JPMorgan to Pay $166 Million Over Debt-Collection Abuses

From GARP –

“JPMorgan Chase & Co. will pay $166 million and change credit-card collection practices after regulators found that the bank used abusive tactics to collect debts, the Consumer Financial Protection Bureau said on Wednesday.

The company agreed to resolve claims that its Chase Bank USA and Chase Bankcard Services Inc. units pursued the wrong borrowers, sought incorrect amounts or so-called zombie debt that was too old, or relied on documents with improper signatures, according to a CFPB statement.

Of the penalties, $136 million settles claims brought by the Consumer Bureau, 47 states and the District of Columbia. The Office of the Comptroller of the Currency imposed a $30 million penalty in a related action, CFPB said.”

Read more>>

Turmoil at JPMorgan

From Pacific Standard

“As the Federal Reserve Bank of New York moved to beef up its oversight of Wall Street two years ago, the team charged with supervising the nation’s largest bank, JPMorgan Chase, was in turmoil.

New York Fed examiners embedded at JPMorgan complained about being blocked from doing their jobs. In frustration, some requested transfers. Top New York Fed managers knew about the problems, according to interviews and secret recordings of internal meetings obtained by ProPublica. Similar frustrations had surfaced among examiners at other banks as well.”

read more>>

Madoff jailhouse interview used to bolster NY suit

From The Washington Post

“A new lawsuit against JPMorgan Chase & Co. relied on a jailhouse interview with Bernard Madoff to bolster claims that top executives at the nation’s largest bank for many years confronted Madoff about significant concerns in filings with a regulatory agency regarding his private investment business but always backed off because he earned the bank so much money.

In the lawsuit filed Thursday in Manhattan federal court, lawyers for two pension funds quoted Madoff from an in-person interview conducted last fall in Butner, N.C., where Madoff is serving a 150-year prison sentence, as well as telephone interviews conducted with him.”

read more>>

Operational risk management is NOT a joke

By Stanley Epstein, Principal Associate at Citadel Advantage

If you have been following the news these past few days you will have seen that JP Morgan is to pay a further $1.7 billion in fines under a deferred criminal prosecution agreement.

JP Morgan’s problem this time is for failing to catch Bernie Madoff’s Ponzi scheme as it managed his accounts. It wasn’t that Madoff was smarter than the bank – there were dozens of warning signs or “red flags”. The bank folk involved just didn’t take heed of what was before their eyes.

The bank has had to admit that it didn't have the risk management systems in place to catch Madoff and implement them. For the bank’s management this case is a catastrophe worse than the London Whale.

read more>>

Dimon: Road back to normal 'scary'

From CNN Money

JPMorgan Chase CEO Jamie Dimon says that 'as we go back to normal it's going to be scary' at the Fortune Global Forum in Chengdu, China.

Jamie Dimon's Next Big Challenges

“JPMorgan Chase shareholders have voted in favor of allowing Jamie Dimon to continue in his dual role as chairman and chief executive. However, Dimon emerges from the fight bruised and facing formidable challenges. They include troubles with several regulatory bodies, expected changes among his fellow directors and the question of how to replace a flood of executive departures and ready the bank for the day its leader steps down.”

watch video>>