Written by Biloxi
JPMorgan Chase was sitting in the hot seat at the House Committee on Veterans' Affairs hearing on Wednesday. Stephanie Mudick, executive vice president of J.P. Morgan Chase's office of consumer practices, told the House Committee that the company is embarrassed over the matter, and apologized for the bank's errors. Ms. Mudick said in her prepared testimony:
"We deeply regret that service members have been overcharged and in some cases faced foreclosure because of these errors. We are acting to make these customers whole as soon as possible and enhancing our safeguards to prevent such mistakes going forward. Chase is determined to get this right."
In addition, Ms. Murick said that bank has so far sent the 4,500 overcharged service members $2.4 million including interest. The median payment has been $70 plus interest. She blamed human error and problems with its coding of not identifying military homeowners correctly and said that the bank has implemented new procedures.
Unfortunately, the numbers in overcharging and foreclosing on the troops have increased since the banks' statement last month. Last month, Chase stated tht it overcharged over 4,000 troops and foreclosed on 14 homes. Now, 18 homes were found to have been improperly foreclosed on. Two other homeowners got unspecified settlements, and six cases remain unsettled.
Ms. Mudick's testimony didn't go too well to satisfy the committee. In a heated exchange with Ms. Mudick, California Rep. Bob Filner, the top Democrat on the committee, made it clear he didn't think an apology is enough and told her that she broke the law.
Before Ms. Mudick's testimony, Marine Capt. Jonathan Rowles and wife and their attorney testified first. Mr. Rowles and wife and other military families have class action lawsuit against Chase. Mr. Rowles was denied a 6% interest rate which is under the Servicemembers Civil Relief Act on his 2004 mortgage with Chase while on active duty in 2006. Mr. Rowles and his wife eventually faced threats and harrassment of foreclosure while he was with Training Squadron 86 in Pensacola in 2008. The Rowles lawyer testified that other service members that became a victim of Chase's illegal practices:
Army Reserve Lt. Col. Sarah Letts-Smith’s California home was foreclosed on while she served in Iraq. JPMorgan Chase, which bought the family’s mortgage company, sold the home in 2009.
Marine Lance Cpl. Martin Hupfl’s 2007 loan from Chase Auto Finance Corp. on a Dodge Ram truck was terminated and placed with a debt collector while he was in basic training at Jacksonville Naval Air Station. The 12 percent interest rate was never reduced to 6 percent.
JP Morgan Chase is in serious hot water. The company violated the federal law. The bank has forgotten to read the penalities under Servicemembers Civil Relief Act. In December 2003, President Bush signed into law H.R. 100, the Servicemembers Civil Relief Act which rewritten the Soldiers and Sailors Civil Relief Act of 1940.
Here are the penalties of a foreclose or sale of a service member's home:
(c) SALE OR FORECLOSURE- A sale, foreclosure, or seizure of property for a breach of an obligation described in subsection (a) shall not be valid if made during, or within 90 days after, the period of the servicemember's military service except--
(1) upon a court order granted before such sale, foreclosure, or seizure with a return made and approved by the court; or
(2) if made pursuant to an agreement as provided in section 107.
(d) PENALTIES-
(1) MISDEMEANOR- A person who knowingly makes or causes to be made a sale, foreclosure, or seizure of property that is prohibited by subsection (c), or who knowingly attempts to do so, shall be fined as provided in title 18, United States Code, or imprisoned for not more than one year, or both.
(2) PRESERVATION OF OTHER REMEDIES- The remedies and rights provided under this section are in addition to and do not preclude any remedy for wrongful conversion otherwise available under law to the person claiming relief under this section, including consequential and punitive damages.
Of course, one can argue that banks are not people but a corporation. Unfortunately, the definition of the word "corporation" completed change because the Citizens United v Federal Election Commission lawsuit ruling in the U.S. Supreme Court last year. Citizens United, a conservative non-profit organization won a landmark decision by the Supreme Court ruling that corporate funding of independent political broadcasts in candidate elections can't be limited under the First Amendment. Citizen United has become recognized as an individual not a corporation to be protected under the First Amendment. This landmark ruling will come back to haunt Chase in their case against the service members as a person is held accountable for his or her actions under the Servicemembers Civil Relief Act. Since corporations now have First Amendment rights because of the Supreme Court ruling in favor of Citzens United lawsuit like all Americans, Chase can be held accountable for the federal law. Someone from Chase can go to jail. The question is who from Chase will be left holding the bag and fall on the sword?
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