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| (Photo: Gary Cameron/Reuters) |
And whatten penance wul ye drie for that, young Edward, oh young Edward?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.
— Edward, A Scottish Ballad
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.
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