CFPB and OCC Broker Another Settlement....A Win for Chase Bank Customers

There are approximately 2.1 million JP Morgan Chase Bank customers who can expect to receive a small refund as part of a recent $309-million settlement between the Consumer Financial Protection Bureau (CFPB) and the bank. The CFPB and the Office of the Comptroller of the Currency (OCC) determined that Chase “engaged in unfair billing practices for certain credit card add-on products by charging consumers for credit monitoring services that they did not receive.” Customers can expect to receive a “full refund” if they have been identified as not receiving the services between October 2005 and June 2012.

However, doing some simple math, we can determine that on average, each bank customer will only receive less than $150.00. It is great that governmental agencies are watching such practices. However, my question is what is the value of the money that Chase received in regard to the practices?   Almost seven years of conduct resulted in what benefit to Chase? We would need to know this in order to determine whether this is an appropriate resolution. What was the average bank customer charged during that time? Seems relatively certain that is was more than $150 each!

Again, it is great that the government is protecting us…and equally sad that we need protection!! The CFPB seems to be one governmental agency that is stepping up and monitoring lender conduct. It also seems that charging for a service that customers did not receive is a tad on the despicable side, so was part of the settlement punitive? Certainly seems like it should be given that the allegation was that Chase charged for services that were not received but the bank customers.

Hopefully the next settlement will provide more benefit to those that were harmed. In the interim, we should be thankful that someone is out there to protect us.

Paddy Deighan J.D. Ph.D

http://www.homesavers.pro

Federal Government Imposes Foreclosure Review Process

The federal government has taken some action regarding the foreclosure crisis. The government has decreed that all servicers under the supervision of the Office of the Comptroller of the Currency (OCC) must conduct self-assessments to examine foreclosure management practices no later than September of this year. This is an attempt to help clean up the industry. Upon completion of the assessment, the lenders must identify and “take immediate corrective action” to address weaknesses in the process. The OCC has issued this mandate in response to what regulators have called a “pattern of misconduct and negligence related to deficit practices in residential mortgage loan servicing and foreclosure processing” in 14 large mortgage servicers.
While this sounds like a good thing, it is actually frustrating many state attorneys general, who have been frustrated by the OCC since it reached its own robo-signer settlement with major lenders earlier in the year. In fact, the AGs have written a letter complaining that the federal agency is actually ignoring a “congressional mandate” that gives states the right to regulate their banks rather than the OCC. The letter also accuses the office of “preventing states from enforcing consumer protection laws on national banks” during the 2007-2009 financial crisis.
The other aspect of this is that the OCC actually does not have much authority to do anything. It has “jurisdiction” over member banks only and most lenders have certain divisions that are under the auspices of the OCC, but not the primary lending arms. As an example, you may have “ABC Bank” and it is one of the top five home lenders. But only “ABC Bank North Dakota” Is under the auspices of the OCC. There has been a lot written about the OCC, but it actually has very limited purpose and usefulness.
I suppose that it is worth mentioning all of this, but the truth is that this type of action will have limited impact on the crisis.