JPMorgan Chase & Co (NYSE:JPM) agreed to settle with U.S. Office of the Comptroller of the Currency over alleged credit card debt collections.
In its consent order, the OCC said the biggest U.S. bank by assets was allegedly violating rules regarding collections practices, debt documents and sale of consumer credit-card debt.
The regulator alleged that the bank filed inaccurate sworn documents in court, and failed in its duties to properly review those documents besides not complying with a law providing special protections to members of the military. However, the OCC indicated it could fine the bank at a later date.
Though JPMorgan Chase & Co (NYSE:JPM) didn’t officially admit or deny the allegations as part of the legal settlement, the bank indicated the mistakes occurred in law suits filed to collect on defaulted credit cards, student loans, auto loans and some business accounts.
In its order, OCC indicated the unsafe or unsound practices identified by the OCC were most prevalent in JPMorgan Chase & Co (NYSE:JPM)’s consumer and community banking lines of business, including credit card services. The regulator also indicated the bank’s employees signed affidavits saying that they personally reviewed debt documents that were not based on such personal knowledge or review of the relevant books and records.
Review And Compensate Borrowers
The enforcement action requires JPMorgan Chase & Co (NYSE:JPM) to review the accounts of those customers affected by the mistakes, and to compensate those borrowers.
The regulator also faulted the bank for its non-compliance with the Service members Civil Relief Act which facilitates members of the military to postpone or suspend financial obligations such as outstanding credit card debt payments.
JPMorgan has been facing a series of probes from the U.S. Department of Justice, the Securities and Exchange Commission and other government agencies that are looking into subjects including energy trading, possible bribery in hiring practices in China and possible fraudulent sales of mortgage securities.
Earlier, the bank has been ordered to pay $920 million in fines for misconduct in the infamous London Whale scandal to government authorities in Washington and London. JPMorgan Chase & Co (NYSE:JPM) will pay around $300 million to the Comptroller’s office and around $200 million to other agencies.