America’s least-hated banker hasn’t had much to say about how his institution, JPMorgan Chase, wrongfully foreclosed on 14 military families and overcharged thousands of others.
That banker would be Jaime Dimon, the subject of a flattering profile in the New York Times magazine last month, in which he was portrayed as an astute and careful risk manager and staunch defender of the benefits of large banks. Dimon admitted that he wasn’t careful enough before the financial collapse – he missed the problems posed by the securitized pools of investments stocked with bad mortgages that nearly sank the economy.
In the wake of disclosures last year about massive problems in the foreclosure process, Dimon led the charge in dismissing them. He appeared to be less concerned with evidence of bankers’ extreme carelessness than he was that the efforts of 50 states' attorneys general to investigate might slow down the housing recovery.
As Fortune reported, “He (Dimon) strode into the foreclosure fiasco last fall with guns blazing, as usual, claiming Chase wouldn't be tarnished by the banking industry's mortgage misbehavior.”
Dimon has repeatedly insisted his bank hadn’t wrongly foreclosed on anyone.
Over the last several weeks, the news media has reported that JPMorgan Chase had wrongfully foreclosed on 14 active-duty military families and overcharged thousands more on their mortgages.
Bank officials said they discovered mistakes and were in the process of reversing the foreclosures and about $2 million in fees to 4,000 families that the bank overcharged.
The bank may have discovered those ‘mistakes’ in the process of preparing their response to a lawsuit filed by a South Carolina Marine captain whose house they foreclosed on, in violation of the protections provided by the Servicemembers Civil Relief Act.
Under that law, banks aren’t supposed to charge active-duty members of the military more than 6 percent interest on the mortgages. In addition, members of the military are supposed to be exempt from the delinquency process – including foreclosure.
The Marine captain, Jonathan Rowles, is serving in South Korea. His wife, Julia Rowles, told National Public Radio that she and her husband have been fighting with Chase ever since Rowles was commissioned as an officer five years ago.
They got harassing collection calls, sometimes in the middle of the night, Julia Rowles said. "They would say, 'we will take your house. We will report you to the credit agency. This is a bad situation that you don't want to be getting into. Pay us today.' ”
The bank was charging them 9 to 10 percent interest and nearly $2,000 a month, when they should have been paying $1,400."
JPMorgan’s Dimon has sent his PR spokesmen to deal with the mess. Back in November, Dimon has insisted that his bank is especially friendly toward those who serve their country. On Veterans’ Day, he was touting JPMorgan’s increased efforts to recruit veterans because “it is, quite simply, the right thing to do.”
In the wake of JPMorgan’s disclosures, other big banks, including Citibank, Ally Bank and Goldman Sach’s Litton Loans are reviewing their policies concerning home lending to military families.
Unfortunately, the JPMorgan fiasco is only the latest in a long, tawdry history of financial institutions targeting members of the military for predatory lending. During the recent fight over financial reform, the nation’s military leaders had fought to have the nation’s car dealers covered by the new financial consumer protection agency. But they were no match for the clout of the car dealers, who won the exemption they lobbied for.
According to Army Times, Chase has advertised itself as a military-friendly bank since at least 2005, when it began touting its Home Finance Military Mortgage program, which offers a discount on closing costs in home purchases or refinancing for military members and retirees. Mobilized National Guard and reserve members who had a Chase mortgage in good standing could defer entire mortgage payments for up to 18 months during call-ups. Both those initiatives go beyond the requirements of the SCRA. A bank spokesman couldn’t say if any of the 4,000 service members receiving checks, or Rowles, for that matter, participated in those initiatives.
In November, Dimon celebrated Veterans’ Day by touting his banks’ efforts to recruit those who served their country to work at JPMorgan because “it’s the right thing to do.”
This week Dimon is off to the meeting of the global elite at Davos, Switzerland, where he was complaining about the unjustified hostility toward his profession. “I just think this constant refrain [of] ‘bankers, bankers, bankers,’ - it’s just a really unproductive and unfair way of treating people,” Dimon said. “People should just stop doing that.”