March 13 JPMorgan Chase & Co is
paying the federal government $45 million to settle a lawsuit
alleging it charged veterans hidden fees in mortgage
The whistleblower lawsuit, filed in 2006 in Georgia by two
mortgage brokers, seeks payments on behalf of the U.S.
government by eight banks and mortgage companies, a law firm
involved in the case said Tuesday. JPMorgan is the first bank to
reach a settlement.
According to court documents filed on Monday, the payment
was part of the national mortgage settlement over foreclosure
abuses reached with JPMorgan and four other lenders last month.
Banks also agreed to pay $182 million in four other
The two whistleblowers will share about 26 percent of the
settlement, or $11.7 million, according to the law firm of
Butler, Wooten & Fryhofer in Atlanta. The case is still pending
against the other lenders, including Bank of America Corp
, Wells Fargo & Co and Citigroup Inc.
JPMorgan declined to comment.
Meanwhile, the American Banker reported on its website that
JPMorgan stopped suing delinquent credit card customers last
year amid another federal investigation into allegations of
faulty account records.
The credit card probe by the Office of the Comptroller of
the Currency Bank stemmed from a whistleblower complaint and a
wrongful termination suit by a former employee, according to the
report. The former employee said she was fired because she
objected to the bank's sale to outside collection companies of
claims based on flawed records, according to the report.
In response to the credit card story, the bank issued a
statement on Tuesday saying that it had found "procedural
issues" and notified regulators after conducting an internal
review following problems with mortgage debts.
"We have since done a number of tests and found that in the
overwhelming majority of cases, the amount collected from
customers was correct," the bank said in the statement.
Spokesman Paul Hartwick declined to comment further. OCC
spokesman Dean DeBuck declined to comment.
The American Banker said that court filings and interviews
with seven current and former employees had corroborated
allegations by the former employee. The reporting showed the
bank's credit card litigation unit was plagued by unreliable
outside lawyers, "disregard for accuracy and patchy technology,"
according to the publication.
The credit card report can be found at
JPMorgan shares were up 1.8 percent around midday Tuesday in
New York trading.