Chase and the Right of Offset

This Yahoo Answers question about someone having money taken out of their Chase account to satisfy an old debt explains WHY Chase has the right to do that, but not WHY they do so without any courtesy notice after the fact or in fact any verification that they are doing this to the correct person.

The arrogance of Chase

In a recent interview with a German newspaper, Chase CEO Jamie Dimon gave us a glimpse of exactly what is wrong with the banking industry, and Chase in particular.  For instance he said that “when profits fall too sharply then capital will move somewhere else, where there is more money to be earned, for example non-regulated markets,” and “the banking industry could do with more influence on politicians.”

Does anyone really believe that the banking industry has been underrepresented in Washington influence in the past?

The problem here is that the ability of banks to take out-sized risks that throw the whole financial system into harms way, to abuse their customers with unreasonable fees and abusive behavior, and to make out-sized profits from all of this, is at risk with recent reform efforts.

Banks have often complained recently that limiting their ability to throw huge bonuses at their staff (and especially their leadership) curtails their ability to retain talent, that people will leave for other companies.  But if the entire industry is held to the same standards, where exactly are these financial “geniuses” going to go to earn the same kind of money?  There simply aren’t other industries where people can siphon money out of the economy in this way.

Office of thrift supervision

According to this article, when WaMu was alive its fees represented 12 to 15% of the Office of Thrift Supervisions budget, one possible factor in why the OTS didn’t clamp down on WaMu’s lax lending practices.

I wonder what percentage of their budget Chase represents now?

RESPA

The Real Estate Settlement Procedures Act provides guidelines that must be followed in the settlement of a real estate transaction, including and especially loans.  If you feel that you have been mistreated by Chase with respect to the closing of your loan with them, you can read about RESPA here and read about how to file a RESPA violation complaint here.

Chase 1st quarter results

Chase easily brought home a hefty profit of $3.3 billion in the 1st quarter 2010, mostly from its investment banking division and trading arm.  It is amazing what you can do when the government will give you money for almost nothing.  Their loan portfolio is of course still performing poorly, a little more poorly in the 1st quarter 2010 than the previous quarter, as they have added to their loan reserves.

What is interesting though is information in this article about Chase’s 2nd lien loan portfolio, a not insubstantial $131 billion in size. While only 5% of the outstanding loans are delinquent, about 50% of those loans are underwater.  Is it just me or does that sound like a HUGE time bomb waiting to go off.

If you want to read Chase’s David Lowman’s full recent testimony before Congress here it is.

Business credit cards exempt from new card rules

Wouldn’t you know it, a major loophole in the new law.  According to this article by Business Week, business credit cards are COMPLETELY exempt from the new rules.

Debt collection and Federal benfits

I’ve seen reports from Chase customers about Chase freezing bank accounts that include direct deposit Federal benefits (Social Security) for the purpose of debt collection.  By law, it is illegal for banks to dip into Federal benefits for debt collection, but direct deposit funds have been a gray area and you generally had to go through a claim process to get these funds released, a process that was not simple or accessible to many people.

Well now, according to this article in the Wall Street Journal, the Treasury Department has released new rules about what banks must go through to insure frozen funds don’t include Federal benefits.  Basically, if banks freeze your funds that came from any Federal benefits, they are breaking the law, according to these new rules.

The point is that if you have this problem with Chase, you should scream loudly to the bank and to its regulators.  Information on Chase’s regulators can be found here.

Senate investagation finds fraud in WaMu loans

This article might be helpful if you are struggling with your mortgage originated by WaMu.  If you believe that your loan might have involved fraud, contacting the current banks regulators might help.  You can find information on what regulators to contact here.