By Pam Martens and Russ Martens: February 8, 2022 ~
As Wall Street On Parade, two trial lawyers, the U.S. Department of Justice, the Senate’s Permanent Subcommittee on Investigations and one of the bank’s former lawyers have suggested, the largest bank in the United States, JPMorgan Chase, has enshrined crime as a business model.
The man ultimately responsible for this business model is Jamie Dimon, the bank’s Chairman and CEO since December 31, 2006. Since 2014, JPMorgan Chase has the unprecedented distinction of admitting to five felony counts brought by the U.S. Department of Justice. In each case, it was given a deferred prosecution agreement and put on probation. (See a sampling of its Rap Sheet here.)
Now Dimon and the bank have come into the cross hairs of Senator Sherrod Brown, Chairman of the powerful Senate Banking Committee that oversees the megabanks on Wall Street.
Yesterday, Brown and five of his Democratic colleagues on the Senate Banking Committee sent Dimon a letter demanding answers regarding the bank’s credit card collection practices. The letter opens with this:
“We are deeply troubled by recent reports that JPMorgan Chase (‘Chase’) – the nation’s largest bank with over $3.2 trillion in assets – has renewed its predatory practice of robo-signing purported evidence of credit card debt to sue customers during the pandemic. We were concerned to hear that this practice has resumed after the January 1, 2020 expiration of Chase’s consent order with the Consumer Financial Protection Bureau (‘CFPB’ or Bureau). We request that Chase provide detailed information regarding the bank’s credit card debt collection practices. Chase should not utilize robo-signing in pursuing these debt collection suits, or any other debt.
“At the height of the robo-signing scandal following the 2008 financial crisis, the CFPB found that Chase wrongfully sued thousands of customers for debt they did not owe. As you know, ‘robo-signing’ is the practice where important documents are reviewed and signed by individuals with little to no knowledge about the case and proper procedures are not followed. From 2009 to 2013, the CFPB estimated that the error rate in robo-signing cases in which Chase obtained a judgement against consumers reached approximately 9 percent. In 2015, the CFPB issued a consent order prohibiting Chase from engaging in robo-signing and certain debt collections practices that were in violation of the Consumer Financial Protection Act. The consent order established that Chase’s practices harmed consumers by ‘subject[ing] certain consumers to collections activity for accounts that were not theirs, in amounts that were incorrect or uncollectable.’ Robo-signing enabled Chase to obtain judgments and collect from consumers based on ‘documents that were falsely sworn and that at times contained inaccurate amounts.’ The purpose of the consent order was ‘to ensure [Chase] do[es] not revive these practices.’ ”
The robo-signing reports come courtesy of a January 5 article written by Patrick Rucker and jointly published by Pro-Publica and The Capital Forum. That article revealed that “Today, just as it did before running afoul of the CFPB, Chase is mass-producing affidavits from the same San Antonio office where low-level employees generated hundreds of thousands of affidavits in the past, according to defense attorneys and court documents. Those affidavits are often the main piece of evidence that Chase uses to win its case while detailed customer records — and any errors they may contain — remain out of sight.”
The article goes on to explain that after Dimon publicly bemoaned wealth inequality in the United States, his bank brought thousands of consumer debt lawsuits last year after filing very few when it was under the CFPB’s consent order. The article’s author, Rucker, notes further that: “Those sued by Chase, then and now, might spot errors if the company provided full records in its court filings, consumer advocates say. Instead, Chase typically submits copies of a few credit card statements along with a two-page affidavit attesting that the bank’s records were accurate and complete.”
Taking the word of a five-count felon bank with a long history under Dimon of serial law-breaking is not something courts should be doing. The Rap Sheet we linked to above should be introduced into evidence to open the eyes of the judges that are presiding over these cases.
Senator Brown and his colleagues have given Dimon until February 21st to answer a list of questions in this matter. If the Senate Banking Committee wants to serve the public interest, it will call Dimon to testify under oath as to why it is the only U.S. bank with five felony counts notched in its belt and why it continues to thumb its nose at the law.
If the Senate Banking Committee limits its investigation to JPMorgan Chase’s consumer debt practices, it will be replicating the mistake made by the SEC when it ignored years of Harry Markopolos pounding on its door with evidence that Bernie Madoff was running a massive criminal enterprise.