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Saturday, October 19, 2013
Russia ViewPoint Of Chase Change Of Rules On Wire Transfers
From The Voice of Russia:
JP Morgan Chase to limit cash withdrawals, prohibit all outgoing international bank wires, bank officials say
Photo: EPA
In an apparent effort to front-run official government capital controls, JP Morgan Chase has issued letters to all its business account holders notifying them that as of November, 17 the bank will limit all cash transactions (including deposits, withdrawals, and ATM usage) to $50,000 per month, and will prohibit all outgoing international bank wires. JP Morgan Chase later disclaimed, however, that the news that the bank is exerting new capital controls on certain bank accounts are an overreaction to a "streamlining" and "derisking" process.
Chase Bank has moved to limit cash withdrawals while banning business customers from sending international wire transfers causing speculation that the bank is preparing for a looming financial crisis in the United States by imposing capital controls.Bank officials confirmed Wednesday that the new capital limits apply to all business account holders, the bank will stop processing any outgoing international bank wire, and that any monthly cash transactions in excess of the new $50,000 limit will be subject to penalties and fees.
JP Morgan has been broken down by an enormous fine as it works to clear up the mess created by the London Whale trading scandal.
The bank will pay $100 million to the US Commodity Futures Trading Commission, conceding "reckless" behavior led to the trading debacle that generated about $6 billion in losses.
Last month the investment giant agreed to pay about $920 million in penalties to US and UK regulators to settle charges over the London Whale trades.
In later reports, JP Morgan Chase said news reports circulating on the Internet that the bank is exerting new capital controls on certain bank accounts are an overreaction to a "streamlining" and "derisking" process.
The bank has sent letters to certain customers saying they will be unable to send and receive domestic and international wire transfers, and "cash activity" will be limited to $50,000 per statement cycle, including cash deposits, night drops, and ATM and cash withdrawals.
"These changes will help us more efficiently manage the risks involved with these types of transactions," one letter reads.
The fear is small and medium-sized businesses could be hurt by the restrictions. But the bank says these were typically mass accounts opened on the Internet, with no bank representative managing them, where domestic or international wire transfers could be sent without bank oversight.
The bank says it is "derisking" these accounts by streamlining the number of customer accounts from, say, six accounts with no bank contact or representative to three accounts with a bank rep managing them. Also the bank said some of the accounts customers had signed up for did not have wire transfer services that customers had wanted, or had limited withdrawal services, but that the bank is instead transferring these customers into new accounts that do provide these services.
Chase said it is not exerting new capital controls on customer accounts.
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