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U.S. Senate Democrats press JPMorgan for details on debt collection practices -Breaking

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© Reuters. FILE PHOTO: A sign outside JP Morgan Chase & Co. offices is seen in New York City, U.S., March 29, 2021. REUTERS/Brendan McDermid/File Photo

By Pete Schroeder

WASHINGTON (Reuters) – Senior Democrats in the U.S. Senate are pressing JPMorgan Chase & Co (NYSE:) for details on how they take overdue credit card borrowers to court.

Senator Banking Committee Chairman Sherrod brown asked the bank for information Monday on the collection of overdue credit card bills. In particular, if “robosigning” is used to speed up legal documents, without proper review, he demanded details.

“We request that Chase provide detailed information regarding the bank’s credit card debt collection practices. Brown and five other Senate Democrats wrote that Chase shouldn’t use robo-signing when pursuing these collection lawsuits or other debt.

However, the regulators have fined the bank for their past robo-signing. A bank spokesperson stated that every affidavit filed by the bank is now reviewed individually by a trained employee to confirm the details. The information is then checked by another employee before being filed.

“If ultimately we can’t reach a repayment plan, we pursue litigation as a last resort. Thomas Kelly, a bank spokesperson said that we file lawsuits in 0.1% to 0.1% of credit card accounts.

After financial regulators discovered that the bank relied upon robo-signed documents in 2015, where an employee submitted an affidavit stating facts without having personal knowledge, the bank paid over $200,000,000 in penalties and refunds.

According to the Consumer Financial Protection Bureau, the failure of the bank to review its legal documents resulted into calculation errors that led some lawsuits to result in loans being ruled against the borrowers for inexact amounts.

The Democrats were inspired to question the Democrats by the January ProPublica and The Capitol Forum stories, in which JPMorgan found that there was an increase in lawsuits being filed against credit card borrowers who are past due. This is despite the fact that the practice had been stopped back at the beginning of 2011.

Kelly indicated that after informing regulators, the bank would resume litigation in 2019.

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