JPMorgan ordered to fix debt collection practices
WASHINGTON, Sept 19 (Reuters) - U.S. bank regulators ordered JPMorgan Chase & Co to improve its debt collection practices, as the bank also agreed to pay $920 million in penalties to resolve liabilities from its "London Whale" derivatives trading losses last year.
The order, made public on Thursday, addresses errors in how the bank pursued credit-card debts in court, but does not provide details of how extensive the problems were.
The order from the Office of the Comptroller of the Currency does not include financial penalties, and it allows JPMorgan Chief Executive Jamie Dimon to resolve another of the multitude of legal issues weighing on the bank.
But the action still leaves the door open for regulators to fine the bank over the issue down the line.
The enforcement action requires the largest U.S. bank by assets to review the accounts of customers affected by the mistakes and compensate those borrowers.
The bank is required to review all of its debt collection litigation outside of home loans dating back to January 2009.
The OCC also faulted the bank for its compliance with the Servicemembers Civil Relief Act, and ordered it to improve its policies governing benefits for armed services members.
That act allows members of the military to postpone or suspend financial obligations such as outstanding credit card debt payments.
JPMorgan had disclosed in August that it had expected the action from the OCC, and said other regulators including the Consumer Financial Protection Bureau were also investigating the matter.
State enforcement authorities have also been investigating the bank for its debt collection practices. In May, California's attorney general sued JPMorgan and accused it of filing faulty documents when seeking to collect on some credit card debt in the state.