UPDATE 2-Ten Chase banks hit with letter threats

(Updates with 10 banks hit, FBI confirms powder is harmless)

By Keith Coffman

DENVER, Oct 20 (Reuters) - Ten branches of Chase (JPM.N) bank in Colorado and Oklahoma received threatening letters on Monday, some containing a harmless white powder.

An FBI spokeswoman said seven banks in the Denver area got letters, along with three in Oklahoma.

"Based on our investigation, the suspicious substance appears to be non-hazardous," FBI spokeswoman Kathy Wright said. She did not identify the powder or elaborate on the nature of the threat.

A spokeswoman for Chase said the letters were delivered to branches in the Denver area and in Oklahoma City and Norman, Oklahoma.

Some of the envelopes contained the white powder, Chase spokeswoman Mary Jane Rogers said, and one employee was treated for a rash as a precaution.

She identified two suburban Denver branches as being in Lakewood and Arvada.

Kevin Ferry, a Denver area fire marshal, identified a third in Centennial. Several bank employees there were evaluated at a hospital and released, he said.

JPMorgan Chase & Co last week surpassed Citigroup Inc to became the largest U.S. bank, and has aggressively acquired other assets as the financial system has weakened, including the banking assets of Washington Mutual Inc.

Rogers said Chase would not release the total number of banks affected until they were sure all the letters had been found.

"We immediately called the FBI and Postal Inspection Service to handle the matter and ensure the safety of our customers and employees," Rogers said.

She said did not know the contents of the letters or if they contained return addresses. (Reporting by Dan Whitcomb and Steve Gorman; Editing by Doina Chiacu)