"JPMorgan Chase has a robust and well-established process to evaluate the sectors that we serve," the bank said in a statement to the South Florida Business Journal. "As part of this process, we will no longer bank the private prison industry."
JPMorgan and Wells Fargo are a just two of several US banks that have provided underwritten bonds or syndicated groups to private prison operators in the US, including CoreCivic Inc and Geo Group Inc, privately-run prison companies that each donated $250,000 to US President Donald Trump's inauguration.
In January, Wells Fargo also announced that it would reduce its financial ties to prison operators.
"Our credit exposure to private prison companies has significantly decreased and is expected to continue to decline, and we are not actively marketing to that sector," Wells Fargo wrote in its 2018 "Business Standards Report."
Private prisons and detention center operators have been in the spotlight after recent revelations that the industry received more than $1 billion worth of federal Immigration Customs and Enforcement (ICE) contracts in 2017, South Florida Business Journal reported.
JPMorgan's decision comes about a week after Rep. Alexandria Ocasio-Cortez (D-NY), a member of the US House Financial Services Committee, urged for oversight hearings for US banks regarding their investments in America's private prison industry.
"We're going to hold oversight hearings to make these banks accountable for investing in and making money off of the detention of immigrants," Ocasio-Cortez said at an event last week in New York hosted by nonprofit Make the Road New York, Bloomberg reported. "Because it's wrong."
After Trump's executive order to detain undocumented families together in June 2018, CoreCivic and Geo Group saw an increase in their share prices. In addition, stocks of both companies rose after Trump became president and rescinded the Obama administration's August 2016 directive to the Bureau of Prisons to phase out the federal use of private prisons, NBC News reported.
Following the JPMorgan decision, a Geo Group spokesperson told media outlets that the decision was politically motivated.
"They [JPMorgan] also willfully ignore the fact that our company plays absolutely no role in passing, setting, or advocating for or against criminal justice or immigration laws and policies," the spokesperson said.
A poorly-reported 2018 national prison strike across America came about as a result of multiple for-profit privately-run prisons in the United States coming under fire for bad-faith tactics including poor health care services, usurious internal phone use charges and unhealthy food.
