A group of six Democrats on the Senate Banking Committee, including Chairman Sen. Sherrod Brown [D-Ohio] and Sen. Elizabeth Warren [D-Mass.] released a letter they had sent to JPMorgan Chase seeking information on the mega-bank’s credit card collection process, citing reports indicating that the company is robo-signing documents when making the decision to sue individuals for unpaid debts.
A copy of the letter can be accessed by clicking here.
The Senators submitted a list of questions and requests for additional details on the company’s credit card collection processes, specifically attempting to confirm whether the bank is making good on its statements that it performs quality checks on 100% of affidavits used in credit card debt collection lawsuits filed against consumers. The letter reminds the bank that it entered into a consent order with the Consumer Financial Protection Bureau back in 2015 that prohibits Chase from engaging in robo-signing and other debt collection practices that were alleged to be in violation of the Consumer Financial Protection Act. As part of that consent order, Chase agreed to stop collecting on more than a half-million credit card accounts, pay consumers $50 million in refunds, and $166 million in fines and penalties to the CFPB and Office of the Comptroller of the Currency.
That consent order expired in 2020 and the Senators allege that Chase has resumed the practice following the expiration of that order.
The questions asked of Chase by the Senators are:
- Has Chase resumed the practice of robo-signing?
- If so, does Chase believe that this practice is consistent with the CFPB’s consent order?
- How many employees of Chase are dedicated to reviewing customer files to decide whether to pursue a lawsuit collecting on debt?
- How many supervisory employees review decisions to submit a lawsuit?
- How many employees are tasked with substantiating the action via the drafting and signing of an affidavit?
- Do these employees have personal knowledge of the case?
- What particular elements of a customer’s file are utilized in drafting the affidavit?
- How much time does a staff member utilize to review a customer’s file and draft the affidavit to submit in support of a collections action?
- How does Chase quality check the affidavits used in debt collection suits against credit card consumers?
The additional information requested by the Senators was:
- What types of hardship policies did Chase have in place in 2020 and 2021?
- Did Chase affirmatively tell every customer about its hardship policy and any opportunity to put collection on hold for those impacted by the pandemic?
- If yes, how were these policies and opportunities communicated to customers?
- How did Chase select people to sue during a pandemic? How did it screen out those with financial hardship as a result of the pandemic?
- There is extensive evidence about racial disparities in debt collection and the disparate impact of the pandemic on black and Hispanic communities. How does Chase ensure that its collection activity and collection lawsuits do not create racial disparities?
- How many lawsuits did Chase file against its credit card customers in 2019, 2020, and 2021?
- How many lawsuits ended in a default judgement?
- In how many lawsuits were defendants representing themselves, and what were those outcomes?
- In jurisdictions with higher standards of judicial review, what number of cases were rejected on evidentiary grounds? Please provide this information on a state-by-state basis.