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.

Finally, Chase may have to compensate the people they screwed

From the Wall Street Journal.

U.S. Sets Rules for Foreclosure Compensation

By ALAN ZIBEL

WASHINGTON—Banks could be forced to pay as much as $125,000 per customer to compensate borrowers who were subject to foreclosure-processing errors.

More than a year after finding widespread abuses in the industry, banking regulators unveiled a plan Thursday to compensate borrowers for a wide variety of errors, including starting foreclosure for a borrower who wasn’t in default, denying loan assistance in error, making a mistake on a loan modification and wrongfully foreclosing on a member of the military.

A foreclosed home on Pine Island in Lee County, Fla., in November 2010.

Banks have set aside vast amounts of money for foreclosure-related liabilities, said banking analyst Nancy Bush at SNL Financial. “This would just be an additional drop in the bucket,” she said.

Many borrowers with foreclosure errors may not see any money. Only about 194,000 of 4.4 million borrowers sent letters last year have requested a review of their cases to date. Separately, independent consultants are doing reviews of about 145,000 consumers’ files.

The compensation plan is separate from a $25 billion foreclosure-abuse settlement that federal and state officials announced earlier this year. That settlement covered the nation’s five largest mortgage-servicing firms: Bank of America Corp., BAC +1.53% Wells Fargo WFC +1.45% & Co., J.P. Morgan Chase JPM +1.35% & Co., Citigroup Inc. C +0.57% and Ally Financial Inc..

The Financial Services Roundtable’s Housing Policy Council, which represents banks subject to the review, called the regulators’ action “an important step toward completion” of the foreclosure review process.

The national servicing settlement includes $1.5 billion in cash payments, or up to $2,000 per borrower, for homeowners who went through foreclosure between September 2008 and December 2011. That was a different approach from bank regulators, who required banks to hire independent consultants who are undertaking a more detailed review of each consumer’s case.

The biggest awards under the rules announced by the Federal Reserve and Office of the Comptroller of the Currency, would be $125,000 per consumer. Those awards would go to consumers who lost their home without defaulting on their mortgage. Banks also must pay that same fine if they violated a federal law preventing foreclosures on the military or foreclosed on a homeowner enrolled in a loan modification plan.

Smaller awards would go to consumers who had other kinds of violations. Consumers whose applications for loan modifications were improperly denied are in line for up to $15,000. Those who were never solicited for loan help as required under federal programs are eligible for up to $1,000.

Borrowers are likely to face a tough burden of proof for the larger awards, said David Dunn, a lawyer who represents banks at law firm Hogan Lovells,

Blog for Seattle’s “Chase 5”

The Chase occupation in Seattle in November 2011 resulted in 5 arrests.  You can follow the plight of the 5 arrestees on their blog.

Chase credit card minimum payment class action lawsuit

The court has approved class action status for a lawsuit alleging that Chase improperly violated customer credit card terms when they raised the minimum payment for some customers from 2% of the outstanding balance to 5%.

You can find more information on this lawsuit here.

Chase settles Freedom card payment protection scheme case

I knew Chase was bad, but this is BAD.  Chase recently settled a class-action lawsuit related to the payment protection plan for its Chase Freedom Card.  Apparently it automatically enrolled people in this plan that came with a monthly charge, and then made it nearly impossible to get the benefits.

… the lawsuit alleges that Chase unilaterally enrolled cardholders in Payment Protection Products that suspend or cancel the balance due on the credit card under certain circumstances without adequately disclosing the terms of these products prior to enrolling a customer. The lawsuit further alleges that it was too difficult to obtain Payment Protection benefits for eligible claims, it was too difficult to disenroll from Payment Protection Products, and that those Products were improperly marketed and sold.

Are there any laws Chase won’t break?

Another week, another settlement between Chase and some arm of the government for laws that Chase has violated.  The latest $83.3 million settlement is for “violating regulations that prohibit lending money for entities linked to countries engaged in illicit nuclear trade and that cover dealings with Cuba and Sudan.”

Chase incorrectly claims woman is dead

Just when you thought you knew all the ways that Chase could possibly screw up someones life, they come up with a new one, claiming you are dead.  God only knows what possessed Chase to claim this woman was dead when she was in fact very much alive.

SANFORD, Florida– A Florida woman says she’s having numerous financial troubles because of a bank error that caused Chase Bank USA to declare her dead last November.

Wrenella Pierre has filed a lawsuit and Chase officials said Monday they’re investigating how the mistake happened.

When Pierre and her husband built their home in 2007, they got two mortgages through Chase.
According to the lawsuit, the bank notified credit-reporting agencies last year that Pierre had died. They sent a letter of condolence to the family, saying someone from the bank would be in touch about the mortgage.

Pierre says she notified bank officials that she was alive and also went to a local branch to correct the mistake.

A month later, the lawsuit alleges, credit agencies still reported her dead.

JPMorgan Chase guilty (again) of fraud

There are quite a few cases of alleged or admitted fraud that JPMorgan Chase has been involved in recently I’m losing count.  Well here is another one (Wall Street Journal, JPMorgan Settles Muni-Bid Case, 7/8/11).  Does this bank have an ethical bone in its body?

J.P. Morgan Chase & Co. agreed to a $228 million settlement to charges it rigged nearly 100 transactions involving municipal-bond auctions, federal and state authorities said.

It is the third, and largest, settlement reached with a bank in a continuing investigation into an alleged nationwide conspiracy to rig municipal-bond bidding processes. Banks bid for the business to invest the proceeds municipalities raise by selling bonds. Last year, Bank of America Corp. agreed to pay $137 million and in May, UBS AG agreed to pay $160.2 million.

The Securities and Exchange Commission, in a civil lawsuit, alleged that J.P. Morgan, the nation’s second largest by assets, manipulated the bidding process from 1997 to 2005. The SEC said agents handling the auctions gave J.P. Morgan a “last look” at all the bids, thereby allowing J.P. Morgan to win the auctions. The SEC complaint also alleged J.P. Morgan submitted intentionally losing bids to allow other banks to win auctions, and steered business to the agents that rigged the bids. The SEC said the rigging happened on at least 93 transactions in 31 states.

The New York-based bank said in a statement that it does not “tolerate anticompetitive activity or violations of law” and that the investigation focused on “a small desk that was discontinued.” The bank also pointed out that the employees, who are no longer at the bank, hid their actions from management.

J.P. Morgan said the net total it would pay was $211.2 million: $51.2 million to the SEC; $50 million to the Internal Revenue Service; $35 million to the Office of the Comptroller of the Currency; and $75 million to the states involved. The bank said the payments wouldn’t materially affect its earnings.

There are concurrent court settlements with the various parties involved and there is some overlap, so while the agreement with the states is actually for $92 million, $17 million of that will go to other agencies, said Susan E. Kinsman, a spokeswoman for Connecticut State Attorney General George Jepsen, who headed the investigations for the states.

It is the second settlement J.P. Morgan has reached with the SEC in just over two weeks. In late June, the bank agreed to pay $153.6 million to settle charges its employees aggressively sold a complex debt security while failing to inform the investors about certain material facts.

The muni-auction settlements also included enforcement actions from the Federal Reserve and the OCC demanding that the bank increase its risk compliance management.

Federal tax laws require proceeds of municipal-bond sales to be invested at fair-market value. Bidding agents typically organize a process in which banks compete on bids for the investment business in order to ensure the fair-market-value test is met.

The Justice Department has identified more than a dozen banks as alleged co-conspirators in the bid-rigging probe.

However, federal and state agencies allege widespread collusion between the bidding agents and big banks corrupted the process across dozens of states during the late 1990s and first half of the 2000s. The Justice Department has identified more than a dozen banks as alleged co-conspirators. To date, 18 people have been charged.

“When powerful financial institutions … conspire with each other to intentionally violate regulations designed to ensure fair investment prices, the integrity of the municipal marketplace becomes corrupted,” said Elaine C. Greenberg, head of the SEC’s Municipal Securities and Public Pensions Unit.

As part of its deal with the Justice Department, J.P. Morgan won’t face a criminal antitrust prosecution if it meets a series of conditions, including cooperating with the investigation. The bank also admitted and accepted responsibility for the illegal conduct of its former employees.

The SEC also said Thursday that it has barred former J.P. Morgan vice president James L. Hertz from the securities industry based on his guilty plea last December in connection with municipal-bond transactions. Mr. Hertz has been cooperating with the probe.