news.cuna.org/articles/108301-news-of-the-competition

News of the Competition

November 4, 2015

SACRAMENTO, Calif. (11/4/15)--JPMorgan Chase has agreed to pay $100 million to settle a pair of lawsuits in California alleging the big bank illegally collected debts from more than 125,000 card holders in the state (U.S. News Nov. 2). The nation’s largest bank will pay roughly $10 million to consumers as part of an earlier agreement worth $50 million, and it will pay an additional $50 million to the state to settle a lawsuit filed in 2013. JPMorgan also has vowed to reform practices that in the years leading up to the financial crisis included collecting incorrect amounts, selling bad credit card debt, and robo-signing court documents--a practice the state’s attorney general called a debt collection mill (U.S. News). “This settlement provides real relief to tens of thousands of Californians, including servicemembers, and prevents JPMorgan Chase from continuing these deceptive and illegal debt collection practices,” California Attorney General Kamala Harris said in a statement …

NEW YORK (11/4/15)--Billions of dollars in settlement money may not be the only penalty the big banks that contributed to the financial meltdown in 2008 will have to face. JPMorgan Chase, Bank of America and Citigroup, in addition to five other large U.S. banks, are expected to have their credit grades slashed by Standard & Poor’s (S&P) based on the belief that the federal government will be less inclined to provide relief during future crises (Bloomberg Nov. 2). Moody’s announced Monday that the big banks had their senior unsecured and nondeferrable subordinated debt ratings placed on negative credit watch, and that it will complete the full credit reviews by the end of the year. The Federal Reserve’s recent approval of a rule that will require big banks to hold extra debt in its coffers in case of a meltdown helped drive the decision. “The action reflects our belief that U.S. regulators have made further progress and provided more clarity in enhancing their plans for resolving systematically important institutions,” S&P said (Bloomberg). The credit rating agency added that “the probability that the U.S. government would provide extraordinary support to these institutions to enable them to remain viable” …