U.S. Marine Corps Capt. Jonathon Rowles testifies Feb. 9 in front of the House Veterans' Affairs Committee. Photo by Craig Roberts

JPMorgan Chase grilled by Congress

It was an eventful morning on Feb. 9 for a senior executive of JPMorgan Chase, the giant financial institution accused of violating lending rules that - in several cases - caused military families to lose their homes. Stephanie Mudick, Chase's vice president in charge of consumer practices, sat alone as members of the House Veterans' Affairs Committee grilled her about the company's handling of mortgage loan provisions in the Servicemembers Civil Relief Act (SCRA).

The committee's ranking minority member, Rep. Bob Filner, D-Calif., challenged Mudick and fellow JPMorgan Chase employees in absentia to take personal - not corporate - responsibility for violations that reportedly caused emotional and financial distress for a number of servicemembers and their families.

Mudick answered emotionally charged accusations with a "personal assurance" that the institution never intentionally harmed servicemembers in efforts to collect its mortgage payments.

Last month, The American Legion called upon all U.S. financial institutions that handle mortgages for military families to make sure they are complying with provision of the SCRA.

"This is a sad situation, to discover that any bank may be violating a law intended to ease the pressure of financial concerns while people are serving in uniform," said Jimmie Foster, the Legion's national commander.

Under terms of the SCRA, provisions are made to cap interest rates on home mortgages for active-duty military personnel. In a lawsuit filed on behalf of Jonathon Rowles and his wife, Julia, JPMorgan Chase is accused of continuing to charge the couple mortgage rates that exceeded the cap after Rowles joined the U.S. Marine Corps Reserve and was called to active duty.

Chase is also accused of repeatedly misplacing documents that proved Rowles was on active duty, and of making collection calls the couple considered "harassing." Both Rowles, now a Marine Corps captain, and his wife testified at the hearing. So did their attorney, Richard "Dick" Harpootlian, known to the public as Fox News Channel's legal expert.

Harpootlian said the original lawsuit has now been expanded to class-action status and includes those who "received a blighted credit report as the result of their invocation of SCRA protection, those whose homes were foreclosed upon despite SCRA protection, and those possessing installment contracts that were cancelled or resulted in repossession of personal property, such as automobiles, despite SCRA protection."

At the hearing, Harpootlian suggested jail sentences as appropriate punishment for SCRA violators.

In her oral testimony before the HVAC, Mudick said JPMorgan Chase assumed "full responsibility" for the SCRA violations, characterizing the alleged 4,500 cases of mishandled interest rates and 18 wrongful foreclosures as products of human error. She said lack of internal training left many Chase employees with little, if any, knowledge of SCRA regulations and the intricacies of military documentation, saying that "military orders are sometimes hard to comprehend."

In response, Rep. Tim Walz, D-Minn., produced his iPad, upon which he exhibited a simple one-page set of military orders. In contrast, he held up a Chase credit card agreement spanning dozens of pages. He called Mudick's statement "the weakest testimony I've ever heard in this committee."

Nevertheless, in both written and oral testimony, Mudick assured committee members that many "enhanced controls" were now in place at Chase to compensate victims of the SCRA violations and to prevent future occurrences. Among those, she said, was an SCRA telephone "help line" staffed by veterans.

Although Mudick's appearance elicited the most dramatic moments of the two-and-a-half hour hearing, other panelists spoke as well. Among them was U.S. Army Col. Shawn Shumake from DoD's Office of Legal Policy. He outlined the legal structure and history of the SCRA, and how military attorneys are trained to deal with violations of the act. Shumake emphasized, as did committee members, the importance of servicemembers familiarizing themselves with the SCRA's provisions.

Hollister Petraeus, head of the Treasury Department's new Office of Servicemember Affairs, also testified at the hearing.

"Protecting our servicemembers from suffering devastating financial repercussions for answering the call to service is not only the right thing to do - it is also important to our national security," Petraeus said. "A recent Department of Defense survey found that servicemembers consider their finances to be the second-largest source of stress in their lives, behind career concerns but ahead of deployments, health, family - and war."

Petraeus was dismayed to learn about the recent allegations of mortgage-related violations of SCRA. "I hope that the recent attention to this issue will cause all lenders to take steps to educate their employees about the financial protections that the SCRA provides, and to take appropriate proactive steps to ensure compliance," she said.

Committee Chair Jeff Miller, R-Fla., summed up the proceedings. "Our nation's war fighters and their families should not have to fight to keep their piece of the American Dream, while they are on foreign ground defending that fundamental right for all of us," he said. "While I am heartened that JPMorgan Chase Bank is attempting to fix these errors with respect to wrongful foreclosures, and is refunding over $2.4 million in excessive interest charges, more must be done to ensure that this never happens again. I hope this is a wake-up call for the entire financial services industry."

The JPMorgan Chase case is still in litigation, but is entering a mediation phase.


  1. JP Morgan Chase was on the origination end of another mortgage document ordeal. The big bank reportedly sent a customer's home loan files to a total stranger, opening the opportunity for identity theft. Article source: Chase sent mortgage documents to wrong person.
  2. Chase has lost my Loan Modification paper work requested new documents only to lose them. My case has been transferred from one person to the next. Every time it takes two to three weeks to contact them to get an answer about the status. I have been called to be told that I was declined but can't get anything in writing as to why the modification was declined. The standard decline letter states because my housing cost to gross income ratio according to them is below 31%. That is after they adjust my gross pay up and use an interest only payment (Sounds just like what caused the housing market crash in the first place.) I have been told by Chase employees that "You have a great interest rate You should be happy", "Your current and don't need help" and my favorite "You don't make enough to afford the new modification payment." Chase said they would begin an "enhanced" loan modification program for all members or veterans who served as far back as 9/11. Still waiting to see that Chase?
  3. I deployed 1 Feb 2010 and will be until April 2011 here in Iraq. To make a long story short my (taxes) escrow went up and I was unaware while I was gone. My payments fell behind no more than 30 days at time for a few months, all of which went on my credit report and hurt my score. I thank God I am not in a foreclosure situation like all the horror stories I have read on the net. My story is that I am merely trying to get my credit score and potentially harmful information on my report removed. As soon as I found out about the negative financial situation I was in (January 2011), I called Chase over and over and over to try to get it repaired with the SCRA dept. I must have spoken to 12 different people all assuring me my account would be sorted and repaired (as I did repay everything that was owed for the lost escrow to get back to a zero monthly balance). I sent them my deployment orders as they requested and made numerous follow up calls only to get more excuses and passed on to a
  4. JPMorgan Chase has received a black eye. But here's a harder beating. You lost my business. And don't ask me to come back.
  5. The CEO of JPM has no one's interest in mind but his own. JD LIED when he gave his big speech to become CEO of this firm during the merge with Bank 1. "No more outsourcing!" was his battle cry, but what has he done? Eliminated American jobs just to move them to India and the like, where the customer suffers inferior service. The stock performance of this company since his arrival is mediocre at best, any CEO at another corp would have been booted out on his ass a long time ago. This is not an American company by any definition. It is time to stand up for America and move your money to a local bank or credit union. To shame his country by disrespecting our service members on top of all the other shameful business practices he allows is disgusting.
  6. You are supposed to represent the very best image of top leadership by the examples you set. Wrongful acts by employees of JPMorgan Chase that were illegal were done under the helm and responsible CEO. His annual bonus 17 million? should be attached for the fine of 2.4 million refunded due to wrongful foreclosures with interest penalty added at same exhorbitant rate they imposed. You can be sure every Chase employee will be immediately educated to prevent any future CEO penalties. I worked for #1 Bank of New York when I was inducted into US Army. They paid the difference between my bank salary less military pay during entire service period. Also, interest on my home mortgage was waived, only an affordable principal amount was due which enabled us to keep our home while performing military duty. How great is that by #1 BNY as compared JPMorgan Chase! Ignorance of the SCRA mortgage loan provisions, as with any law, is not excuseable. Ms Murdick is CEO sacrificial lamb.
  8. The appropriate Chase employees should not go to jail. A test of the SCRA guidelines should be given to every employee in every relevent position in the entire financial sector. Anyone failing this test should be DRAFTED, paid military wages and sent to the WAR they IGNORE. AMEN!!!!
  9. These are some of the same yahoos that received bail out money to line their pockets with bigger bonuses.Now they have the audacity to wreck the military members lives and others with impunity.They should be drummed out of business,their bottom line is all that counts.Guaranteed not one of the elite of JP Morgan have ever heard gun fire or the sickening whistle of incoming,or the yell of corpman up.Just once they should all be shipped to diddy-wa-diddy to fight to uphold someone else`s freedoms.The rich get richer and the poor get poorer,living off of the fat of the land and others backs is enough to make one (puke)until this practice is put to rest along with the greedy,grubby,over paid hooligans that push employees to exercise these practices it will go on.In a way it`s unfortunate we live in a so-called civil society,in days of old they would be dealt with promptly and the money grubbers would be tarred and feathered and run out of town on a rail. JAMES TURNER USMC
  10. I disagree with the post from danieltoural59. The appropriate Chase employees should not go to jail. A test of the SCRA guidelines should be given to every employee in every relevent position in the entire financial sector. Anyone failing this test should be DRAFTED, paid military wages and sent to the WAR they IGNORE. Think they would pay attention then?
  11. They just try to spit in the eye of the service member. Does it take going this far, by a Captain, to get to this point? What about the private? The Spec 4? Will they have the clout the Captain did to challenge the bank? I believe there are many more servicemen the bank is screwing beside the few mentioned. And not only CHASE. Other banks as well. BANKS, Your CLIENT is out there fighting for your right to do business in a free country. At least afford them the right to not worry about their homes while they are getting shot at. Forget about your million dollar "bonus" this year. That BONUS could help Soldiers keep their homes while they fight for YOU. This system pisses me off to the max. Even Corporate America doesn't seem to give a crap about the soldiers laying their life on the line to keep you getting your precious "bonus". This story made me cry. Some CHASE employee SHOULD go to jail. It's only the RIGHT THING TO DO. But WHO? We have to set an example for corporate America.
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