FacebookTwitterGoogle+RedditEmail

Pity JP Morgan/Chase

by CHRISTOPHER BRAUCHLI

And whatten penance wul ye drie for that, young Edward, oh young Edward?

— Edward,  Scottish Ballad

One has to feel sorry for JPMorgan Chase. Several months ago it thought it had not only paid a sufficient amount in fines to make up for its bad behavior but it had also engaged in a form of penance for some of the bad things it had done.  Little did it know.

The penance was reformation of its practices with respect to payday loans.  Before the reforms, JPMorgan Chase (and  many other institutions dealing with payday lenders) permitted payday lenders to automatically withdraw repayment amounts from the borrowers’ bank accounts and agreed to prevent borrowers from closing their accounts or issuing stop payment orders so long as the payday lender was not fully repaid.  As a result a borrower who did not have enough money in the bank to repay the lender the amount due on a given date was charged an insufficient fund fee by the bank each time the lender submitted a request for payment in many cases generating hundreds of dollars in fees imposed on the borrowers.  That practice came to an end in May 2013. The fines it paid, in addition to its act of penance were described by Kevin McCoy of USA Today.

Between June 2010 and November 2012 JPMorgan Chase paid more than $3 billion in fines and settlements that related to, among other things, overcharging active-duty service members on their mortgages, misleading investors about a collateralized debt obligation it marketed, rigging at least 93 municipal bond transactions in 31 states,  and countless other misdeeds.  In August 2012  alone it paid a fine of $1.2 billion to resolve a lawsuit that alleged it and other institutions conspired to set the price of credit and debit card interchange fees.  In January 2013 and February 2012 it paid $1.8 billion to settle claims that it and other financial institutions improperly carried out home foreclosures  after the housing crisis. Not only did it pay large fines. Jamie Dimon, its unfailingly cheerful, beautifully coiffed  CEO, took a pay cut which, including deferred compensation, reduced his daily salary from $63,013 to $31,506. Sadly, those events were not to be the end of its troubles.  Indeed, as it turns out they were merely the tip of the iceberg.

In July 2013 it paid $410 million for alleged bidding manipulation of California and Midwest electricity markets.  In September 2013 it paid $389 million for unfair billing practices, in September it paid $920 million for actions of the “London Whale” disaster, and in October 2013 another $100 million with respect to the same fiasco. Then came the really big news.  On November  19, 2013 it was reported that JPMorgan Chase was going to pay $13 billion to settle what in non-legal terms would be described as a whole bunch of claims that had to do with the mortgage crisis of a few years back.  Included in the $13 billion is $4 billion for consumer relief,  $6 billion to pay to investors and the remaining $3 billion is a fine. December 13 it was announced that the bank was entering into a $2 billion  deferred prosecution agreement with the government because of its role in the Bernie Madoff Ponzi scheme.  According to the settlement the bank ignored signs that suggested Bernie Madoff was conducting a Ponzi scheme and cheating his investors.

The payment of almost $20 billion in fines would be enough to spoil the holidays for almost anyone.  Happily for the bank, there was a silver lining to its financial cloud.  Although $13 billion is a lot of money, Marianne Lake, the Chief Financial Officer of the bank explained that taxpayers will help the bank pay the fine.  She explained that of the $13 billion, $7 billion is tax deductible.  In addition to that bit of cheery news, no one has to plead guilty to anything bad in connection with the Madoff fine.  Although the bank is agreeing to a deferred prosecution no one such as Jamie Dimon,  is going to jail.  There will, of course, be some public shame for the bank, kind of like being placed in the stocks in a public square.  The court filing in which the settlement is finalized will list in detail all the criminal acts committed by the bank for which it will not be punished.  There is not a criminal anywhere in the world who would not happily accept a public recital of the crimes committed instead of entering a formal plea of guilty with the attendant risk of going to jail. A bit of embarrassment beats a bit of time in jail every time.  Just ask Jamie Dimon or other officers at JPMorgan Chase.

CHRISTOPHER BRAUCHLI is a lawyer in Boulder, Colorado. He can be e-mailed at brauchli.56@post.harvard.edu.

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

March 29, 2017
Jeffrey Sommers
Donald Trump and Steve Bannon: Real Threats More Serious Than Fake News Trafficked by Media
David Kowalski
Does Washington Want to Start a New War in the Balkans?
Patrick Cockburn
Bloodbath in West Mosul: Civilians Being Shot by Both ISIS and Iraqi Troops
Ron Forthofer
War and Propaganda
Matthew Stevenson
Letter From Phnom Penh
James Bovard
Peanuts Prove Congress is Incorrigible
Thomas Knapp
Presidential Golf Breaks: Good For America
Binoy Kampmark
Disaster as Joy: Cyclone Debbie Strikes
Peter Tatchell
Human Rights are Animal Rights!
George Wuerthner
Livestock Grazing vs. the Sage Grouse
Jesse Jackson
Trump Should Form a Bipartisan Coalition to Get Real Reforms
Thomas Mountain
Rwanda Indicts French Generals for 1994 Genocide
Clancy Sigal
President of Pain
Andrew Stewart
President Gina Raimondo?
Lawrence Wittner
Can Our Social Institutions Catch Up with Advances in Science and Technology?
March 28, 2017
Mike Whitney
Ending Syria’s Nightmare will Take Pressure From Below 
Mark Kernan
Memory Against Forgetting: the Resonance of Bloody Sunday
John McMurtry
Fake News: the Unravelling of US Empire From Within
Ron Jacobs
Mad Dog, Meet Eris, Queen of Strife
Michael J. Sainato
State Dept. Condemns Attacks on Russian Peaceful Protests, Ignores Those in America
Ted Rall
Five Things the Democrats Could Do to Save Their Party (But Probably Won’t)
Linn Washington Jr.
Judge Neil Gorsuch’s Hiring Practices: Privilege or Prejudice?
Philippe Marlière
Benoît Hamon, the Socialist Presidential Hopeful, is Good News for the French Left
Norman Pollack
Political Cannibalism: Eating America’s Vitals
Bruce Mastron
Obamacare? Trumpcare? Why Not Cubacare?
David Macaray
Hollywood Screen and TV Writers Call for Strike Vote
Christian Sorensen
We’ve Let Capitalism Kill the Planet
Rodolfo Acuna
What We Don’t Want to Know
Binoy Kampmark
The Futility of the Electronics Ban
Andrew Moss
Why ICE Raids Imperil Us All
March 27, 2017
Robert Hunziker
A Record-Setting Climate Going Bonkers
Frank Stricker
Why $15 an Hour Should be the Absolute Minimum Minimum Wage
Melvin Goodman
The Disappearance of Bipartisanship on the Intelligence Committees
Patrick Cockburn
ISIS’s Losses in Syria and Iraq Will Make It Difficult to Recruit
Russell Mokhiber
Single-Payer Bernie Morphs Into Public Option Dean
Gregory Barrett
Can Democracy Save Us?
Dave Lindorff
Budget Goes Military
John Heid
Disappeared on the Border: “Chase and Scatter” — to Death
Mark Weisbrot
The Troubling Financial Activities of an Ecuadorian Presidential Candidate
Robert Fisk
As ISIS’s Caliphate Shrinks, Syrian Anger Grows
Michael J. Sainato
Democratic Party Continues Shunning Popular Sanders Surrogates
Paul Bentley
Nazi Heritage: the Strange Saga of Chrystia Freeland’s Ukrainian Grandfather
Christopher Ketcham
Buddhism in the Storm
Thomas Barker
Platitudes in the Wake of London’s Terror Attack
Mike Hastie
Insane Truths: a Vietnam Vet on “Apocalypse Now, Redux”
FacebookTwitterGoogle+RedditEmail