prepared for what comes next,” Dimon said. “Done right, a disciplined transition would maximize the health of Americans and minimize the time, extent and suffering caused by the economic downturn.”
The letter comes as airliners, among the hardest-hit industries by the virus, face a crippling cash squeeze following a steep drop in air travel demand. Several U.S. airlines including American Airlines, Delta Air Lines, JetBlue and United applied for government aid Friday in exchange for not furloughing workers or cutting pay rates through Sept. 30.