What are the main issues addressed in the Consent Orders?

The first Consent Order with the OCC concerns historical practices related to sworn documents, collections litigation, and the Servicemembers’ Civil Relief Act (SCRA) processes. The second Consent Order, with both the OCC and CFPB, relates to the billing and administration of previously offered credit monitoring products.

How widespread are the issues covered by the Consent Orders?

The OCC Consent Order related to collections litigation affects a small percentage of the firm's credit card, student loan, auto loan, business banking, and commercial banking customers who defaulted on their loans. The credit monitoring product issues impacted customers who were enrolled in those specific offerings, and enrollments ceased in mid-2012.

What actions has JPMorgan Chase taken in response to these issues?

For the credit monitoring product issues, Chase Bank and Chase USA have already credited or refunded affected customers and stopped new enrollments in mid-2012. For the collections and SCRA issues, entering into the Consent Order with the OCC signifies agreement to address and rectify the practices outlined.

What is the potential financial impact of these Consent Orders on JPM?

The filing indicates that these issues pertain to past practices and a relatively small segment of customers, and corrective actions like refunds have already been implemented for the credit monitoring products. While the exact financial impact isn't detailed, the description suggests it may be manageable rather than catastrophic, though potential fines or remediation costs associated with the OCC order are not explicitly quantified in this 8-K.

JPMORGAN CHASE & CO 8-K SEC Disclosure

Summary

This 8-K filing from JPMorgan Chase & Co. (JPM) reports on two separate Consent Orders entered into by its banking subsidiaries, JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A., on September 19, 2013. The first order, with the Office of the Comptroller of the Currency (OCC), addresses historical issues related to sworn documents, collections litigation, and Servicemembers’ Civil Relief Act (SCRA) processes. This relates to a small fraction of customers with defaulted loans across various banking products, stemming from collections litigation from prior years. The second Consent Order, also involving the OCC and the Consumer Financial Protection Bureau (CFPB), concerns the billing and administration of credit monitoring products previously offered by Chase Bank and Chase USA. While enrollments in these products ceased in mid-2012, the banks have already taken steps to credit or refund affected customers. Investors should note that these events, while significant from a regulatory and compliance standpoint, appear to pertain to past practices and a contained portion of the customer base, with corrective actions already initiated.

Key Highlights

1JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A. entered into a Consent Order with the OCC regarding sworn documents, collections litigation, and SCRA processes.
2The OCC Consent Order covers collections litigation from previous years for a small percentage of customers with defaulted credit card, student loan, auto loan, business banking, and commercial banking loans.
3Chase Bank and Chase USA also entered into separate Consent Orders with the OCC and CFPB concerning the billing and administration of credit monitoring products.
4Enrollments in the affected credit monitoring products were stopped in mid-2012.
5JPMorgan Chase has already credited or refunded customers impacted by the credit monitoring product issues.
6The Consent Orders can be accessed via the OCC and CFPB websites.
7The filing includes two press releases dated September 19, 2013, detailing these matters.

JPMORGAN CHASE & CO 8-K Report, Corporate Update (Sep 19, 2013)

Summary

Key Highlights

Frequently Asked Questions