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Opinion
Matt Levine

JPMorgan Says Frank Was Fraud

Also SBF’s Substack and premium bond taxation.

Corrected

Programming note: Money Stuff will be off tomorrow and Monday, back on Tuesday.

In 2021, JPMorgan Chase & Co. paid $175 million to acquire Frank, a financial technology company that helps students fill out college financial aid forms. It is not obvious why this would be a lucrative business for JPMorgan, or Frank, but that was not really the point of the acquisition. The point of the acquisition is that helping students fill out college financial aid forms, while not itself lucrative, might help you build long-term financial relationships with them at an early and impressionable point in their lives. If Frank helps a student fill out her financial aid forms, she might like Frank, so when Frank emails her and says “hey now that you’re in college you should set up a checking account, here’s one,” she might open the checking account — at JPMorgan — that Frank recommends. Later, she might get her mortgage through a Frank recommendation. JPMorgan was buying Frank’s customer relationships, so that it could use them to sell financial products that were lucrative.