NEW YORK (

TheStreet

) --

JPMorgan Chase

(JPM) - Get Report

should get rid of its consumer finance business, says Richard Bove, the outspoken bank sector analyst.

Bove, an analyst at Rochdale Securities who rates JPMorgan at buy, says in a research note to clients on Tuesday that the large financial institution should sell its consumer finance business as Congressional reform, revenue pressure and lack of significant growth long term does not make this business appealing.

"The direction of this company would seem to be in direct confrontation with the Congressional vision of where the banking industry should go," Bove writes.

"The bank wants to grow. It sees opportunities to capture market share domestically and grow meaningfully overseas. It sees itself becoming much bigger over time," the note says. "Congress does not want big banks in this country. Under the mantra that no bank will ever again be too big to fail, Congress is establishing mechanisms that would force banks like JPMorgan Chase to shrink or at the very least cap its assets at their current size. This is a battle JPMorgan cannot win."

JPMorgan Chase is arguably one of the best performing banks in the country and showed its feathers during the financial crisis of the last few years. It was able to make two fire sale acquisitions of Bear Stearns and Washington Mutual. It was one of the first large banks to repurchase preferred stock owned by the U.S. Treasury under the Troubled Asset Relief Program.

But record high unemployment levels faced by consumers hit its credit card arm hard. The unit recorded a loss last year and is expected to post a loss through at least the first half of 2010. The credit card reform enacted last month will further hurt the business.

Bove suggests that the large institution cleave itself from its main troubled area because of "near-term forced changes in structure, intermediate-term losses and long-term lack of appealing secular growth."

"JPMorgan Chase is subject to the basic problem facing all conglomerates," Bove writes in a note. "It must protect the failing businesses in its portfolio by diverting funds form the profitable businesses. Because it operates so many businesses, it only experiences short periods in which they are all operating at peak performance. It is far more normal for some sector to bring down the profits of the whole."

JPMorgan shares were rising 1.7% to $44.48 on Tuesday. The stock has come back strong in recent weeks, after hitting a low of $37.70 on Feb. 8. Shares are up 16% since then. JPMorgan shares have nearly doubled from its 52-week low of $24.78 on March 30.

--Written by Laurie Kulikowski in New York.