Senators ask JPMorgan Chase to explain lawsuit against credit card customers

This story was published jointly with The Capitol Forum.

They said they were “deeply troubled by recent reports” that JPMorgan Chase has “renewed its predatory practice of robo-signing,” six Senate Democrats on Monday, Jamie Dimon, the company’s CEO, to provide “detailed information about the collection of the bank’s credit card debt”. practices.”

The letter, signed by five members of the Senate Banking Committee and its chairman, Senator Sherrod Brown of Ohio, cited a ProPublica and The Capitol Forum article that revealed how Chase had started an pending lawsuit against credit card customers in debt as the pandemic kicked in on the economy. to mistreat in early 2020.

Chase had stopped pursuing credit card lawsuits nearly a decade ago when regulators discovered that the bank’s legal paperwork was often flawed. At the time, Chase’s lawsuits did not include extensive billing information; they usually include a two-page affidavit signed by a Chase employee who swore the bank details were reliable.

Chase employees signed affidavits “without the signer’s personal knowledge, a practice commonly referred to as ‘robo-signing,'” the Consumer Financial Protection Bureau concluded in a consent warrant with Chase in 2015. Nearly 10% of lawsuits won by Chase , was for inflated totals and “contain erroneous amounts,” the CFPB noted. Chase neither gave nor denied the CFPB’s findings at the time, but agreed to provide “relevant information and documentation” in future lawsuits.

When the key terms of the CFPB settlement expired on New Year’s Day in 2020, Chase returned to suing credit card borrowers as before, according to consumer advocates and legal filings.

“Chase must not use robo-signing in pursuing these debt collection proceedings or any other debt,” the lawmakers’ letter said. In the letter, Dimon was asked to outline the steps the company is taking to verify the veracity of its claims. “How does Chase quality control affidavits?” the lawmakers asked. “Do these employees have personal knowledge of the case?”

The letter also asked Dimon to provide details about the company’s credit card business and their results, and was asked about Chase’s previous promises to provide hardships to customers during the pandemic. Finally, the letter noted the “extensive evidence about racial inequalities in debt collection” and asked what steps Chase has taken to ensure his debt collection practices don’t create these gaps.

Chase did not immediately respond to a request for comment. But in a statement to the earlier article by ProPublica and The Capitol Forum, Chase said the current system for processing credit card lawsuits is sound and reliable. “We check 100% of our affidavits for quality today,” the bank said. And, Chase said, “we will continue to comply with the clearance warrant requirements.”

Before the CFPB settlement, about half a dozen Chase employees, working from a single office in San Antonio, signed hundreds of thousands of affidavits. Today, Chase has about a dozen employees who mass produce affidavits from the same office using the same methods as in the past, according to Chase employees and outside attorneys who have represented the company.

Chase declined to say how many lawsuits it has filed in the past two years, but civil documents from across the country give a sense of the magnitude and accelerating pace. The company sued more than 800 credit card customers around Fort Lauderdale, Florida last year, after 70 in 2020 and none in 2019, according to a review of court files. In Houston, Chase filed more than 1,000 consumer debt lawsuits last year, after just seven lawsuits in 2020.

Lawmakers asked Dimon to respond to their letter before February 21.

Leave a Comment

Your email address will not be published.