FARGO — Tuesday was a day of firsts for both JPMorgan Chase and its CEO, Jamie Dimon.
For one, Chase Bank became the first bank in the United States to have branches in each of the contiguous 48 states, opening the first of a trio of branches planned for Fargo.
For Dimon, the occasion marked his first visit to North Dakota, the only state in the country he hadn’t ever visited.
“I’ve waited 20 years to open a branch in North Dakota,” Dimon said Tuesday, Aug. 3, on his first visit to the Peace Garden State. “It’s a total, wonderful thrill to be here.”
Dimon, who has been the CEO of JPMorgan Chase since 2005, told The Forum it has long been a goal to bring Chase Bank to every state. “In 2018, many years after the merger of Bank One with JPMorgan and the acquisition of Washington Mutual, we were still only in 23 states,” he said. “I’ve always had an idea that we would expand into all states.”
In 2018, JPMorgan Chase announced plans to open 400 new branches across the United States with a focus on the Washington, D.C. area. According to a June Reuters report, the nation’s largest bank is halfway to that goal, with Fargo’s new branches among the latest additions.
Nationwide banks like Chase didn’t always exist, Dimon noted. “The only reason it wasn’t national is because of laws many, many years ago that didn’t allow banks to operate in multiple states,” he explained. “For a while, the government didn’t want us to expand.”
The McFadden Act, which Pres. Calvin Coolidge signed into law in 1927, expressly forbade interstate banking. That changed nearly 70 years later in 1994 when Pres. Bill Clinton signed the Riegle-Neal Act, allowing banks to acquire financial institutions from other states and construct branches in other states. “The second we got the green-light from the government, we decided to go into all the remaining states,” Dimon remarked. “This summer we’re going to be in the 48 continental states.”
Still, large national banks faced expansion hurdles following the Great Recession. As Dimon was taking questions to a group of employees Tuesday at the branch’s opening ceremony, North Dakota State Treasurer Thomas Beadle asked why Chase Bank didn’t enter the state sooner. “The federal government of the United States,” Dimon replied. “I started talking about this in 2007, then the crisis hit and they didn’t want banks to grow.”
“That’s a microcosm of why the economy has lost growth in the past 20 years,” Dimon continued. “We keep on throwing sand in the gears of the great American economy.”
'The full force of JPMorgan'
Fargo’s Chase Bank features a sleek, modern design, which Dimon said is a hallmark of modern banks. The branch boasts an open floor plan, bright LED lighting and private consultation areas for clients to receive advice on financial matters.
Gone are the days of walled-off bank tellers behind glass and bars, Dimon said. “Today, it’s a much more open format. There will still be teller lines, but the bankers will be out in the middle,” he said. “They tend to greet clients as they come in. There will be a couple of private offices if someone wants to talk about investments or mortgages.”
Despite the increased use of digital banking technology, Dimon said a physical branch offers invaluable resources for clients, particularly when it comes to receiving investment or mortgage advice. “People still need, if you’re a small business, to drop off coins and currency, people need things to be signed, they need advice around investments, mortgages and growing your small business,” he remarked. “Those branches become part of the community that give that kind of advice.”
A physical branch also allows Chase Bank to service its existing North Dakota customers in person. “If you think of us in Fargo, we already do mortgages, credit cards and middle-market lending there, so putting a physical branch in the ground was a physical manifestation of that,” Dimon said.
Additionally, a physical depository allows the bank to engage in more business with government and not-for-profit accounts as well as increase its lending. “Even if we’re not there, it helps us bank more in that we can provide services that don’t need retail branches like loans to hospitals,” Dimon explained. “We do have a lot of services provided that aren’t in the physical branch, but having the physical branch allows it.”
Overall, bringing Chase Bank to North Dakota opens the door for JPMorgan Chase to "bring the full force of JPMorgan" to the state. “It just enables us to bank all of North Dakota and get our brand out there,” Dimon commented. "Once we’re there, you’re going to get consumer banking, business banking for small businesses, more middle-market lending, payment services, government and not-for-profit.”
'A lot of investment'
The COVID-19 pandemic had little impact on opening new branches, Dimon said. He added that 80% of branches remained open during the pandemic and that Chase’s plans to open new branches are “still pretty much on schedule.”
“Almost none. You’d be surprised,” Dimon said when discussing to what degree COVID-19 hampered branch development. “People forget that in America, a lot of people still went to work every day,” he added. “The world didn’t stop working.”
A new branch can carry an average price tag of $2 million, money which is spent with local contractors and vendors, Dimon said. The number of new jobs created can add up quickly as well. “It’s a lot of investment. For America, those 200 branches are two- or three-thousand employees,” he noted. “That’s a lot of people employed.”
Dimon expressed excitement with respect to bringing Chase Bank to the Fargo-Moorhead area. Two more branches are planned to open this year in Fargo, one in downtown Fargo and a second at 3140 25th St. S., the former Village Inn location.
He said it remains to be see whether more Chase Banks will come to Fargo or other North Dakota cities. “We don’t know yet, but when we start, we tend to continue. As economies grow, we tend to grow with the economies, so when there are needs for branches, we tend to do that,” he said.
For now, Dimon was satisfied with visiting his final state and bringing Chase Bank to its 48th. “When we go in, we bring all of Chase, so we’ll be a part of that community,” he concluded. “Hopefully people say, ‘It’s great having them here.’”