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JPMorgan Chase: We're lending more, but not enough to brag about

June 16, 2011: 11:36 AM ET

After a management shake-up, JPMorgan's commercial bank chief Todd Maclin has new responsibilities at the firm. He talks about the economy, bank lending, and what it felt like to read he was about to lose his job.

Todd Maclin

JPMorgan's Todd Maclin

FORTUNE -- In the hierarchy of journalistic mistakes, there's pretty much none more morbid than the premature obituary. Just ask Steve Jobs. One that's more common, but probably no less startling to the subjects, is the premature career obituary. The newest recipient of such: JPMorgan Chase (JPM) commercial bank chief Todd Maclin, who has been with the bank for 32 years.

If you took a report from the Wall Street Journal at its word on June 6th, Maclin was on the verge of retiring. (Bloomberg committed a similar sin with its me-too article later that day.) They had the right company, but the wrong guy. A week later, retail financial services CEO Charlie Scharf stepped down from his position. And Maclin? His portfolio expanded dramatically—in addition to the commercial bank, he will now also oversee a large swath of the retail business, including the company's branch network, its consumer franchise, small business banking, and Chase's private client business.

Fortune caught up with Maclin this week to talk about he sees in the loan market, the economy, and what it feels like to join Mark Twain in reading a premature account of his own demise.

That was fast. For a second there, you were being put out to pasture. Now you've been handed additional responsibilities. How can you keep your head on straight?

Well, you try not to take yourself or what you read about yourself too seriously. But I was puzzled by the coverage. We put a new chief operating officer in the commercial bank last September, and I told Jamie that when he was ready to take over as CEO of the commercial bank, then I would be happy to step aside. But I also said I would be happy to do anything else Jamie wanted me to do at the bank. I certainly didn't say I was ready to retire. I suppose one reason they wrote it was that some thought that now we're in a relative time of peace that Jamie would start moving things around and making changes.

You're taking on new responsibilities with the branch network and small-business banking. Are you excited for the new challenges?

Look, I'm a field guy at heart. I travel two to three days a week. I like the front lines. And that's where I'm going to have to go to meet my new customers. I also have a great partner in Gordon Smith, who will oversee consumer lending. And of course we have Frank Bisignano, who will have the mortgage business. We're going to remain customer centric with great products and services.

There's this constant open question about whether the big banks are lending. Are you making more loans at the commercial bank? Do you plan to ramp up consumer lending?

We've certainly been lending. We're definitely taking market share. But it's nothing to brag about. We've had positive lending growth, but in the context of a pretty weak economy. The banks are just two years removed from the hell of being far too aggressive in our lending. We're healthier now, but you have to understand that when people go through tough losses it does change your risk appetite. Sure, there's a legitimate argument that people have to do reasonable and legitimate risk-taking. I say that's a fair point, but we're not back there yet. We're not quite back to equilibrium.

Jamie made news with his confrontation of Bernanke last week. A lot of people were taken aback by the sight of a big bank CEO complaining about tighter regulations after what we've just gone through. Do you really feel the banks are in a position to complain about anything?

I think the point he was trying to make was whether or not the people responsible for promoting the recovery were doing research on the effects of the rule changes. Limiting fees for some services, for example, is going to naturally change the risk/reward proposition. If I can't get paid for servicing riskier clients, I'm going to have a limit on the amount of credit I can extend to them.

Given your exposure to all sorts of businesses all over the country, what's your take on our economic situation right now?

I was feeling okay until about four weeks ago. Some customers are taking risk off the table all saying they had to cut back on expenses or staffing, and they're not adding new resources. The last few weeks have spooked them, especially with rising commodity costs. I just don't see what the spark is for job growth or plant expansion. People are feeling really uncertain. I hope it's a blip.

So tell us something positive.

Commercial real estate was in an incredible bubble in this country, and a lot of people suffered from things going the wrong way. As a result, though, we're finding great properties and some great opportunities to make loans. We're also starting to finance some new construction in Manhattan, Texas, and other places. The idea of being an apartment dweller, for example, has become much more palatable to people, so there's demand there, as well as with other kinds of rental properties. We're getting there. Everyone is adjusting to the new normal.

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About This Author
Duff McDonald
Duff McDonald
Contributing Editor, Fortune

Duff McDonald is a contributing editor at Fortune. He has also written for New York, Vanity Fair, Condé Nast Portfolio, GQ, WIRED, Time, Newsweek, and others. In 2004, he was the recipient of two Canadian National Magazine Awards -- best business story (gold) and best investigative reporting (silver) -- for "Conrad's Fall" in National Post Business. Last Man Standing, his biography of Jamie Dimon, chairman and CEO of JPMorgan Chase, was published by Simon & Schuster in October 2009. He is also the co-author, with Owen Burke, of The CEO, a satire.

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