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"Following consultation with our regulators, we are processing this transaction," the bank said in a statement.
The move highlights the intense scrutiny with which regulators have been monitoring JPMorgan—and the close cooperation it has sought with them at present—especially where payment processing is concerned. An August internal memo detailed a strict review in the bank's Treasury Services unit, bringing tight scrutiny to dollar-denominated transactions by foreign banks. If the bank wanted to add any new clients to that unit, it would need approval from the Office of the Comptroller of the Currency.
That general scrutiny over payments has extended into some areas that have nothing to do with geopolitics. In March, the bank declined to allow a New York-based start-up, Lovability, to use its Chase Paymentech platform to process customer payments.
Lovability makes female-friendly condoms. The company was started by New York University graduate Tiffany Gaines, who sought to destigmatize the product. Gaines has checking accounts with Chase for her personal and small business use, but was disappointed, after several calls with the bank, to learn that it refused her customers.
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"They said processing sales for adult-oriented products is a prohibited vertical," Gaines told CNBC. "She said she would double check with the risk management department, but came back again with the same answer."
Gaines posted a petition to Change.org and quickly garnered more than 4,000 signatures—prompting a response from the chief marketing officer of Chase Paymentech, which reversed its decision.
In a statement, JP Morgan said: "We have reached out to Ms. Gaines, apologized for the misinformation that we originally provided to her, and offered to process payments for her business. Chase Paymentech processes payments for a wide variety of merchants, including grocers and drug stores, that sell similar products."
(Not to mention, the investment bank has for years been underwriting stock and bond deals for Church & Dwight, the maker of Trojan condoms.)
Gaines said she didn't just want Chase to accept her business as a client but wanted to make sure condoms as a category did not remain forbidden.
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"They told me Chase is a federally regulated bank, and it didn't have the ability to say what products are in the 'prohibited' category," Gaines said.
Since the petition went live, several other banks—from local credit unions to Citigroup—have shown Lovability some love. and to provide the services she needs. Gaines has been using Paypal in the meantime. She doesn't want to move all her accounts to another bank, but admits, "I don't feel comfortable until this is a 100 percent non-issue."
Another group got an outright rejection from JPMorgan Chase in recent months: the Sigma Alpha Epsilon fraternity. JP Morgan Asset Management informed the Sigma Alpha Epsilon Foundation that it would no longer do business with the fraternity, citing its bad publicity over allegations of hazing, according to SAE.
The bank declined a CNBC request for comment about the fraternity.
Brad Cohen, the fraternity's national president, said the foundation informed him on March 7 of the decision, which could have even greater consequences. "If JPMorgan could drop us," Cohen told CNBC, "universities could be next." To begin fixing the problem, SAE said last month it would eliminate all pledge programs from the organization.
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The portfolio held with JPMorgan, according to Cohen, was not used to actively manage money but to monetize stock gifts for the foundation, which would then use the proceeds for awards within the organization. Cohen said the foundation has an array of money managers that it works with, but that the decision by JP Morgan was "surprising."
Cohen admitted that SAE's less-than-sterling reputation is a work in progress, at the national and chapter level, but said the foundation runs as a separate entity. "It's ironic JP did what they did to a foundation that [provides] scholarships and education grants and has absolutely nothing to do with the fraternity's operations."
As JP Morgan has made clear, managing regulators and reputation is an all-or-nothing battle.
—By CNBC's Kayla Tausche.