An executive at JP Morgan Chase admitted to Congress Wednesday that the bank broke the law at least 4,500 times by foreclosing on active-duty soldiers and charging them too much interest.
It probably wasn’t alone. The bank found similar problems at banks it recently bought, suggesting that violations of the Servicemembers Civil Relief Act may be an industry-wide problem.
“The problems we have experienced across our organisation have shown up with loans we have acquired in the last couple of years with Washington Mutual and Bear Stearns, which we acquired, and given the fact that the problems reach across those organisations, it suggests to me that there may be issues out there amongst others,” Stephanie Mudick, executive vice president of Chase’s consumer practices office, said in testimony to the committee.
The violations led to 18 illegal foreclosures, 12 of which have been rescinded or settled, Mudick said. Chase agreed to set aside $1.8 million for overcharged servicemembers.
For anyone tired of bank leaders passing the buck on who caused the greatest economic meltdown since 1929, the hearing provided brief respite. Discussing the case of Capt. Jonathan Rowles, an F-18 fighter pilot, whom Chase overcharged about $15,000, Mudick offered the closest thing to an abject apology we’ve heard from a big banker in years.
“We clearly made mistakes,” she said before the panel. “The customer service we provided to him and his wife was inexcusable. We deeply regret it. We are trying to fix it.”
Image: The U.S. Army, via Flickr.com