Years of coaxing, donating, explaining, and complaining hadn't helped the big banks reverse a rule that would restrict derivatives trading. This month, the $1.1 trillion spending bill Congress had to pass to keep the government open offered another chance. That's when Jamie Dimon, chief executive officer of JPMorgan Chase, stepped up to the plate.
Despite setbacks that would dim the power of most bankers, including a $13 billion settlement with regulators over mortgage bond sales last year, Mr. Dimon hasn't lost his touch. He visited Sen. Orrin Hatch, R-Utah, and House Financial Services Committee chairman Jeb Hensarling, R-Texas, according to a colleague who asked not to be named because the meetings were private. And he worked the phones, telling politicians the rule — which would have barred trading certain derivatives in parts of the bank that have government backstops such as deposit insurance — makes life expensive and unduly complicated for banks.
When the spending bill passed, it killed the provision Wall Street hated — and reaffirmed Mr. Dimon's status as its leading power broker. “Even if those people screw up demonstrably,” says Jared Bernstein, former chief economist to Vice President Joe Biden, “their influence doesn't seem to be dented much at all.”
Mr. Dimon became Wall Street's man in Washington after he steered his bank through the financial crisis without a loss. The past two years have been more complicated. In addition to the $13 billion settlement — then the largest in U.S. history — the bank paid $2.6 billion to resolve allegations that it didn't stop Bernard Madoff's Ponzi scheme and two fines of about $1 billion each stemming from currency rate manipulation and the London Whale trading loss.
News this month that JPMorgan may need more than $20 billion in additional capital to satisfy new bank safety rules didn't stop Mr. Dimon from helping to push through the derivatives rule repeal. “I think Jamie Dimon is Teflon-coated,” says former Sen. Ted Kaufman, the Delaware Democrat who co-sponsored a failed amendment to cap the size of banks.
It helps that Mr. Dimon runs America's biggest bank, which made $17.9 billion last year and $16.8 billion through the first nine months of 2014. JPMorgan spent more than any other bank on lobbying this year, and its employees and political action committees have been the biggest source of campaign contributions to Mr. Hensarling over his career. The largest bank in America doesn't need to pay to get its calls returned, says another colleague close to Mr. Dimon, who asked not to be identified discussing internal matters. When you're one of the largest employers in New York, he says, it's the politicians who call you.
Still, the bank doesn't want to be seen as throwing its weight around, Mr. Dimon has said. In October, after weeks of radiation and chemotherapy for throat cancer at Memorial Sloan Kettering Cancer Center in New York, he said in a talk called “Reflections on Resilient Leadership” that people are wrong to see Wall Street as a bunch of tough, greedy fighters. “We're more like lovers,” he said. “We want to compromise and get things done.”
Following its success in this battle, Wall Street plans to attack some of Dodd-Frank's hallmarks, including the
Consumer Financial Protection Bureau and increased oversight of institutions whose failure could threaten the financial system. “The Wall Street interests — the big banks — they're back,” says Dick Durbin of Illinois, the Senate's second-ranking Democrat. Jamie Dimon's back, too.
