This story was co-published with The Capitol Forum.
Saying they are “deeply troubled by recent reports” that JPMorgan Chase has “renewed its predatory robo-signature practice,” six Senate Democrats on Monday called on company CEO Jamie Dimon to provide “detailed information regarding the recovery credit card debts from the bank”. practices.”
The lettersigned by five members of the Senate Banking Committee and its chairman, Senator Sherrod Brown of Ohiocited an article from ProPublica and the Capitol Forum that revealed how Chase launched an ongoing blitzkrieg on indebted credit card customers when the pandemic began hitting the economy in early 2020.
Chase had stopped pursuing credit card lawsuits nearly a decade ago when regulators found the bank’s legal documents were often flawed. At the time, Chase’s lawsuits did not include extensive billing records; they usually contained a two-page affidavit signed by a Chase employee who swore the bank statements were reliable.
Chase employees signed affidavits “without the signer’s personal knowledge, a practice commonly referred to as ‘robot signing,'” the Consumer Financial Protection Bureau Concluded in a consent order with Chase in 2015. Nearly 10% of lawsuits Chase won were for inflated totals and “contained erroneous amounts,” the CFPB found. Chase neither admitted nor denied the CFPB’s findings at the time, but agreed to provide “relevant information and documents” in future lawsuits.
When key terms of the CFPB settlement expired on New Year’s Day in 2020, Chase resumed pursuing credit card borrowers as before, according to consumer attorneys and legal filings.
“Chase should not use robotic signing in the pursuit of these debt collection lawsuits, or any other debts,” according to the lawmakers’ letter. The letter asked Dimon to outline the steps taken by the company to verify the accuracy of its legal claims. “How does Chase verify the quality of affidavits? asked lawmakers. “Do these employees have personal knowledge of the case?
The letter also asked Dimon to provide details of the company’s credit card lawsuits and their results, and inquired about Chase’s past promises to provide hardship waivers to customers during the pandemic. Finally, the letter noted the “numerous evidence of racial disparities in debt collection” and asked what measures Chase had in place to ensure that its debt collection practices do not create these gaps.
Chase did not immediately respond to a request for comment. But in a statement for the previous ProPublica and The Capitol Forum article, Chase said its current system for processing credit card lawsuits is solid and reliable. “We are quality checking 100% of our affidavits today,” the bank said. And, Chase said, “we continue to meet the requirements of the consent order.”
Prior to the CFPB settlement, about half a dozen Chase employees, working out of a single San Antonio office, signed hundreds of thousands of affidavits. Today, Chase has a dozen employees mass-producing affidavits from the same office using some of the same methods as in the past, according to Chase employees and outside attorneys who have represented the company.
Chase declined to say how many lawsuits she filed during her blitz of the past two years, but civil records across the country give some idea of the scale — and its accelerating pace. The company sued more than 800 credit card customers around Fort Lauderdale, Fla., last year after suing 70 in 2020 and none in 2019, according to a review of court records. In Houston, Chase filed more than 1,000 consumer debt lawsuits last year after filing just seven in 2020.
Lawmakers asked Dimon to respond to their letter by Feb. 21.