Bad Boy Chase

Chase has been getting a lot of (well deserved) bad press lately, so much so that I can’t keep track.  Here is a quick primer.

It’s been accused by the Office of the Comptroller of the Currency, a group of 13 states, and now Massachusetts is investigating it for its debt collection practices (WSJ: Massachusetts Propse J.P. Morgan’s Debt-Collection Practices, 9/22/13).

The OCC said the bank and its outside lawyers allegedly filed inaccurate documents in court, didn’t properly notarize documents and made statements about the accuracy of documents that hadn’t been verified. The regulator ordered the bank to notify consumers in the future when their debt was being sold to a third party, to properly maintain account documents and to ensure employees and other staff involved in litigation had required information.

In May of this year California also accused Chase of bad debt collection practices.

California filed a lawsuit in May accusing J.P. Morgan of “fraudulent” and “unlawful” methods in its pursuit of old debts from 100,000 borrowers in the state. The bank hasn’t commented on that suit, which is pending.

Among the practices in question is pursuing people for debts after they filed for bankruptcy (and presumably lying to them that they were still responsible for the debt when actually they were not).

Chase also agreed this week to pay an $80 million fine over allegations related to products sold to credit-card holders (WSJ: J.P. Morgan Settles Consumer Cases, 9/19/13).

Then lets not forget the London Whale fiasco (Wikipedia), a failed effort to pursue huge profits through proprietary trading (trading for their own, not customers, good).  Given how much Chase seems to be into lines of business that line their own pockets, one has to wonder if they even come close to honoring the fiduciary responsibility they have to their customers.  Regulators have since lambasted Chase’s senior management (WSJ: SEC Calls Out JP Morgan Management More than 100 Times, 9/19/13) for a lack of internal controls (they did whatever they wanted).  Jamie Dimon seems to have basically lied when he initially announced the London Whale losses, claiming they were only $2 billion.  In the end they were over $6 billion.

Back in July it became apparent that JP Morgan Chase was one of the bank responsible for hoarding commodities to drive up prices (JPMorgan to quit physical commodity trade amid scrutiny 7/26/13).

Most recently the group’s investment in warehousing firm Henry Bath has been attacked by metals consumers for distorting markets and driving up prices. The Department of Justice and the U.S. Commodity Futures Trading Commission have also both launched probes into metal warehousing.

If that isn’t enough, they are also accused of manipulating the power market (Enron anyone?) and have a greed to pay a $410 million fine (JPMorgan Accused of Energy-Market Manipulation by U.S. Agency, 7/29/13).

The FERC staff said in today’s allegations, announced by e-mail, that the bank’s energy-trading unit was involved in five market-gaming strategies in California from September 2010 to June 2011. The company engaged in three gaming strategies in the Midwest from October 2010 to May 2011, the staff said.

Wonder why your electric bill is so high? Among other things, blame Chase.

Still think your money is safe with Chase?  Think again. They don’t care about little banking customers, they are all about the big profits for themselves.

Chase cash-out refinance but money not available

Here is a letter I sent Dimon (names omitted).

July 31, 3013

Dear Mr. Dimon,

We closed one week ago today, July 24th, on a refinance of our mortgage. We have yet received one penny of the cash out we were due and it looks as if we won’t be receiving it anytime soon. The incompetence of Chase Mortgage and Title Source, Inc. are going to cause us to default on a contract to buy another property and cost us thousands of dollars.

I have just filed a complaint against Chase Mortgage with Jeff Atwater, Chief Financial Officer of Florida.

This refinance has been going on since June 10th, seven and one half weeks! We have had our mortgage with Chase for nearly 16 years and have never been late on a payment. We have excellent credit ratings.

This process has been has been insane. Progress was held up for a week or more at one point because someone in the chain of command wanted to know why my husband moved out of the house he shared with his ex-wife 26 years ago! The scrutiny we were put through was crazy and went on for so long.

Finally, we reached closing last week and thought we had at last, reached the finish line. Then we were told there was a 72 hour right of rescission on refinances. I wish they had told us earlier in the process so we could have planned accordingly.

We waited the 72 (business) hours. On Monday, July 29, the mortgage banker, ___ ___ called and said the money should be in the bank and if it wasn’t, it should be there by the close of banking hours on that day. It wasn’t. It still wasn’t there on Tuesday.

On Tuesday afternoon I started looking for our money. I called the bank and Mr. ___ was in training all day and the bank manager is on vacation. Fortunately, the girl I spoke with told me the money had been transferred to Title Source on Monday. I called them and spoke with someone named ___. Ironically, her title is “Delay Analyst.” I don’t know if that means she tries to figure out ways to delay payment but that is what happened in this case.

It seems we forgot to sign a document stating that we lived in the house – the same house we have lived in and which has been financed by Chase for the past 16 years!

Will you please see if you can get us our money? I’m sure we are paying interest on it already and would love to have use of it.

Chase loan mods still not working

I recently “completed” a modification program but when I tried to schedule my August payment I was told the system would not allow a payment…so none of the agents would take it. I was promised a call-back IF they could figure out how to override the system. You numbers are not current so I did more research and found this: Media contact: Chase,  Amy Bonitatibus, 614-601-0340,

JP Morgan Chase limits employee’s personal trading activity

JPMC recently sent an internal memo to all employees stating they can no longer buy or sell stocks (jpmc stock or any other) in their own personal (non-jpmc related) portfolio except from a jpmc pre-approved list of designated brokers. Same applies to employee’s spouse, significant other or any person that employee is financially caring for.

Also, stocks cannot be sold for 30 days after purchase, even if stock owner witnesses stock in rapid loss decline.

Also, ALL personal stocks purchases and sales (even non-JPMC stock) must be pre-approved by JPMorgan Chase.

All of this forces employees to move their existing portfolios to an approved trading company so that jpmc can monitor all trading activity even that of non-jpmc stocks.

Chase and Free Checking

In 2011/2012 as the government was implementing a number of policies that affected banks, (like limiting what banks could charge merchants for debit card charge processing), most banks complained that the hit to profits would force them to no longer offer free checking, and they changed their policies so that many if not most customers were no longer eligible for free checking accounts.  Chase of course was one of the first and worst to do this.

Fast forward to today.  Chase’s last fiscal year included record profits of $20 billion, about half of which CAME FROM RETAIL BANKING.  So it would seem that Chase is doing just fine and could be offering free checking just like they used to.

Remember, you are giving a bank your money to play with while you aren’t using it.  This is how they get much of their capital to fund loans and to do their own proprietary trading activities (i.e. London Whale).  If a bank wants you to pay for the privilege of allowing them to use your money, it is time to find another bank.

How Chase treats its employees

From a reader.

I’ve been working for JPMC for numerous years and, after every business trip I am asked take, my expense report is scrutinized by upper management with the end result being many of my LEGITIMATE expenses (according to current company policy) getting DENIED. This, in turn, results in me having to pay for the denied single-persom meals and other modest expenses out of my pay.

I checked the board of labor and similar websites, including JPMorganChase site, and they all agree that the expenses I incurred are legitimate and eligible for reimbursement. But, because a particular JPMC executive whose initials are EZ feels like it, the expenses in question are denied. While not an exec, I do hold an important position and title with the firm. Yet, after countless discussions with management above me, the spineless cowards refuse to question why EZ is denying something that ALL AGREE is counter to written expense policy. I can’t refuse to go on these trips, without putting my job at risk. And EZ knows this as well.

Clearly JPMC bullies their employees, even over trivial and modest expense reports. This place truly is getting worse with each passing year.

Chase on Gov’s sh*t list

It seems that JP Morgan Chase has gone from government darling to heavy regulatory scrutiny since the London Whale incident, as this article from the Wall Street Journal shows (J.P Morgan Under Regulatory Fire, WSJ 5/3/13).

Burned customers have known for years that Chase isn’t the prim and proper corporate citizen it claims to be (just read this blog for many many infractions against customers).  Among the concerns:

Regulators also presented Mr. Dimon and the board with an annual report card that was critical of compliance, audit and risk …

That covers pretty much everything an investment bank does.  Some of the specifics they are accused of are:

The Federal Energy Regulatory Commission has served J.P. Morgan with a Wells notice accusing the bank of misrepresenting prices of electricity contracts with California and Michigan that resulted in over payments. It also alleges commodities chief Blythe Masters and three other traders had false representations under oath about trading schemes and the strategies behind the schemes.

Regulators are also examining whether customers were charged for services but didn’t receive the actual benefit and whether the bank provided adequate warnings about the fraud of Bernard Madoff, said people familiar with the bank’s discussions with regulators. J.P. Morgan and the OCC declined to comment.

Some good news for Chase customers as regulators appear poised to increase scrutiny of Chase’s consumer banking:

Regulators are making it harder for J.P. Morgan to enter new markets or introduce new products, and they are preparing to hit the bank with more enforcement actions highlighting past missteps in the bank’s consumer operations.

It seems that Chase has irked regulators by blowing them off in the past.

Regulators emphasized their lack of trust in management and their view that past guidance had not been heeded.


Chase class action for same-day credit card deposits

The Law Offices of Napoli Bern Ripka Shkolnik, LLP, Hanly Conroy Bierstein Sheridan Fish & Hayes LLP, and Katz & Kern LLP have filed a class action complaint against JPMorgan Chase & Co. The complaint alleges various causes of actions arising from defendants’ failure to honor its “Same Day Payment Guarantee” whereby defendants promised that payments made on-line from a Chase deposit account to a Chase credit card account would be credited on the same day. However, the plaintiffs allege that the payments were not credited on the same day.

More info here.

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