JP Morgan Chase & Company has agreed to pay $56 million to settle claims in a class action suit that it overcharged members of the U.S. military on their mortgages and improperly foreclosed on some military families' homes. The settlement, filed in U.S. District Court in Beaufort, S.C. and pending court approval, states that JP Morgan Chase will pay $12 million to the class action lawsuit and set aside $15 million for additional damages on a case-by-case basis.
The class action suit against JP Morgan Chase was brought about by Marine Corps Capt. Jonathon Rowles for violating the Servicemembers’ Civil Relief Act (SCRA), a law enacted in 1942 to protect deployed members of the military from financial duress while on active duty. Capt. Rowles accused Chase of committing numerous infractions, including failing to reduce his interest rate to six percent by the proper date under the SCRA, and repeatedly requiring Rowles to apply for SCRA protections and trying to collect on false account balances.
The company has also issued $6 million to date in payments to borrowers who were overcharged on their mortgages. JP Morgan will also provide an estimated $6.4 million in additional benefits to borrowers who may have been subjected to wrongful foreclosure practices.
Back in February, JPMorgan Chase announced that it was significantly enhancing its programs to help military and veteran customers. "Going forward, if Chase ever has a wrongful foreclosure sale on an SCRA-covered customer, Chase will forgive all of their remaining mortgage debt, as well," said Chase in its February statement.
“We will continue to monitor vigilantly how we serve military and veteran customers and will not be satisfied until we are 100 percent convinced that we are doing the right thing in every case,” said Charlie Scharf, chief executive officer of retail financial services. "We understand we have breached the trust of some of our military customers and we know we need to work hard to earn it back, and we are deeply committed to doing that. We want to work with the military community as partners going forward to become the best company in any industry to serve our military heroes."