This past Thursday, September 19, U.S. bank regulators found fault with many of JP Morgan Chase Company’s policies. Specifically, the company charged customers for Identity Theft Products that were never received. There were also issues with the way that the company handled collection procedures for delinquent accounts. The company was ordered to refund affected customers about $309 million dollars. The company must also pay $80 million in fines for the unlawful credit card practices. In addition to the monetary penalties, the company was ordered to alter the unlawful practices and re-evaluate credit card customers’ policies.
Overseas Troubles
Thursday was the same day that a settlement was announced for the London Whale trading losses. JP Morgan Chase agreed to pay $920 million to four regulation agencies. The Office of the Comptroller of the Currency will receive approximately $300 million. The SEC, the Federal Reserve, and the Financial Conduct Authority in London will each receive about $200 million. Though this is a step in the right direction in resolving the scandal swirling around the London trading losses, it is not the end of the battle. There are continuing investigations into JP Morgan’s intentions in playing down huge trading losses. If JP Morgan Chase admits to intentionally withholding information in order to manipulate the market, it could threaten the bank’s trading business. The Commodity Futures Trading commission plans to put together a lawsuit in an effort to prove that JP Morgan Chase knowingly engaged in unlawful trading procedures.
The company is also being investigated for hiring practices in China. It was found that JP Morgan Chase hired children of Chinese government officials shortly before deals were made with businesses that were controlled by the government. There are also concerns about JP Morgan Chase dealing with foreign banks that may be at risk for money laundering.
The company executive officer, Jamie Dimon, says that the bank will be strengthening controls to better serve customers around the world.