The J.P. Morgan Chase Watch

Click here for Inner City Press' weekday news reports, from the United Nations and elsewhere.

Updated April 17, 2023 Click here for Inner City Press front page        Click here for media reports

      For some previously coverage, see, e.g.,  "Chase - Bank One Merger Review Airs Dirty Laundry," by Russ Wiles, Arizona Republic, June 27, 2004, Pg. 4D; "Merger Menace: A David Takes on Banking Goliaths," by David Weidner, CBS.MarketWatch and AFX.com, April 23, 2004; "J.P. Morgan Makes $800 Billion Pledge," by Jennifer Harmon, National Mortgage News, April 19, 2004, Pg. 2; "Critics Voice Concerns on Takeover of Bank One," by Leon Lazaroff, Chicago Tribune, April 16, 2004; "Banks Make $800 Billion Promise: Bank One, J.P. Morgan Chase unveil community aid; merger hearings start," by Ken Stammen, Columbus Dispatch, April 16. 2004; "JPM Chase Makes CRA Pledge; Faces Merger Scrutiny," by Liz Moyer, American Banker, April 16, 2004, Pg. 18; "JP Morgan, Bank One To Help Poor Communities," Associated Press, April 15, 2004; "Fed Urged to Block JP Morgan/Bank One Merger," by Victoria Thieberger, Reuters, April 15, 2004; "Group Opposes Bank One Sale: Business with Predatory Lenders a Concern," by Ken Stammen, Columbus (Ohio) Dispatch, April 15, 2004; "J.P. Morgan Merger Slammed," by Nancy Dillon, New York Daily News, February 24, 2004, Pg. 67; "Grievance Against JPM / Bank One Deal," American Banker, January 23, 2004, Pg. 3; "Consumer Group Protests Bank Deal; Cites concerns for minority and low-income customers," by Kelly Quigley, Crain's Chicago Business, January 22, 2004. On February 23, 2004, ICP filed even more detailed comments. J.P. Morgan Chase, which is a top-ten subprime lender and securitizer, began quietly in August 2003 seeking to preempt all states' anti-predatory lending laws, by shifting its nationside consumer finance lending into a federally-regulated savings bank. Later, Chase shifted from a New York State-chartered bank to a national bank.  ICP, long concerned with Chase's disparate lending, began an inquiry into complaints filed against Chase with state regulators -- a venue that Chase now seeks to escape.  Some of these complaints are summarized below on this page, and are now being raised by ICP in opposition to Morgan Chase's April 2006 proposal to acquire 338 branches from Bank of New York. For or with more information, contact us.

As JPM Chase Cuts Off UN Missions, US Says Bailed Out Banks Are Free

By Matthew Russell Lee

UNITED NATIONS, January 13, updated -- When JPMorgan Chase wrote to countries' Missions to the UN and told them accounts would be closed in March 2011, several countries complained, to the UN and to the “host country,” the United States.

Thursday US Under Secretary of State Patrick Kennedy came to the UN in New York to speak to countries' Ambassadors about Chase's move. Afterwards, Inner City Press asked Kennedy if he -- or Hillary Clinton or Treasury Secretary Timothy Geithner, both of whom Kennedy said were involved -- had spoke with JPMorgan Chase.

  "We have had discussions with the major banks," Kennedy answered, later confirming that yes, this included Chase. But what was the response of Chase, whose CEO Jaime Dimon is often rumored to be a line for an appointment by the Obama administration?

Kennedy told the press that “we cannot tell a bank what to do.” Inner City Press immediately asked, What about the banks which took bailouts and still owe TARP money to the US and its taxpayers? "Could the government use its leverage?"

  Kennedy said he was not “technically competent to get into that level of detail," and told Inner City Press to ask the Treasury Department official who had also come to the UN. Video on Inner City Press YouTube channel here.

While the US Mission later said this Treasury Deparment official was Mark Poncy of the Office of Strategic Policy, Poncy never came to speak to the Press.

Inner City Press asked Kennedy if he thought the UN should go forward and re-rent space inside the UN under its Capital Master Plan to JPMorgan Chase, when this bank was turning its back on Missions of the countries which make up the UN.

“Ask the UN,” said Kennedy, who has responsibility at the State Department for Management, including at the UN. At the US Mission to the UN in New York, the Management position has remained with only an interim person, the genial but part time Professor Joseph Melrose.

At the UN's noon briefing, Inner City Press did ask Ban Ki-moon's spokesman Martin Nesirky if the UN would give space to JPMorgan Chase in the Secretariat building when it re-opens.

“Ask Chase,” Nesirky said. But Chase is already in talks with the UN as to which space to get in the repaired building -- not, apparently, the fourth floor space it previously had, but some other location.

Nesirky now said that he would not comment on negotiations. But is Chase's closing of UN Mission's accounts, Inner City Press asked, even part of the negotiations? Nesirky seemed to say he would look into this.

  JPMorgan Chase is not only interested in re-entering the Secretariat building when it re-opens: Chase also has a branch on the first floor of the DC-1 building which houses the UN Development Program. Many countries' Missions to the UN opened accounts at Chase because they were thus inside the UN. Will the UN allow this to continue?

  After the meeting with Kennedy, Inner City Press asked Iran's Permanent Representative as he came out if he thought Chase should continue to remain in UN buildings. No, the Ambassador said, UN space should go to banks which will deal with UN Missions.

  He spoke of the UN Federal Credit Union -- currently embroiled in a dispute about the account of the UN Staff Union -- and was asked if the UN should withdraw its own funds from a bank which in effect redlines Missions, like Chase.

Egypt's Permanent Representative told the Press about “transfer fees” while Turkey's Deputy Permanent Representative shrugged that “there are Turkish banks in New York.”

   Russian Permanent Representative Vitaly Churkin, asked in front of the Security Council about JPMorgan Chase's move, laughed and said "the ruble is a very strong currency," when you have the ruble you don't need anything else. But the others? Watch this site.

Update of January 14, 2011: the following arrived:

From: UN Spokesperson - Do Not Reply [at] un.org
Date: Fri, Jan 14, 2011 at 8:05 AM
Subject: Your questions on Chase Bank
To: Inner City Press

We can say the following in reply to your questions at the noon briefing:

Some ambassadors emerging from the US briefing about their accounts being shuttered think the UN should withdraw all its accounts with Chase. Has this been broached with the administration? Being weighed at all?

We understand that this was raised by one Member State delegate in the briefing with Ambassador Kennedy. The UN Secretariat has not been approached in this matter.

Will Chase open an office in the UN building after the CMP?

Under the CMP, the new UN building design includes space provision for banks. No agreements have been entered into with any banks for this space.

Update of January 3, 2011: J.P. Morgan Chase has been sued by the trustee attempting to recoup money for the companies of convicted Ponzi schemer Tom Petters. The money involved includes millions the bank took from Petters' accounts after his downfall and profits and fees it got from Petters' purchase of iconic camera company Polaroid. In a filing in federal court in Minnesota last week, Douglas A. Kelley, the court-appointed receiver for Petters' companies, alleged that J.P. Morgan knew, or should have known, that funds it seized from Petters' J.P. Morgan accounts after his arrest were fraudulently obtained. The suit also reiterated that J.P. Morgan and its One Equity Partners also knew, or should have known, the funds used by Petters to buy Polaroid were also from his Ponzi scheme....

Update of December 27, 2010: We take issue with the WSJ story on Christmas Eve entitled “Payday Lenders Go Hunting: Operations Encroach on Banks During Loan Crunch.” It implies that payday lenders are competing WITH JPMorgan Chase. But Chase is in fact lending to, enabling and profiting from the payday lenders. You'd think the WSJ would know.

Update of November 15, 2010: J.P. Morgan and its Washington Mutual Bank and Chase Home Finance LLC divisions are facing suits in Illinois and California that are seeking class-action status. The lawsuits allege "common law fraud and misrepresentation, as well as violations of state consumer fraud statutes."

Update of September 20, 2010: From JPMorgan Chase: “We are sorry for the difficulties that recently affected Chase.com, and we apologize for not communicating better with you during this issue.” Yeah, right...

Update of September 13, 2010: “BAE Systems Plc, a global company engaged in the development, delivery and support of advanced defense, security and aerospace systems announced Monday that it has engaged JP Morgan Chase to advise on strategic options with regard to the Platform Solutions business, including a possible sale.” Ah, arms manufacturers...

Why are we not surprised?

Protests of JPM Chase on Wall St, of Predatory Loans and Mining, Laissez Faire

WALL STREET, May 18 -- Of the Big Four American bank, JPMorgan Chase has perhaps benefited more than any other from the financial meltdown. While having securitized many and made some of the most predatory mortgage loans, it was given Bear Stearns, and then Washington Mutual on the cheap. It proceeded to close scores of WaMu branches.

Tuesday in lower Manhattan outside JPMorgan Chase annual shareholders meeting, environmentalists sang songs about the bank's support of mountain top removal mining. As Inner City Press has reported, JPMorgan Chase pays former UK prime minister Tony Blair as an environmental consultant.

  The bank's security officers handed out leaflets about less than living wages from Chase's subcontractors Allied Barton and Summit Security. A protest of predatory lending by Chase was right around the corner, including NYRL, CRA-NC and, in from West Coast including wtih wronged borrowers, the California Reinvestment Committee. "What do we want? No redlining! When do we want it? Now!"

  Fair Finance Watch got an early copy of JPM Chase's 2009 mortgage lending on disk. Its analysis, the first in the country, found that in 2009 JPMorgan Chase was even more disparate to Latinos, confined them to higher-cost mortgage loans as defined by the Federal Reserve 1.98 times more frequently than whites, almost as pronounced as its disparity between African-Americans and whites, 2.17.

Still Chase and its CEO Jaime Dimon lobby against regulatory reform, and call it unfair that they are tarred with the stigma of the bailout they accepted. Dimon's speech last weekend at Syracuse University was protested, although some spun it as a success, with cheers for his commencement speech about free thinking. Laissez faire is more like it. Private profits, socialized risk.

JPMorgan Chase helped cause the collapse of Lehman Brothers Holding Inc. by demanding more collateral and changing guarantee agreements, the bankruptcy examiner said last week. “The demands for collateral by Lehman’s lenders had direct impact on Lehman’s liquidity pool,” said Anton Valukas, the U.S. Trustee-appointed examiner, in a 2,200-page report filed in federal court, also in lower Manhattan.

Footnote: Simultaneous with the protest and shareholders' meeting, Chase's previous Community Reinvestment Act officer organized a CRA breakfast talk. At least two activists were asked to skip the protest in order to speak, but declined. Willis is known to oppose any legislation to expand CRA to cover, for example, investment banking including the securitization of subprime mortgages.

  Rather, he is promoting a more limited regulatory fix to CRA, on such matters as expanding the areas in which banks are assessed. Whether legislators like House Banking Committee chair Barney Frank, who argued CRA should not be under the Consumer Financial Protection Agency, will now move forward with the CRA modernization bill is not yet known. Watch this site.

Update of May 17, 2010: J.P. Morgan Chase has removed itself from the running for RBS Sempra's energy-trading and retail-energy-supplier businesses, largely because of expectations of a "Volcker Rule" that would force banks to exit from proprietary-trading businesses. Good. There will be a protest May 18...

Update of April 26, 2010: FOIA, and Citigroup's cheapskatery leading to JPMorgan Chase's gain, in the news: Citigroup Inc.'s unsuccessful bid for the teetering banking operations of Washington Mutual Inc. proposed that the U.S. government absorb a majority of the thrift's loan losses and limited Citigroup's financial exposure to $10 billion, according to a document released by regulators. Terms of the offer by the New York bank previously were kept secret by the Federal Deposit Insurance Corp., which sold the failed banking units to J.P. Morgan Chase & Co. for $1.88 billion in September 2008. The document was disclosed following a Freedom of Information Act request...

Update of April 19, 2010: Three former JPM Chase executives Denis O'Leary, Stephen Rotella and Harry DiSimone have formed Encore Financial Partners, funds raised by Goldman Sachs, to "target" U.S. based banks...

Update of April 12, 2010: In the first study of the just-released 2009 mortgage lending data, Inner City Press / Fair Finance Watch has found that JPMorgan Chase confined African Americans to higher-cost loans above the Federal defined subprime rate spread 2.17 times more frequently than whites. JPM Chase confined Latinos to higher-cost loans above the rate spread 1.98 times more frequently than whites, the data show. 2009 is the sixth year in which the data distinguishes which loans are higher cost, over the federally-defined rate spread. Further studies will follow.

Update of April 5, 2010: JPM Chase's Dimon remains both arrogant and evasive. "'For JP Morgan Chase, it was not a question of access or need–to the extent we needed it, the markets were always open to us–but the program did save us money,' Dimon said. J.P. Morgan stopped using the guarantees in April 2009 because 'it just added to the argument that all banks had been bailed out and fueled the anger directed toward banks.' Dimon d idn’t say how much the bank saved from the FDIC’s lending program." Why not?

Update of March 22, 2010: The 2d Circuit Court of Appeals has upheld the slap down of the Federal Reserve for withholding information about a portfolio of securities supporting a loan extended by the Fed in connection with J.P. Morgan Chase & Co.'s acquisition of Bear Stearns...

Update of March 15, 2010: JPMorgan Chase helped cause the collapse of Lehman Brothers Holding Inc. by demanding more collateral and changing guarantee agreements, the bankruptcy examiner said last week. “The demands for collateral by Lehman’s lenders had direct impact on Lehman’s liquidity pool,” said Anton Valukas, the U.S. Trustee-appointed examiner, in a 2,200-page report filed in Manhattan federal court. “Lehman’s available liquidity is central to the question of why Lehman failed.”

Update of March 8, 2010: JPM Chase is among the two biggest RAL lenders. Rather than publicly or even privately urging these big banks to stop RALs -- as even the FDIC has done with smaller institutions like Republic -- the OCC issued a vague policy guidance that provides no penalties, http://www.occ.gov/ftp/bulletin/2010-7a.pdf While JPM Chase claims its fees are clear -- $32 plus one percent of the loan -- it also has a $10 technology access fee. This is a trillion dollar institution, engaged in usurious lending. And the band played on..

Update of March 1, 2010: Bottom feeding subprime lender World Acceptance, charging interest rates up to 215%, is enabled by credit lines from JPM Chase, among others. It feasts off repeated refinances and roll overs, using the rule of 78s to fleeces its borrowers. Does Chase have any standards for the subprime lenders they will lend to? JPM Chase was previously exposed by Inner City Press / Fair Finance Watch for extensive lending to pawn shops and high cost check cashers. Even post crisis, the sleaze just continues. Watch this site.

Update of February 22, 2009: Why are we not surprised, about JPM Chase? "A federal judge has rebuked J.P. Morgan Chase & Co. for taking part in an what he called an "end run, if not a down right sham" in the way it arranged a $225 million loan deal for Mexican telecom company Empresas Cablevisión SAB. In a ruling unveiled late last month in U.S. District Court in Manhattan, Judge Jed Rakoff said the New York bank structured the deal so it would have allowed a major competitor of Cablevisión to gain confidential information about the company, which is Mexico's largest cable-television operator. That competitor, Telmex Internacional SAB, is owned by Mexican billionaire Carlos Slim."

Update of February 15, 2010: annual reports say J.P. Morgan has $18.4 billion in exposure to Spain....

Update of February 1, 2010: At J.P. Morgan Chase, total buyback demands from the GSEs surged to $5.3 billion in 2009 from $4 billion in 2008, according to Barclays Along with the WaMu acquisition, the sleaze is growing.

Update of January 25, 2010: So where will the financial crisis commission head, with the answers given by Jaime Dimon?

Update of December 7, 2009: In repurchases from Fannie Mae and Freddie Mac, J.P. Morgan, as of the third quarter, had $1.1 billion set aside to meet repurchase claims from investors, including those from Fannie and Freddie, because of problematic underwriting. The repurchase reserve "won't run at that high level," claimed Michael Cavanagh, J.P. Morgan's chief financial officer, in October during the quarterly earnings conference call, but "looking ahead it will still be something though." Yep...

Update of November 15, 2009 --

As Blair Lobbies for Wataniya, Do Kuwait and JPM Chase's Arranger Role Spell UN Conflict of Interest?

By Matthew Russell Lee

UNITED NATIONS, November 13 -- When Tony Blair does business, who does he work for? He represents the Quartet, and thus the UN, on development in the Occupied Palestinian Territories. He has been paid by JPMorgan Chase as a consultant, and presumably works for them. When he acts in the West Bank for the Wataniya cell phone company, who is he working for?

  The UN has repeatedly claimed that there would and could be no conflict of interest between Blair's paid position for JPMorgan Chase and his work in the Palestinian Occupied Territories. When Inner City Press asked Blair, after a meeting of the Quarter in the Conference Room 4 in UN Headquarters, about any safeguards in place for his UN and JPMorgan Chase roles, he scoffed. A Blair staffer confirmed that he continued in JPM Chase's employ.

  This week, Tony Blair attended a press conference announcing the finalization of Wataniya's deal, which Blair "negotiated." At the UN noon briefing on November 11, Inner City Press asked about this last:

Inner City Press: yesterday, Tony Blair was in Ramallah, and he’s described as having negotiated on behalf of a cell phone company with the Israeli Government. There’s a whole press conference also that noted his role for the Quartet and for the UN. So I’m wondering, did he do this on behalf of the Quartet and the UN and what is the UN’s knowledge, do they have any knowledge on this business negotiating activity?

Deputy Spokesperson Marie Okabe: I have no knowledge of that.

  Even forty six hours later, no answer has been provided. But even cursory research reveals that Blair's employer JPMorgan Chase served as a "mandated lead arranger" for the acquisition of Wataniya. Click here for the document.

  So again, what safeguards are in place? Who is Tony Blair working for?

  Tony Blair Associates has as a client Kuwait, and by implication its royal family, while Blair has met with the finance minister of Kuwait while representing JPMorgan Chase. Wataniya Palestine is substantially (57%) owned by investors from Qatar and... Kuwait. For the former, it's Qatar Telecom. But for the later, it's the Kuwait Investment Authority, which operates on behalf of the State of Kuwait -- Tony Blair Associates' client.  So when Blair lobbies for Wataniya, who is he representing?

  While awaiting the UN's answers, we note that in June 2009, "Wataniya Palestine CEO Alan Richardson recently called on Middle East envoy and former British prime minister Tony Blair to intervene on behalf of Wataniya to get the frequency released. Richardson previously has been involved in controversial cell phone projects in Iraq, with Orascom and Iraqna, contracts which the U.S. Pentagon urged the Coalition Provisional Authority to cancel.

  So to the degree Tony Blair is working for Richardson, this too is problematic. But beyond the UN and Quarter, is Blair working for Kuwait? With JPMorgan Chase's documented mandate lead arranger role for the acquisition of Wataniya, there is a conflict which, it would seem, will require action. Blair is dismissive, and the UN appears cowed. Watch this site.

Update of November 9, 2009: So Jaime Dimon's father Theodore or Ted being given a job at JPMorgan Chase, can we call that nepotism?

Update of November 2, 2009: JP Morgan Chase's CEO James Dimon has trashed the proposed Consumer Financial Protection Agency, saying it "would create cumbersome, costly restrictions and the banks will likely pass those costs onto the consumers." Let's see how it work for Chase...

Update of October 26, 2009: J.P. Morgan Chase & Co. made nearly $50,000 in political donations through its PAC in September, counted by WSJ. The company donated $2,000 to Alabama Sen. Richard Shelby, the senior Republican on the Senate Banking Committee. The company also donated $1,000 to Pennsylvania Rep. Paul Kanjorski, the No. 2 Democrat on the House financial-services panel.

Update of July 20, 2009: JPMorgan Chase has a Community Reinvestment Act duty in West Virginia and Kentucky, for example, and in neighboring states. Meanwhile, Chase is funding 6 out of the top 8 corporate producers of MTR coal in Appalachia. (Massey, International Coal Group, Arch Coal, Consol Energy, TECO and Foundation Coal.), per RAN. Chase was a co-lead arranger and underwriter for more than $1 billion in new financing to Massey Energy less than 12 months ago. Massey Energy is the biggest and most controversial MTR mining company in Appalachia, and is responsible for nearly 20% of all MTR coal mined. Others have stopped funding it -- why not Chase?

Update of July 13, 2009: While the fate of the CRA in the CFSA legislation remains in the air -- or in the hands of Barney Frank -- we recommend this week two articles in the Charlotte Observer, both about Home Mortgage Disclosure Act. Inner City Press / Fair Finance Watch published its analysis of the 2008 data back in early April. But as in previous years, the Observer beat up other daily newspapers with its detailed story. Notably, the Observer story -- and that of ICP / Fair Finance Watch? -- does not include the 2008 loans of Washington Mutual. JPMorgan Chase is claiming that it had no duty to file the data, because of the structure of how the regulators let JPMC buy WaMu. This is a major loophole that should and will be pursued.

The Observer reports that "the HMDA data supplied by banks, for example, doesn't currently include borrowers' credit scores, the down payment amount and other details that would give a clearer picture of a lenders' decisions to make or deny a particular loan" and goes on to note that Inner City Press / Fair Finance Watch "has long argued the public needs more information about the role race plays in lending. Now that many banks are recipients of federal bailout dollars, [ICP] says they should submit to stricter HMDA requirements. 'It's the least they can do,' [ICP] said."

On the West Coast, JPM Chase is refusing to help Californians in their time of need, announcing it will not accept the State's IOUs. As noted by the longtime DC watchdog of the Associated Press, "clearly, the federal government has leverage over these institutions," said [ICP]. Hundreds of banks have received aid from the government as part of its $700 billion rescue plan last fall."

Update of April 13, 2009: Beyond the closings, "before it collapsed last September, Washington Mutual Inc. spent roughly $1 billion on a branch-building binge that replaced bank-teller windows with free-standing counters and cash-dispensing machines. New owner J.P. Morgan Chase & Co. is now dismantling it all, right down to the signs that promise "free checking, free smiles," and basically dragging the former WaMu branches back to the past. Traditional branches 'are superior in every way,' said Charles Scharf, who runs the Chase unit of J.P. Morgan. 'They might be boring, but they're practical.'" What ever happened to Chemical Bank's promise of five dollars if you're not served in five minutes?

Update of April 6, 2009 -- In the first study of the just-released 2008 mortgage lending data, Inner City Press / Fair Finance Watch has found that JPMorgan Chase was disparate to Latinos, confined them to higher-cost loans 2.10 times more frequently than whites, almost as pronounced as its disparity between African-Americans and whites, 2.26. Note: 2008 is the fifth year in which the data distinguishes which loans are higher cost, over the federally-defined rate spread of 3 percent over the yield on Treasury securities of comparable duration on first lien loans, 5 percent on subordinate liens.

Update of March 30, 2009: Geithner Promotes Megabanks' including JPM Chase's Monopoly, in DC as at Fed, 17 Cut to 7 on Derivatives

Byline: Matthew R. Lee of Inner City Press on Wall Street: News Analysis

NEW YORK, March 28 -- Seven megabanks' renewed grab for monopoly power in the over the counter derivatives market shows how little Wall Street's real power has changed in the transition from the Bush to Obama administrations.

  The banks, including Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley, Barclays, Credit Suisse and Deutsche Bank, are paying over $1 million to p.r. firm Prism Public Affairs to "educate" the voters weary of bonus and bailouts that those who caused the crisis should benefit from it.

  Already, Congress members hungry for campaign contribution have submitted to closed door briefings by Ed Rosen of the law firm Cleary Gottlieb, who drafted the legislative language for monopoly.

  The connector in this story is Timothy Geithner, under Bush the president of the Federal Reserve Bank of New York and now Obama's Treasury Secretary. Geithner in June 2008 convened closed door meetings with 17 banks, essentially allowing them to propose and draft their own rules for the derivatives market.

    This led to advocacy by the Fair Finance Watch that Geithner's meetings were in fact rule making that excluded the public in violation of the Administrative Procedure Act, and by Inner City Press, as media, to get the meetings opened to journalists and the public.

March 16, 2009

In DC, "Inevitable" Fraud as Obama Jokes with JPM Chase

Byline: Matthew Russell Lee of Inner City Press

WASHINGTON, March 12 -- As President Barack Obama promises to find and "call out" misuses of the stimulus package, and to review the over 7,000 earmarks in the budget bill he signed this week, the chairman of his Recovery Act's Transparency and Accountability Board, Earl Devaney, told the Press of a "naive impression that given the amount of transparency and accountability called for by this Act, no or little fraud will occur... some level of waste and fraud is unfortunately inevitable."

   Accordingly, the same is true not only at the United Nations -- despite Obama not mentioning the need for UN reform in his comments Tuesday after meeting Secretary General Ban Ki-moon -- but also with the bank bailout funds of the Troubled Assets Relief Program. Nevertheless, Obama joked with JPMorgan Chase's Jaime Dimon at the Business Roundtable's gabfest Thursday in Washington. As a smaller banker asked the final question of Obama -- no questions were taken after his meeting with the UN's Ban -- Obama said that banking has of late become complex, and that he could ask "Jaime" about it.

  Also on the White House's list of Roundtable attendees was Citigroup's longtime board member and now chairman Richard Parsons. Citigroup veered into predatory lending, JPM Chase at a minimum securitized it, while lending to payday lenders and pawnshops. What then is so funny?

Update of February 16, 2009: Before Congress last week, JPMChase's Jaime Dimon complained, “we have a Byzantine alphabet soup of regulators,” and that banks and lenders have to deal with the OTC, the CFTC, the SEC and so on. He pontificated that it should be a U.S. system and globally regulated, and that no one should try to create a new regulator. He suggested the Federal Reserve -- and why not, since the Fed delivered Bear Stearns to him and Chase, which then got WaMu as well... The Fed's been good to Morgan Chase.

Update of February 9, 2009: JPMorgan Chase has just awarded bonuses, on the theory that particular units didn't lose money. Your tax dollars at work...

Update of February 2, 2009: Beyond the branch closing listed below, JPMorgan Chase plans to axe another 13 in San Antonio -- the countdown will continue.

January 26, 2009

As JPMorgan Chase Shutters WaMu Branches, Regulators Missing, Commitments Gone

Byline: Matthew R. Lee of Inner City Press on Wall Street: News Analysis

NEW YORK, January 23 -- JPMorgan Chase is moving to closed down dozens of the Washington Mutual bank branches the government allowed it to acquire last year with no public notice or comment period. In Dallas, Chase has targeted 23 WaMu branches for closure, and another six in Fort Worth. In the Chicago area, Chase says it will shutter 57 WaMu locations. More branch closings will follow across the nation.

  Community and consumers groups are belated protesting the acquisition, which was a one of a slew of so-called emergency transactions on which no Community Reinvestment Act comments were considered, including the accession of Goldman Sachs and Morgan Stanley to bank holding company status, and Bank of America's now discredited acquisition of Merrill Lynch.

   JPMorgan Chase benefited from regulator-protected acquisitions not only of WaMu but, before that, of Bear Stearns. As first reported by Inner City Press, Bronx-based Fair Finance Watch submitted to the Federal Reserve Board comments on these transactions, but was told that emergency did not allow consideration of the issues raised, including prospective branches closings.

  JPMorgan Chase has now told groups who have asked if it will continue Washington Mutual's CRA programs and commitments that since there is no more Washington Mutual, there is no more commitment.

 This comes in the wake of JPMorgan Chase's Jaime Dimon reversing himself from a stated commitment to mortgages through brokers to abruptly shutting down Chase's wholesale mortgage unit. While groups are told this will give Chase more control over the terms of loans, brokers point out that Chase ultimately had control in the wholesale business, too.  Commitments are made to be broken, apparently, particularly those by companies the federal regulators bailed out or merged out of existence. What, the question grows, is Timothy Geithner's position on this Main Street issue?

Update: later on January 23, community groups were told that JPMorgan Chase plans to close over 40 WaMu branches in New York State...

Update of January 19, 2009: So Morgan Chase has closed its wholesale mortgage business, after virtually promising not to. They claim this way they can better control the terms of loans. But the ones they made through brokers, they made decisions on. Back on Nov. 6, 2007, David Lowman, CEO of JPMorgan Chase's home lending division, and Patrick Sheehy, business-to-business channel
executive at Chase Home Lending, told mortgage brokers of “an unwavering commitment to our wholesale … lending” business. Jamie Dimon made this type of about-face and close-down before. It's just what he does.

November 17, 2008

  Under the headline, "Economists offer support for Bernanke," this weekend's Wall Street Journal Europe quotes without qualification JPMorgan Chase economist Bruce Kasman that "Bernanke has done a good job." No mention that Bernanke gave Bear Stearns l and then Washington Mutual to JPM Chase, with no public comment period. Sure, if you were JPMC or Jaime Dimon, you'd lavish praise on Bernanke for these moves. But others?

Update of November 10, 2008:  So how many WaMu branches is JPMorgan Chase planning to close? The bank refuses to say, but we aim to find out...

November 3, 2008

At UN, Stiglitz Slams Chase For Misuse of Bailout, Federal Reserve for Predatory Lending

Byline: Matthew Russell Lee of Inner City Press at the UN: News Analysis

UNITED NATIONS, October 30 -- The $700 billion bank bailout should not be used for mergers to increase market share, economist Joseph Stiglitz told the Press on Thursday. Following a UN panel discussion about the global financial crisis, Inner City Press asked Stiglitz about predatory lending and, as an aside, if he would consider the post of Secretary of the Treasury. While not directly answering the latter, Stiglitz said that the current Secretary, Henry Paulson, is ignoring the Congressional intent of the bailout and is allowing the funds to be misused by the banks.

  Stiglitz specifically cited a conference call by JPMorgan Chase, in which an executive bragged that the $25 billion it is claiming from the bailout will make Chase "more active on the acquisition side or opportunistic side for some banks who are still struggling. And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment." Stiglitz called that an abuse, and also took a jab at the Federal Reserve, which he said had the power to crack down on predatory lending since 1994 but did not. Video here, from Minute 19:31.

Update of October 20, 2008: It's telling, in terms of how sloppy the corporate giveaways have been, that neither the Fed nor Treasury thought through how buying warrants in JPMorgan Chase would put Chase in the position of reducing book value or recording a loss. Expect the rule changing for the biggest banks to continue...

Update of October 13, 2008: Tales for a time of lawless regulators giving rubber stamp bank merger approvals without any public notice or comment -- on October 10, the Federal Reserve Board sent Inner City Press a partial response to a Freedom of Information Act request made back in March, about the Fed voting without public notice or comment to bail out JPMorgan Chase's acquisition of Bear Stearns without even following the law requiring the involvement of Fed governors. Six months after the fact, the Fed releases an April letter to Congress saying the Governor Mishkin, who has since left the Board, was in the air on a flight from Finland to the U.S. and therefore couldn't be involved. Click here to view. And now he's gone...

Update of October 6, 2008:  Now it's reported that JPMorgan Chase was looking at SunTrust, before it got WaMu for a song...

September 29, 2008: ...When Inner City Press / Fair Finance Watch complained to the Office of Thrift Supervision about the subprime practices of Washington Mutual's affiliate Long Beach Mortgage, the OTS responded that is was only concerned with WaMu's savings bank, not its finance company. WaMu never got CRA credit for Long Beach's loans, but now WaMu has failed and been bought at fire sale prices by bottom-feeder JPMorgan Chase...

Update of August 25, 2008:  Bernanke's spin: "the Federal Reserve took actions that facilitated the purchase of Bear Stearns and the assumption of Bear's financial obligations by JPMorgan Chase & Co. This experience has led me to believe that one of the best ways to protect the financial system against future systemic shocks, including the possible failure of a major counterparty, is by strengthening the financial infrastructure, including both the "hardware" and the "software" components. The Federal Reserve, in collaboration with the private sector and other regulators, is intensively engaged in such efforts. For example, since September 2005, the Federal Reserve Bank of New York has been leading a joint public-private initiative to improve arrangements for clearing and settling trades in credit default swaps and other OTC derivatives."

  So, the lesson learned from a bailout with no public comment is a rulemaking with the industry with no input from the public...

Update of August 18, 2008:  Like a coup leader trying to ex post facto legalize their seizure of power, the Federal Reserve has included in its "Legal Developments 2nd Quarter 2008" publication released last week its Orders - with no public comment allowed -- bailing out Bear Stearns and letting JPM Chase buy it, available at http://www.federalreserve.gov/Pubs/Bulletin/2008/pdf/legalq208.pdf .All the patina of legality with none of the content...

Update of August 4, 2008: Talk about a conflict of interest, and regulatory capture -- last week, the regulators and four big banks issued coordinated press releases. "Officials from banking giants Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. issued a joint statement saying, 'We look forward to being leading issuers as the U.S. covered bond market develops.'" And those they issued the statement with and for are supposed to objectively oversee them...

Update of July 28, 2008:  This week, from the mail bag, a story involving JPMorgan Chase --

Subj: JP Morgan Chase 

From: [Name withheld in this format]

To: Inner City Press

Date: 7/22/2008 9:29:41 P.M. Eastern Daylight Time

Dear Mr. Lee,

I am wondering if there are any other people who have had a similar problem to mine with JP Morgan Chase.  I am a 68 year old senior who lost her home to these vultures in an unbelievable manner.  In brief this is what happened to me.

Leon D. Black had just purchased WMC Mortgage Corp. when I did a refi with WMC in March 1998.... Loan was equity based.  I never received any copies of the loan documents and had  statements from WMC saying they were lost or destroyed.  Even had inter office communications at WMC as late as July 1998 referencing the loan documents.

 The loan was a bait and switch.  The reason for the refi was to permanently get rid of a loan I had with, The Money Store.  WMC was to be the new first mortgagor AFTER they paid, The Money Store ("TMS").  Loan was to be conventional fixed rate.  Instead payments went from 2900.00 a month to 4800.00 a month by September 2000.  I had little recourse but to try and save my home of 18 years and its tons of equity and so, I filed Bankruptcy.  Big mistake!

 I was never told that the loan was sold to Fairbanks four months before I filed BK.  WMC fraudulently represented themselves throughout my BK as the first mortgagor when they were not.

 I had a Confirmed Plan in Bk that was current yet WMC somehow managed to have the Stay Lifted in January 2005.  My home was sold at Trustee Sale by JP Morgan Chase on June 22, 2005.... In June, 2006....I was sent a thank you letter from HomEq on behalf of TMS who unknown to me had closed their doors a month after my loan closed with WMC.  Oddly, during my Bk I would get Notices from FirstUnion who could never find any reference to me, not even by my social security number.  Turned out WMC used someone else's SS number for my loan, I don't know why but they did.  First Union had taken over TMS which was ultimately taken over by HomEq. The HomEq letter also contained the cancelled Note & Deed of trust for TMS.  In short, my home was ultimately sold by JP Morgan Chase who knew there was always a question that TMS was never paid and none of these vultures had any standing to sell my home on June 22, 2005 and as noted in the Trustee Guaranty Report which clearly showed the only first mortgage to be TMS for 281,000.00.  They paid the TMS mortgage off in full three months after they sold my home at trustee sale, using a company called ALTA which  turned out to be another alias of Fairbanks.

Update of July 14, 2008: Yet more approvals with no prior public notice, much less comment: In a letter dated July 1, the Fed granted a request to allow JPMorgan Chase Bank to purchase a $44 billion portfolio of Bear Stearns derivative transactions and hedges acquired by the holding company when it bought Bear Stearns. The portfolio includes Bear Stearns Forex Inc. and Bear Stearns Credit Products Inc. The Fed spun that "the proposed transaction in this case is a byproduct of a one-time corporate reorganization and would facilitate the integration of recently merged companies," and granted the waiver. The Fed also granted JPMorgan's request to exempt from Fed rules certain transactions between the firm and Maiden Lane LLC - the limited liability company set up with the Federal Reserve Bank of New York to hold some Bear Stearns assets.  "Although (JPMorgan Chase) has a substantial subordinated exposure to Maiden Lane, the (New York Fed) has the predominant economic interest in Maiden Lane," the letter from the Fed to JPMorgan, dated June 26, stated.  "Granting the exemption also appears to be in the public interest because it will facilitate the consummation of the (New York Fed) facility," the Fed letter said. So the Fed considers consummation of its own transaction to be in the public interest. But did they hear from the other sides?

Update of July 7, 2008: Ex-Chaser Don Layton, now at E-Trade, has scooped up an old crony, Joe Sclafani. Like we said, it's a sinking ship...  CHASE HEALTHADVANCE's pitch to patients: "So go ahead and schedule that procedure you have always wanted." Pitch to doctors: "Refrigerators, carpet, televisions, even tires are advertised with interest-free financing. This is what attracts consumers." Percentage of dentist's fee that lender keeps: 4.9% on no-interest loan for three months, up to 13.9% on no-interest $5,000 loan for 24 months, 4.99% on extended-payment plans.  Finance terms: No interest for up to 24 months (if balance not paid in full, retroactive APR of up to 27.99%) of fixed APR of 11.99% to 27.99%. -CR

Update of June 30, 2008:   Weeks late, the Federal Reserve has written to Inner City Press that

This is regarding your FOIA request for documents related to the JP Morgan / Bear Stearns transaction. We have interpreted your request to include the Board meeting minutes from Mar. 14 and 16. The minutes are now available online on the Board's public website:
http://www.federalreserve.gov/newsevents/press/other/20080627a.htm
We will be contacting you shortly about the scope of the remainder of your request.

   For now, as even the Dow Jones story on the minutes reports, "four Fed board members were involved in making the decision to come to the rescue of Bear, the Fed's minutes show."

Update of June 23, 2008: JPMorgan Chase's securities arm sued a former private banker on Monday, alleging he stole confidential and proprietary information about the bank and its clients.  The lawsuit, filed in U.S. District Court in Manhattan, is seeking an injunction against Hernan E. Arbizu, a former senior private banker for the Argentina and Chile region at J.P. Morgan Securities' private banking department in Manhattan. Live by the sword...

Update of June 16, 2008: This week, Inner City Press / Fair Finance Watch filed comments against the Federal Reserve's secret process with banks, in essence a rule-making excluding the public even those the topic, credit derivatives, has come up because of the subprime lending crisis. The financial institutions invited -- and now challenged -- included JPMorgan Chase. The Administrative Procedures Act (5 U.S.C. Section 553) and related laws require that when the government engages in rule-making, it must provide notice to the public, and allow and weigh public comments.  Press accounts make clear that the financial instruments and regulatory issues discussed behind closed doors at the FRBNY on June 9 are related to issues of public interest, which in fact are disproportionately impacting low- and moderate- income people and communities of color -- subprime and predatory mortgages.  Watch this site.

Update of June 2, 2008: J.P. Morgan Chase, too, has been understating its borrowing costs for LIBOR calculations, in order to hide what those in the know think of the company and its prospects...

Update of May 19, 2008:  JPMorgan Chase disclosed last week in its quarterly report that it received a "Wells Notice" from the Securities and Exchange Commission indicating the SEC staff is considering recommending an enforcement action "in connection with the bidding of various financial instruments associated with municipal securities." And this is who the Fed chose for Bear Stearns?

Update of May 12, 2008: This week, from the mailbag --

Subj: Fwd: Chase mortgage fraud

Date: 5/2/2008 3:08:29 P.M. Eastern Daylight Time

From: [Name withheld in this format]

To: Inner City Press

I have been with Chase for years.  This is my 3rd mortgage through them.  When I applied for the mortgage, they told me I needed to take a 2nd out so I did not have to pay the PMI.  They told me this 2nd loan would be at 9.6% but could easily be paid off at anytime by me.  They told me I had to do this b/c the house I was buying appraised for $170,000 (we were buying it for 159,000)  I never received any other good faith estimates in the mail beside the 1st one at 9.6% for a loan of $8000.  I called them weeks before closing stating I wanted to take out $18000. (John Priesta from Chase).  The loan was then given to woman named Heather at Chase.  I asked Heather if there were any problems with the loan and if I would be getting anything in the mail stating the new APR..she said no.  A week before closing she called and said the loan apr would be 11%.  Since it was so close to closing I said that was fine since I was told I could pay it off early.  Closing was on Feb 28th and 5 pm.  when arriving at Conrad Law firm in WV they as well as the seller's of the house (Bank of Charlestown) were shocked that they had closing papers there with an interest rate of 12.4% and that if we paid the loan off early we would receive a penalty!  We were never notified of this, and b/c it was so late at night..nothing could be done about it..we were forced to sign the papers or lose the house.  When I phoned Chase a supervisor told me he couldn't do anything b/c I signed the papers.  I then phoned my loan officer John Priestas who refused to take my calls, he would only e-mail me and avoided my ?..why wasn't I notified of this rate hike??  I then turned to Susquehanna bank to take over my loan..they told me that my credit was almost 700 and that the rate shouldn't have ever been that high..I was also told (less than 2 months after Chase appraised my home) that my house appraised for $220,000 and I shouldn't even had to pay a PMI!!  Why is Chase practicing Mortgage Fraud..I have phoned John Priestas supervisor several times and they will not return my call.  I was also told that a credit check revealed that Chase check my credit score several unnecessary times..affecting my score.  In the summer of 2007 I received several papers stating my and my husbands credit scores (that time they were 723)..John assured me that the printer just spitted them out..that it would not affect my credit score...

  We aim to have more on this....

Update of May 5, 2008: Step by sleazy step, the FERC last week rubber stamped J.P. Morgan Chase to bolt-on Bear Stearns Cos. energy assets to its portfolio, saying that the deal won't have any harmful effect on prices or "eliminate a competitor" -- what?  Bear Stearns has a number of energy affiliates selling electricity on a wholesale basis at market-based rates in the Midwest. J.P. Morgan also has subsidiaries that own interests in electricity generation facilities. We'll see...

Update of April 28, 2008: "This week you'll see several organization announcements from our management committee about their direct reports, and we expect the rest by the end of the month," Steve Black and Bill Winters, co-heads of J.P. Morgan's investment-banking business, told employees in a memo sent Monday. "People selection is the most important and most difficult task in any merger, and we want to make sure we spend the time to get it as right as we can." They promised to inform all J.P. Morgan Chase and Bear employees whether they would have a job no later than the merger's expected close on June 1. We'll see....

Update of April 21, 2008: The Federal Reserve continues to hit new lows.  In an order dated April 1 (mailed out on April 11), the Fed purported to review -- with no public input -- and approve JPMorgan Chase's proposal to acquire Bear Stearns and its New Jersey-based bank, Bear Stearns Bank & Trust. "Based on all the facts and circumstances, the Board has determined that an emergency exists requiring expeditious action on the proposal." So much for CRA... To be continued.

Update of April 14, 2008: Delaware vice-chancellor Donald Parsons has stayed litigation challenging the proposed acquisition of Bear Stearns by JPMorgan Chase, deferring to a similar court case in New York. Parsons noted that the Delaware lawsuit mirrors five lawsuits that have been consolidated on an expedited basis by the New York Supreme Court. That court has scheduled a May 8 hearing on a preliminary injunction barring a shareholder vote to approve the deal. "The judge also noted the unique circumstances of the planned government-assisted merger" -- so now, the Federal Reserve's outrageous exclusion of any public review of the deal is used by court to avoid judicial review...

And this is not even dealing yet with the Fed's sleazy deal with Blackrock, answers on which are due on April 18...

Update of April 7, 2008: In the first study of the just-released 2007 mortgage lending data, Inner City Press / Fair Finance Watch finds that JPMorgan Chase in 2007 confined African Americans to higher-cost loans above this rate spread 2.44 times more frequently than whites, according to Fair Finance Watch. Chase's disparity to Latinos was 1.60. The percentage of Chase's loans which were over the rate spread actually went up from 2006 (19.28%) to 2007 (20.96).

            In its headquarters Metropolitan Statistical Area (SA) of New York City, Chase confined African Americans to higher-cost loans above the rate spread 2.92 times more frequently than whites. Chase's disparity to Latinos was 2.50.

            In the New Orleans MSA Chase confined African Americans to higher-cost loans above the rate spread 2.25 times more frequently than whites. It denied over 50% of mortgage applications from African Americans. Meanwhile the Federal Reserve is bending if not breaking applicable law to allow Chase to acquire Bear Stearns and bail it out from its speculative involvement in predatory lending.

Update of March 31, 2008: While the Federal Reserve at least agreed to hold two public hearings on Bank of America's application to buy Countrywide Financial, it has remained silent on its highly-questionable bail-out of Bear Stearns via JPM Chase. ICP Fair Finance Watch has submitted a second comment:

                        March 30, 2008

Board of Governors of the Federal Reserve System
Attn:  Chairman Ben Bernanke, and Secretary & FOIA Officer
20th St and Constitution Ave, N.W. Washington, DC 20551 c/o FRBNY 

Re:       Second Comment and Freedom of Information Request Regarding the FRS' Communications with, Consideration and Authorization of JPMorgan Chase  (with its affiliates, "Applicants") to lend to and acquire Bear Stearns (with its affiliates, "Target")

Dear Chairman Bernanke and others in the FRS: 

            On behalf of Inner City Press/Community on the Move and its members and affiliates, and the Fair Finance Watch (collectively, "ICP"), this is a second comment and request under the Freedom of Information Act (5 U.S.C. § 552; "FOIA") regarding the Federal Reserve System's (the "FRS'") communications with, consideration and authorization of JPMorgan Chase  (with its affiliates, "Applicants") to lend to and prospectively acquire Bear Stearns (with its affiliates, "Target").

            While JPM Chase is claiming that it somehow has the necessary regulatory approvals, it is imperative that the FRB conduct a public review of this unprecedented proposal, including in light of the material hereby formally submitted to the FRS. ICP hereby contends that regulatory approval is needed, that public input must be allowed, and that the FRB is conflicted in reviewing this transaction and these requests, as it has become a participant in the deal and underlying predatory loans. 

            Bear Stearns' involvement in questionable subprime lending led to its problems. Now it has emerged, with documentary proof, that JPM Chase has been involved systemically in the worst forms of predatory lending, fraudulently inflating borrowers' income in order to make loans they can't afford. See, now in the public record, Chase's memo about how to "game" its ZiPPY system:

ZiPPY Cheats & Tricks...

If you get a "refer" or if you DO NOT get Stated Income / Stated Asset findings.... Never Fear!! ZiPPY can be adjusted (just ever so slightly)
 
Try these steps next time you use Zippy! You just might get the findings you need!!

* Always select "ALTERNATE DOCS" in the documentation drop down.  

* Borrower(s) MUST have a mid credit score of 700.

* First time homebuyers require a 720 credit score.  

* NO! BK's OR Foreclosures, EVER!! Regardless of time!

* Salaried borrowers must have 2 years time on job with current employer .  

* Self employed must be in existence for 2 years. (verified with biz license)

* NO non-occupant co borrowers.

* Max LTV/CLTV is 100%

Try these handy steps to get SISA findings . . . 
1) In the income section of your 1003, make sure you input all income in base income. DO NOT break it down by overtime, commissions or bonus. 

2) NO GIFT FUNDS! If your borrower is getting a gift, add it to a bank account along with the rest of the assets. Be sure to remove any mention of gift funds on the rest of your 1003.

3) If you do not get Stated/Stated, try resubmitting with slightly higher income. Inch it up $500 to see if you can get the findings you want. Do the same for assets. 

It's super easy! Give it a try! If you get stuck, call me . . . I am happy to help!

See also, 

Subj: Chase Home Finance LLC 
Date: 3/27/2008 11:31:14 P.M. Eastern Daylight Time
From: [Name withheld in this format]
To: Inner City Press

 Please take a look at what Chase Home Finance LLC is doing. 

If it weren't happening to me, I would think this was a scam.

They haven't to my knowledge started any foreclosure proceedings yet, but although I am current on both my mortgages, they are sending letters/statements that I am 2 months behind. 

Here in Georgia (a non-judicial state for foreclosures) one only has to be 3 months behind.

I have emailed Chase, written to them, to no avail.  I refuse to answer their calls as I find them to be harassing and the one time I did call them, I was assured that all was well.  Yet I still receive incorrect statements. 

Something needs to be done on behalf of those who have already fallen prey and those who may become victims.

            Not only due to the highly-questionable FRB assistance to the bail-out of a bottom-feeding investment bank by an above-confirmed predatory lender, but also the above consumer fraud issues, the FRB must hold public hearings.

Update of March 16, 2008:  WashPost - Guardian (UK)  The day after news of the Federal Reserve's murky bailout of Bear Stearns through JPMorgan Chase, Inner City Press / Fair Finance Watch filed with the Federal Reserve Board in Washington, and the Federal Reserve Bank of New York, a complaint and request under the Freedom of Information Act, portions of which follow:

                        March 15, 2008

By fax to DC and NY

Board of Governors of the Federal Reserve System
Attn:  Chairman Ben Bernanke, and Secretary & FOIA Officer
20th St and Constitution Ave, N.W. Washington, DC 20551

            Re:    Petition, Challenge and Freedom of Information Request Regarding the FRS' Communications with, Consideration and Authorization of JPMorgan Chase  (with its affiliates, "Applicants") to lend to, do due diligence on and prospectively acquire Bear Stearns (with its affiliates, "Target")

Dear Chairman Bernanke and others in the FRS:

         On behalf of Inner City Press/Community on the Move and its members and affiliates, and the Fair Finance Watch (collectively, "ICP"), this is a petition, challenge and request under the Freedom of Information Act (5 U.S.C. § 552; "FOIA") regarding the Federal Reserve System's (the "FRS'") communications with, consideration and authorization of JPMorgan Chase  (with its affiliates, "Applicants") to lend to, do due diligence on and prospectively acquire Bear Stearns (with its affiliates, "Target").

         First, ICP formally challenges at the earliest time possible the FRB's approval on March 14 without public notice or comment of an indirect bailout of Bear Stearns, which is not a Bank Holding Company and does not own a bank, through JPMorgan Chase as anti-competitive, contrary to the public interest, a violation of the FRB's duties and, by the way, entirely illegal.

         The FRB's claimed power to lend to a non-depository corporation like Bear Stearns in "unusual and exigent circumstances" generally requires "the affirmative vote of not less than five members." Even 12 U.S.C. Section 248(r)(2)(A)(ii)(III) and (IV), mandates a finding that "action on the matter is required before the number of Board members otherwise required to vote on the matter can be contacted through any available means (including all available telephonic, telegraphic, and other electronic means)." There has been no showing that, given technology in 2008 (as opposed to the 1930s when this language was enacted), the required attempts to contact Gov. Mishkin were made -- that "despite the use of all means available (including all available telephonic, telegraphic, and other electronic means), the other members of the Board have not been able to be contacted on the matter." The Fed's March 14 actions were unlawful, and must be rescinded.

         Second, 12 U.S.C. Section 248(r)(2)(A)(iii) requires that "any credit extended by a Federal reserve bank pursuant to such action is payable upon demand of the Board." But already it is speculated that the FRS may not be paid back.

         Third, to allow this relation between the nation's third largest bank and fifth largest brokerage, without any antitrust review, even with the required votes which the FRB did not have, is unlawful. The FRB has no authority to pre-approve any prospective acquisition of Bear Stearns by JPMorgan Chase, which some in the financial press predict for as early as March 17. This formal petition, faxed to the FRB on March 15, requests that JPMorgan Chase and Bear Stearns be informed forthwith that any proposed combination would require prior public notice and, ICP is requesting, public hearings.

         Fourth, 12 U.S.C. Section 248(r)(2)(A)(ii) required the Board -- including Gov. Mishkin, see supra -- to find that

(I) unusual and exigent circumstances exist and the borrower is unable to secure adequate credit accommodations from other sources; and

(II) action on the matter is necessary to prevent, correct, or mitigate serious harm to the economy or the stability of the financial system of the United States;

         But Bear Stearns got in trouble due to reckless enabling of predatory mortgage lending which is imperiling consumers and communities. To offer a bailout to a perpetrator and enabler -- particularly but not only while doing very little for the victims of these practices, many of whom face imminent foreclosure -- only encourages further predatory lending, contrary to the public interest findings required by 12 U.S.C. Section 248(r)(2)(A)(ii)(II).

         Fifth, serious questions are raised by Bear Stearns Chief Executive Alan Schwartz having not disclosed Bear's financial condition, including in an interview earlier in the week on CNBC. While the FRB may claim that it does not regulate Bear Stearns, in light of the unseemly bailout, the FRB has a responsibility to inquire in and act on these presumptive violations by Bear Stearns and its senior management and board. Additionally, Bear Stearns' barring of the broadcast to investors of its March 14 conference call, reportedly on the claim that it was covered by copyright, presumptively violated Regulation FD.

       This is also a request under the FOIA for all records reflecting communications involving Federal Reserve System ("FRS") personnel to, from or about the above-named companies or their affiliates since January 1, 2008, and, specifically, for all documents related to the findings and communications required by 12 U.S.C. Section 248(r)(2)(B), mandating that the Board

"shall document in writing the determinations required by subparagraph (A)(ii), and such written findings shall be included in the record of the action and in the official minutes of the Board, and copies of such record shall be provided as soon as practicable to the members of the Board who were not available to participate in the action and to the Chairman of the Committee on Banking, Housing, and Urban Affairs of the Senate and to the Chairman of the Committee on Financial Services of the House of Representatives."

       In this regard, ICP reminds the Board that in 1998 after its ex parte communications with Citicorp and Travelers, it affirmatively disclosed what had been said to whom, and when. No less, and in fact more, is required in this case.

       As to Exemption 4, consider JPM Chase and Bear Stearns were / would have been required to provide the Board with this information. Therefore, this information must be disclosed under FOIA unless such disclosure would:  (1) impair the Board's ability to obtain necessary information in the future; or (2) cause substantial harm to the banks' competitive position.  Since neither of these two tests can be met, the withheld information must be released.

Since the Applicant was, in context, "obliged" to provide the Board with the information contained in these Exhibits, that information can only be withheld if disclosure would likely:  "(1) impair the Government's ability to obtain necessary information in the future; or (2) cause substantial harm to the competitive position of the person from whom the information was obtained."  Critical Mass Energy Project v. Nuclear Regulatory Comm'n, 975 F.2d 871, 878, 880 (D.C. Cir. 1992); National Parks and Conservation Ass'n v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974). [legal argumentation omitted in this format.]  If you have any questions, please immediately telephone the undersigned, at (718) 716-3540.

Very Truly Yours,

Matthew Lee, Esq.

Executive Director

Update of March 3, 2008: Now JPMorgan Chase must file reports on its mortgage delinquencies and foreclosures with the Office of the Comptroller of the Currency. Information from October 2007 through February is due by March 31. Better late than never.

Update of January 14, 2008: There's been a story that Washington Mutual had exploratory merger talks with JP Morgan Chase, since WaMu's subprime lending has gotten it into such financial straits. A follow-up article said that JPM Chase-WaMu would still be below the 10% nationwide deposit cap. And see, Tony Blair's UN Role May Conflict with New Job with JP Morgan Chase.

Update of December 17, 2007: Pundits name JPMorgan Chase as along the most likely candidates to buy GE's credit card unit, which issues private-label and cobranded cards with a number of retailers like Wal-Mart Stores. Good luck...

Update of October 22, 2007: What is the purpose of the Master Liquidity Enhancement Conduit being set up by JPM Chase, Citigroup, Bank of America and a few other banks? Not to help consumers, that's for sure. Rather, it's a way to cook their own books, and avoid reporting losses. That non-banks like PIMCO are not participating, despite the U.S. Treasury Department's Paulson's closed-door claims to the contrary to Italian central banker Mario Draghi, is telling. This is about banks helping themselves. And taking advantage of each other: Inner City Press has learned that JPM Chase's Jaime Dimon has called the conduit an opportunity to make money from his old nemesis Citigroup. "Make it worthwhile," Dimon told Paulson. "Gouge them," Dimon in essence ordered his staff.  Just as these banks said of consumers...

Update of October 15, 2007: Revolting revolving door: on the American Bankers Association's committee to weaken anti-money laundering laws are a slew of former regulators, including William Langford, a former director of regulatory affairs at Fincen and now a senior vice president of global AML at JPMorgan Chase, which hired directly from the agencies, and now uses Langford to lobby for de-regulation... Meanwhile, Chase is slashing jobs at its leveraged finance and structured credit units...

Update of May 21, 2007:  From a report last week, 2006 subprime mortgage volume and status of " Chase Home  $11,548  -- may be a buyer." Great...

Update of May 14, 2007: Why is it not surprising that Jaime Dimon would be dining with the CEO of Dow Chemical -- under attack by Amnesty International for still not addressing the Bhopal issues it bought with Union Carbide -- and fingering some of Dow's officials, J. Pedro Reinhard and Romeo Kreinberg? Let the depositions begin...

Update of April 30, 2007: It was reported last week that JPMorgan Chase's subprime mortgage lending grew 20% from 2005 ($9.6 billion) to 2006 ($11.5 billion)...

Update of April 23, 2007: Why are we not surprised that JPM Chase is buying into Sallie Mae, which alongside its controversial student lending is a subprime lender? Sleazy is as sleazy does...

Update of April 16, 2007: Last year, the Office of the Comptroller of the Currency sued in New York to assert that only it had jurisdiction over the national banks owned by Citigroup. New York's attorney general ended up acting on lending disparities only at Countrywide Financial, which had yet to shift its lending under the umbrella of Federal law. Now from the just-released 2006 HMDA data, for purposes of comparison, Countrywide confined Latinos to higher-cost loans above this rate spread 1.38 times more frequently than whites. JP Morgan Chase was more disparate, confining Latinos to higher cost loans 1.63 times more frequently than whites.

Update of April 9, 2007: In a study of the just-obtained 2006 mortgage lending data, ICP & Fair Finance Watch have identified disparities by race and ethnicity in the higher-cost lending of some of the nation's largest banks. 2006 is the third year in which the data distinguishes which loans are higher cost, over the federally-defined rate spread of three percent over the yield on Treasury securities of comparable duration on first lien loans, five percent on subordinate liens. Among other findings, JP Morgan Chase, 19.28% of whose 2006 mortgages were subprime, was particularly disparate in the New Orleans MSA, where Chase confined African Americans to higher-cost loans 2.74 times more frequently than whites.   

Update of March 19, 2007: From the WSJ of March 14: "J.P. Morgan Chase fell $2.14, or 4.4%, to $46.70, the industrial average's biggest percentage decliner."

Update of March 12, 2007: Chase on subprime cavalier: Charlie Scharf, the head of JPMorgan Chase's retail banking business, said that the bank won't be hurt severely by the subprime downturn. While it may have a "negative impact ... it's quite manageable for a company like ours," Scharf said.  JPMorgan has about $20 billion in subprime loans, representing about 5% of its total assets, the company said Tuesday. About $13 billion of that is in mortgages, with another $1.5 billion in home equity loans. The rest of the subprime portfolio is split between credit cards and auto loans....

Update of March 5, 2007: As JPMorgan Chase's China hand quits, and another Chaser moved into the Treasury Department, we'll soon have more on JPM Chase's role in delivering unemployment benefits (and, of course, tax refund anticipation loans)....

Update of February 26, 2007: JPM Chase continues its stealth expansion in subprime, this week in the UK, raising its stake in Cattles PLC, which is in takeover talks with its smaller rival London Scottish Bank PLC...

Update of February 19, 2007:  Who had been propping up the subprime lender Fieldstone, sold last week to C-BASS? Why JPMorgan Chase, of course...

Update of February 12, 2007: Heading east, JP Morgan Chase last week filed with China's banking regulator to incorporate its China operation in Beijing, according to the WSJ, the move making it the first foreign bank to seek local incorporation in China's capital...

Update of February 5, 2007: Last week, JPM Chase's CEO Dimon predicted or threatened that Chase could capitalize on falling prices for subprime loans by buying them. "We are an economic animal," he said, right on at least one front...

Update of January 29, 2007:  The context of Chase's retail management moves last week: "Tom Wind, who was responsible for JPMorgan Chase's mortgage origination business, left to head Aurora Loan Services, a lender owned by Lehman Brothers (which is being challenged these days, in Boston and elsewhere).  In December 2004, Steve Rotella, the head of mortgages who had been with the company since before the Bank One merger, left to become second-in-command at Washington Mutual" -- so Chase brings in people with histories with predatory lenders, from CitiFinancial and GE Money...

Update of January 8, 2007: The bankruptcy proceeding surrounding the failed subprime lender OwnIt contains a rogue's gallery of OwnIt's enablers, including the ambiguously named, JPM Chase-affiliate J.P. Mortgage Acquisition Corp. which submitted an $11.29 million claim...

Update of January 1, 2007: We begin the year with a blind item. Which recent Chase Mortgage hire in Milwaukee was chosen despite race discrimination charges at previous place of employ? And what does this say about Chase's due diligence and standards?

Update of December 25, 2006: A source in Ohio informs us, of the Ohio Bureau of Motor Vehicles, about "a mailing I got from the agency today. Enclosed with vehicle registration renewal is coupon from Chase  Bank worth $75 upon  opening a  Chase bank account. Cute. This is nothing more than state agency acting as 'bird-dog' for a major bank that finances automobile loans. As you know, this bank has a blemished history here in Cleveland and Ohio." Predatory... And also an enabler of predators: last week's Inner City Press exclusive, concerning Merrill Lynch driving subprime lender OwnIt out of business, was picked up without attribution by other papers last week. One of them reported a new fact, that JPMorgan Chase was also an enabler of OwnIt: "JPMorgan Chase & Co., the disbursement agent for Ownit's "wet line." (This was a small warehouse line Ownit used to finance loans temporarily before transferring them to its main warehouser, Merrill)."

Update of December 18, 2006: Chase is selling subprime. Investment bankers, analysts, and others familiar with predatory lending said last week that Ameriquest's parent ACC has hired JPMorgan Chase & Co as adviser to sell the company and is seeking between $1.5bn and $2bn for the franchise...

Update of November 27, 2006: JPM Chase settled EEOC discrimination charges for $2.2 million last week...

Update of November 20, 2006:  According to the November 18 Cleveland Plain Dealer: JP Morgan Chase "has removed all of its loan officers from the city and region," the report notes. "The bank has also significantly reduced its office presence in the city." It ranked JP Morgan Chase third from the bottom. However, it profited more than most of the other banks in recent years from its business with the city. And JP Morgan Chase held more than $13 million of Cleveland's money, according to the city's bank statements."

   In auto finance, three years ago, Chase Auto Finance was nearly neck and neck with DaimlerChrysler Financial Services, which was then the No. 3 lender behind General Motors Acceptance Corp. and Ford Credit. "We were booking $2 billion to $2.3 billion a month,'' says Joseph Scimone, president of Chase Auto Finance.  "We had the best rate in town.'' According to Crain's, "as interest rates climbed, Chase shifted its strategy. It increased its loan rates to boost profitability and it reached out to a broader spectrum of customers. Chase used to target only superprime and prime customers. Now it also goes after near prime and subprime customers." Chase goes more and more subprime all the time, including by putting a predatory CitiFinancial official in charge of all of Chase's mortgages.

Last week Inner City Press sat down for an interview with the president of the Nagorno-Karabakh Republic, Arkady Ghoukasyan, and asked him about the fires, about the United Nations and other matters. Click here for the footage, on Google Video.

Update of November 13, 2006:  Last week JPM Chase was fined $500,000 by NASD for its 529 plans, and lost a court decision about Parmalat...

Update of November 6, 2006:  The hits just keep on coming. JPMorgan Chase disclosed last week that it had received a letter from the SEC, seeking information about the relationship between Bisys Fund Services, the fund administrator, and the bank's mutual fund unit...

Update of October 30, 2006: JPMorgan Chase announced last week that it had hired David Lowman, the head of CitiFinancial International since 2004, to run its mortgage business and "help expand it globally in consumer finance." What better way than with a predatory lender...

Update of October 16, 2006: On JPMorgan Chase's role in the "block box" bond scam: " In the Florida deal, a little-known government body called the Capital Trust Agency turned the work over to its advisers: Anchor National Life Insurance, a subsidiary of AIG; CDR Financial Products, a financial advisory firm in Beverly Hills, California; and the underwriter J.P. Morgan. These companies and other middlemen extracted $12 million in fees from the bond issue; the rest of the money went unused. The AIG unit and CDR had an agreement that the agency said it did not know about. The agreement allowed CDR to increase its fees as long as the money was not spent for its intended purpose, according to a Nov. 18, 1999, letter from CDR's president, David Rubin, to AIG's Anchor National vice president, J. Franklin Grey. The less money that was used to acquire and renovate apartments, the more money CDR stood to make, and the less risk AIG's affiliate faced as an insurer since all of the money stayed in a safe account. 'Black box deals, pooled deals, blind pools - people call them lots of things,' said Sherman Golden, an Atlanta-based bond lawyer, who said that he experienced one of these deals firsthand when he was a municipal official. He said that he has seen too many deals that benefited banks and other promoters at the expense of taxpayers. A spokeswoman for J.P. Morgan declined to comment. Black box bond deals also rob the U.S. Treasury of about $100 million a year in revenue." -Bloomberg News.

Update of October 9, 2006:  JPMorgan Chase is now the third largest subprime mortgage servicer in the United States, ahead even of Wells Fargo, Option One, New Century and Ocwen (NMN 10/9).

Update of October 2, 2006: Florida is suing a "Tampa-area company called Global Information Group Inc., claiming it made thousands of calls impersonating customers of companies including Verizon Communications Inc., tricking them into providing private call records. Earlier this year the company's principals agreed to pay $250,000 to settle the case, and to cease any "pretexting" activities." Global Information's customers include Chase Bank...

Update of September 25, 2006:  From the Office of the Comptroller of the Currency's craven September 15 approval of JPM Chase's application to acquire branches of Bank of New York: Fair Finance Watch

"expressed concerns about the potential closure of certain branches. JPMCB... expects that it may close approximately 50 branches. JPMCB has represented that in NYC, some of the branches under review are located in L[ow or] M[oderate] I[ncome]  census tracts. [Footnote: In most cases, the branches being considered for closing or consolidation are less than one-fifth of a mile apart, and none is more than about one-third of a mile apart.]"

   First, in New York City "about" a third of a mile can be further than it sounds, particularly with obstructions which must be walked around. The OCC should have required JPM Chase to disclosure its branch closing plans, as even the Federal Reserve did in connection with Chase - Chemical. JPM Chase is going backwards here....For or with more information, contact us.

Update of September 18, 2006: This week we'll let Mother Jones magazine's Sept.- Oct. story about predatory lenders in Cleveland, including Bank One now JPMorgan Chase, speak for itself:

"Robert Perry got laid off from his assembly line job at Alcoa's Cleveland aircraft wheel assembly plant in 2002. He took the only alternative Alcoa offered: a gig as a janitor, at $16 an hour. His mortgage was $900 a month. After he fell behind, his mortgage company proposed a monthly payment of $1,200. When he still couldn't keep up, the lender proffered another deal: a $2,565 lump payment and $1,000 a month. The entire payment was due the last day of that month. Perry wouldn't get paid until the first of the next. He came up $250 short, so Bank One, which held the mortgage, moved to foreclose on his home of 14 years."

For or with more information, contact us.

Update of August 28, 2006: JP Morgan Chase last week purchased a 2% stake in Russia's Bank of Moscow...

Update of August 21, 2006: Among the main complainers to the Federal Reserve about Basel II is... JPMorgan Chase.

Update of August 14, 2006: Subprime by any other name - a report from JPMorgan Securities is looking at 40-year, fixed-rate mortgages versus 30-year TBAs. "The report begins by comparing monthly payments on a 40-year mortgage to that of a 10/20 IO and a regular 20-year mortgage. For the analysis, researchers assume a $200,000 loan at a rate of 6.75%, which is the current prevailing no-point mortgage rate. Though it initially appears that 40-year mortgages can increase payment savings, results show otherwise "After adjusting for higher mortgage rates [charged for 40-year mortgages], savings from a 40-year mortgage drops to just 4% (or $27 per $100,000 loan balance). In comparison, an IO loan still would offer a 12% in monthly payment savings," analysts said... The lower FICOs suggest that 40-year mortgages are more like Alt-A, with the lower FICOs mitigated by the lower LTV and higher refinancing shares."

Update of August 7, 2006: Chase is growing in subprime, and bragging about it. Its press release last week called it "near prime," and it "will expand its presence in the Atlanta area this month by opening a Prime/Near Prime business center to focus even more attention on area auto dealers looking to provide their customers with auto loan solutions. The new office will occupy space with Chase's existing Custom Finance Business Center at 500 Town Park Lane, Suite 100 in Kennesaw." Just what Georgia needs - more subprime lending. It should be noted that when Georgia sought to control subprime mortgage lending, Chase threatened to leave the state...

Update of July 24, 2006: JPMorgan Chase last week reported a decline in retail banking profits, largely on weakness in its mortgage servicing. Jamie Dimon spun that rising interest rates and a likely increase in bankruptcy filings -- which were depressed after the bankruptcy law was toughened last fall -- could lead to credit card losses at JPMorgan Chase of 'several hundred million dollars' in the third quarter, and perhaps as much as $500 million before year's end. 'In credit cards, we know it's going to happen. ... We're telling people upfront,' he said....

Update of July 17, 2006: As JPMorgan Chase prepares to release and spin its earnings on July 19, it's worth noting that JPM Chase is still growing in subprime. Chase is now the fourth largest servicer of subprime mortgages, with $75 billion dollars worth, an increase of 5.62 percent from a year before...

Update of July 10, 2006:  The WSJ too-cutely reported that "J.P. Morgan Chase & Co. has been on a publicity blitz, plastering its name on New York City taxis, coffee cups, and drugstores... The bank's new gimmick: free tickets to the U.S. Open tennis championships to people who use its automated teller machines. The bank, which sponsors the tournament, will hand out more than 5,000 tickets to ATM users who show a receipt with a blue tennis ball printed on the back."

            Previous CEO Bill Harrison Wildly mispronounced the women's Open winner's name. Perhaps Jaime Dimon will bone up better?

July 3, 2006: Crain's last week had a puff piece about how JPM Chase CFO Heidi Miller really wanted to be an academic in Latin America history. But the more timely question, given Ms. Miller relation to SWIFT which gave up private banking records, is what was her (and JPM Chase's) position on that? We're waiting...

Update of June 26, 2006:  While moving to close branches in New York, JPMorgan Chase is eying Moscow as well, announcing June 22 that it's "considering participating in Bank of Moscow's capital increase, once the rights period extended to current shareholders closes.  The bank said its potential participation would be a minority financial investment and is subject to, among other things, regulatory approval." Hmm... 

Update of June 19, 2006: In a June 16 letter to the OCC, JPMorgan Chase's outside counsel at Wachtel Lipton argues that the bank doesn't have to disclose the locations of the (at least) 50 branches to be closed, because as to some of the closings, they'll be later public notice. But this ignores that Chase made exactly these disclosures when it merged with Chemical. So what's the difference, other than that Chase has gotten more and more disdainful of the public, particularly in low income neighborhoods, as it has done each merger since Chemical?

Update of June 5, 2006: Just another compliance violation -- last week the Cox-softened SEC filed JPM Chase for violations in auction-rate securities which favored certain customers over others, and tilted the auctions in favor of issuers over customers -- kinda like its predatory lending. And still no word from the Office of the Comptroller of the Currency on JPM Chase's application to buy BONY's branches and close at least 50 of them -- not about the public hearing requests, nor the locations of the branches to be closed...

Update of May 29, 2006:  Inner City Press / Fair Finance Watch was asked to review JPM Chase's lending in Brooklyn, and has done so: In 2005 in Brooklyn, JPMorgan Chase confined African Americans 3.32 times more frequently than whites to higher cost loans over the federally-defined rate spread of 3% over Treasury securities on a first lien, 5% on subordinate liens. JPM Chase confined Latinos 2.84 times more frequently than whites to loans over the rate spread.

            Also in Brooklyn in 2005, JPMorgan Chase denied 42.14% of mortgage applications of African Americans, and 36.78% of applications from Latinos, compared to only 29% of applications from whites.

            Simultaneously JPM Chase seeks to buy 338 branches from Bank of New York and close 50 of them, including at least four in low- or moderate-income census tracts in NYC, without even disclosing at this stage the locations of the branches.

Update of May 18, 2006: JPMorgan Chase has today for the first time specified that it has identified in low- and moderate-income census tracts four of the Bank of New York branches it seeks to acquire "which are located close to a JPMCB branch." This is essentially code language that these four low-income branches would be closed if the acquisition is approved. JPM Chase's statement, in a May 18 letter responding to Inner City Press/Fair Finance Watch's April 17 and May 6 comments to the Office of the Comptroller of the Currency, declines to provide the addresses of these four branches and the 46 other branches, some surely adjacent to low-income tracts, which the letter projects would be closed.  Also, the figure "four LMI branches" is qualified by the statement "in New York City." Since many of Bank of New York's branches are outside of the five boroughs, might even more than four low- and moderate-income census tract branches be closed? ICP is reiterating its call for public hearing, including on JPM Chase's admission in its response that it still funds payday lenders. Developing...

Update of May 15, 2006: Last week JPM Chase's application to acquire 338 Bank of New York branches arrived, two velo-bound volumes with a cover letter to the OCC in Washington. In all the paper, not a mention of the branch closings that would result, much less their impact on low and moderate income areas...

Update of May 8, 2006:  On JPM Chase-Bank One, ICP submitted a detailed first comment on April 17, which analyzed JPM Chase nationwide and in New York.ICP has continued its review of the worsening pricing disparities in JPM Chase's 2005 lending record, looking at JPM Chase's (and the nation's) major states, beginning with the states in which JPM Chase seeks to buy branches, then in the states impacted by Hurricane Katrina, then in other states.

Connecticut --At JPM Chase for conventional first-lien loans in Connecticut in 2005, non-Latino African Americans were confined to higher cost loans over the rate spread 3.71 times more frequently than non-Latino whites (again worse even that JPM Chase's nationwide disparity of 2.98, set forth in ICP's April 16 comment). JPM Chase's Latino to white disparity in Connecticut in 2005 was 2.76. For home purchase loans in Connecticut, JPM Chase was even more disparate: non-Latino African Americans were confined to higher cost loans over the rate spread 4.69 times more frequently than non-Latino whites. ICP has designed an innovative way to consider income correlations, by calculating upper and lower income tranches based on lenders' own customers.  At JPM Chase for conventional first-lien loans in Connecticut in 2005, upper income non-Latino African Americans were confined to higher cost loans over the rate spread 3.94 times, and Latinos 4.73 times more frequently than upper income non-Latino whites. Income does not explain the disparities at JPM Chase. Public hearings should be held, including in Connecticut.

New Jersey -- At JPM Chase for conventional first-lien loans in 2005, non-Latino African Americans were confined to higher cost loans over the rate spread 2.98 times more frequently than non-Latino whites. JPM Chase's Latino to white disparity in New Jersey in 2005 was 2.64. For home purchase loans in New Jersey, JPM Chase was even more disparate: non-Latino African Americans were confined to higher cost loans over the rate spread 4.69 times more frequently than non-Latino whites; JPM Chase's disparity between Latinos and whites was even higher, at 4.56. Comparing in the same income tranches, JPM Chase for conventional first-lien loans in 2005, upper income non-Latino African Americans were confined to higher cost loans over the rate spread 3.16 times, and Latinos 3.62 times more frequently than upper income non-Latino whites. Income does not explain the disparities at JPM Chase. Public hearings should be held, also in New Jersey.

Louisiana -- At JPM Chase for conventional first-lien loans in 2005, non-Latino African Americans were confined to higher cost loans over the rate spread 2.90 times more frequently than non-Latino whites. For home purchase loans, non-Latino African Americans were confined to higher cost loans over the rate spread 2.70 times more frequently than non-Latino whites. Comparing in the same income tranches, JPM Chase for conventional first-lien loans in 2005, upper income non-Latino African Americans were confined to higher cost loans over the rate spread 3.30 times. Income does not explain the disparities at JPM Chase. Public hearings should be held.

Alabama -- At JPM Chase for conventional first-lien loans in 2005, non-Latino African Americans were confined to higher cost loans over the rate spread 4.33 times more frequently than non-Latino whites. Comparing in the same income tranches, JPM Chase for conventional first-lien loans in 2005, upper income non-Latino African Americans were confined to higher cost loans over the rate spread 5.54 times. Income does not explain the disparities at JPM Chase. Public hearings should be held.

Mississippi -- At JPM Chase for conventional first-lien loans in 2005, non-Latino African Americans were confined to higher cost loans over the rate spread 2.74 times more frequently than non-Latino whites. For home purchase loans, non-Latino African Americans were confined to higher cost loans over the rate spread 2.29 times more frequently than non-Latino whites. Comparing in the same income tranches, JPM Chase for conventional first-lien loans in 2005, upper income non-Latino African Americans were confined to higher cost loans over the rate spread 3.17 times. Income does not explain the disparities at JPM Chase. Public hearings should be held.

Delaware -- At JPM Chase for conventional first-lien loans in 2005, non-Latino African Americans were confined to higher cost loans over the rate spread 2.94 times more frequently than non-Latino whites. For home purchase loans, non-Latino African Americans were confined to higher cost loans over the rate spread 2.54 times more frequently than non-Latino whites; JPM Chase's disparity between Latinos and whites was even higher, at 4.27. Comparing in the same income tranches, JPM Chase for conventional first-lien loans in 2005, upper income non-Latino African Americans were confined to higher cost loans over the rate spread 2.51 times, and Latinos 2.54 times more frequently than upper income non-Latino whites. Income does not explain the disparities at JPM Chase. Public hearings should be held.

Arizona -- At JPM Chase for conventional first-lien loans in 2005, non-Latino African Americans were confined to higher cost loans over the rate spread tw0 times more frequently than non-Latino whites. JPM Chase's Latino to white disparity in 2005 was 2.25. For home purchase loans, non-Latino African Americans were confined to higher cost loans over the rate spread 2.08 times more frequently than non-Latino whites. Comparing in the same income tranches, JPM Chase for conventional first-lien loans in 2005, upper income non-Latino African Americans were confined to higher cost loans over the rate spread 2.35 times, and Latinos 3.42 times more frequently than upper income non-Latino whites. Income does not explain the disparities at JPM Chase. Public hearings should be held.

Illinois -- At JPM Chase for conventional first-lien loans in 2005, non-Latino African Americans were confined to higher cost loans over the rate spread 3.85 times more frequently than non-Latino whites. JPM Chase's Latino to white disparity in 2005 was 1.81. For home purchase loans, non-Latino African Americans were confined to higher cost loans over the rate spread 3.86 times more frequently than non-Latino whites; JPM Chase's disparity between Latinos and whites was 1.95. Comparing in the same income tranches, JPM Chase for conventional first-lien loans in 2005, upper income non-Latino African Americans were confined to higher cost loans over the rate spread 3.84 times, and Latinos 3.37 times more frequently than upper income non-Latino whites. Income does not explain the disparities at JPM Chase. Public hearings should be held.

Florida -- At JPM Chase for conventional first-lien loans in 2005, non-Latino African Americans were confined to higher cost loans over the rate spread 3.01 times more frequently than non-Latino whites. JPM Chase's Latino to white disparity in 2005 was 1.97. For home purchase loans, non-Latino African Americans were confined to higher cost loans over the rate spread 2.82 times more frequently than non-Latino whites; JPM Chase's disparity between Latinos and whites was 2.59. Comparing in the same income tranches, JPM Chase for conventional first-lien loans in 2005, upper income non-Latino African Americans were confined to higher cost loans over the rate spread 3.49 times, and Latinos 2.54 times more frequently than upper income non-Latino whites. Income does not explain the disparities at JPM Chase. Public hearings should be held.

California -- At JPM Chase for conventional first-lien loans in 2005, non-Latino African Americans were confined to higher cost loans over the rate spread 3.89 times more frequently than non-Latino whites. JPM Chase's Latino to white disparity in 2005 was a whopping 5.16. For home purchase loans, non-Latino African Americans were confined to higher cost loans over the rate spread 3.72 times more frequently than non-Latino whites; JPM Chase's disparity between Latinos and whites was 2.49. Comparing in the same income tranches, JPM Chase for conventional first-lien loans in 2005, upper income non-Latino African Americans were confined to higher cost loans over the rate spread 5.43 times, and Latinos 8.55 times more frequently than upper income non-Latino whites. Income does not explain the disparities at JPM Chase. Public hearings should be held.

North Carolina -- At JPM Chase for conventional first-lien loans in 2005, non-Latino African Americans were confined to higher cost loans over the rate spread 4.04 times more frequently than non-Latino whites. For home purchase loans, non-Latino African Americans were confined to higher cost loans over the rate spread 4.33 times more frequently than non-Latino whites. Comparing in the same income tranches, JPM Chase for conventional first-lien loans in 2005, upper income non-Latino African Americans were confined to higher cost loans over the rate spread 4.86 times more frequently than upper income non-Latino whites. Income does not explain the disparities at JPM Chase. Public hearings should be held.

Michigan -- At JPM Chase for conventional first-lien loans in 2005, non-Latino African Americans were confined to higher cost loans over the rate spread 3.19 times more frequently than non-Latino whites. For home purchase loans, non-Latino African Americans were confined to higher cost loans over the rate spread four times more frequently than non-Latino whites. Comparing in the same income tranches, JPM Chase for conventional first-lien loans in 2005, upper income non-Latino African Americans were confined to higher cost loans over the rate spread 3.73 times, and Latinos 1.60 times more frequently than upper income non-Latino whites. Income does not explain the disparities at JPM Chase. Public hearings should be held.

Massachusetts -- At JPM Chase for conventional first-lien loans in 2005, non-Latino African Americans were confined to higher cost loans over the rate spread 2.71 times more frequently than non-Latino whites. For home purchase loans, non-Latino African Americans were confined to higher cost loans over the rate spread 3.09 times more frequently than non-Latino whites; JPM Chase's disparity between Latinos and whites was 4.79. Comparing in the same income tranches, JPM Chase for conventional first-lien loans in 2005, upper income non-Latino African Americans were confined to higher cost loans over the rate spread 2.88 times more frequently than upper income non-Latino whites. Income does not explain the disparities at JPM Chase. Public hearings should be held.

  And finally (for now), in Georgia, a state JPM Chase heavy-handedly threatened to pull out of in light of anti-predatory lending controls passed by the state legislature, in 2005 at JPM Chase for conventional first-lien loans, non-Latino African Americans were confined to higher cost loans over the rate spread 3.44 times more frequently than non-Latino whites. For home purchase loans, non-Latino African Americans were confined to higher cost loans over the rate spread 4.98 times more frequently than non-Latino whites. Comparing in the same income tranches, JPM Chase for conventional first-lien loans in 2005, upper income non-Latino African Americans were confined to higher cost loans over the rate spread 3.66 times, and Latinos 2.02 times more frequently than upper income non-Latino whites. Income does not explain the disparities at JPM Chase, including in Georgia. Public hearings should be held.

Update of May 1, 2006: Bank of New York, which the Federal Reserve hit with a $38 million money laundering fine in 2000 (for having moved $7 billion in hot Russian money), has now settled again, without even paying a fine. The Fed and the New York Banking Department have slapped Bank of New York on its BONY wrist for  new deficiencies in the bank's money laundering controls, giving it 60 days to comply with yet another order. And if it doesn't?  Well, it can just settle again. This will be raised, and reviewed, in connection with JPMorgan Chase's applications to acquire 338 (presumably money laundering) branches from BONY... For or with more information, contact us.

Update of April 24, 2006:  Inner City Press / Fair Finance Watch has now conducted a comparative study of 2005 Home Mortgage Disclosure Act data, this time focused on New York City, and has found that JPM Chase confined its borrowers in Queens to higher-cost loans above the rate spread 8.64 times more frequently than in Manhattan.  Chase's disparities were also intra-borough: in 2005 at JPMorgan Chase African Americans in Manhattan were confined to higher cost loans over the rate spread 11.42 times more frequently than whites in Manhattan...

Update of April 17, 2006: Inner City Press / Fair Finance Watch has just filed a challenge to JPMorgan Chase's proposal to buy 338 branches from Bank of New York, and to close at least 50 of the branches. Portions of ICP's comments are below; see also, "Group tries to block JPMorgan/Bank of NY swap," by Jonathan Stempel, Reuters, April 17, 2006; "Community group challenges JPMorgan Chase deal for Bank of New York retail outlets," Associated Press, April 17, 2006

OPPOSITION TO THE PROPOSAL BY JP MORGAN CHASE & CO. TO ACQUIRE BANK OF NEW YORK'S 338 BRANCHES (AND CLOSE 50 BRANCHES) AND BONY'S APPLICATIONS: PETITION TO DENY AND HEARING REQUESTS BY INNER CITY PRESS / FAIR FINANCE WATCH

APRIL 17, 2006

I.                    Preliminary Statement

            On behalf of Inner City Press/Community on the Move and its members and affiliates, including the Fair Finance Watch (collectively, “ICP”), this is a comment opposing and requesting hearings on the proposal by JP Morgan Chase & Co. and its subsidiaries, including its subprime lending subsidiaries such as Chase Home Finance, and its subprime lending enabling subsidiaries, such as  JP Morgan Securities (collectively, "Morgan Chase" or "Chase") to acquire the retail business and 338 branches of Bank of New York (and to close 50-some branches) and of BONY's applications.

            With this proposal JPMorgan Chase, which is the combination of numerous separate banks which used to compete, particularly in New York, seeks to acquire 338 more branches, disproportionately not in under-served lower income areas. The proposed combination is anticompetitive. Of much continuing concern to ICP, JPMorgan Chase is engaged in disparate and standardless subprime mortgage lending (that is, in predatory lending), and disproportionately excludes low- and moderate-income communities, and people of color, from its offers of prime-priced credit.  Chase's disparities are worsening as it admits to getting deeper into subprime, as reported for example in the American Banker newspaper of December 21, 2005, "Chase Moving into Subprime."

            As demonstrated in exhibits hereto, JPMorgan has succeed Bank One as a lender to pawnshops and other fringe financiers like payday lenders. On compliance with the Servicemembers' Civil Relief Act, there are questions of JPMorgan Chase's compliance, as demonstrated by the sample exhibits referred to herein. Additionally, JPMorgan Chase's investment bank continues to securitize for other subprime lenders, and is in fact growing in this standardless business. In the first three months of 2006, JP Morgan Chase was among the top ten securitizers of subprime loans, according to the trade publication Inside B&C Lending of April 14, 2006 -- its volume of subprime loans securitized in the quarter jumped to $6.8 billion from just $1.8 billion in the first quarter of 2005.  These have included securitizing for Ameriquest units Argent Mortgage and Olympus, in Chase Funding Loan Acquisition Trust, series 2004-AQ1. Ameriquest recently settled charges of predatory lending for $325 million. Chase not only engages in, but also enables, predatory lending.

Section II of this Comment analyzes JP Morgan Chase's mortgage lending disparities based on the brand new 2005 Home Mortgage Disclosure Act data, which no CRA or fair lending exam has taken into account. Section III demonstrates that JPM Chase, despite public statements of concern with money service businesses, has picked up from Bank One in lending to pawnshops and even payday lenders, and otherwise enabling questionable subprime lenders. Section IV raises questions concerning JPM Chase's compliance with the Servicemember's Civil Relief Act, including with specific complaints from military personnel, and other consumer complaints, including of JPM Chase's behavior in the areas impacted by Hurricane Katrina (where Chase also funds pawnshops). Section V concerns prospective branch and service loss, given JPM Chase's past record, including continuing allegations of employment discrimination. Just last month, JPMorgan Chase said it will pay $425 million to try to settle the three-year-long dispute about the bankrupted National Century Financial Enterprises, on whose board of directors three Chasers served. The 8K also said that the SEC's staff is considering whether or not to recommend civil charges against JPMorgan Chase and two of the current or former employees who had served on National Century's board... Also, on March 9, 2006, Japan's financial watchdog penalized the Tokyo branch of J.P. Morgan Securities Asia for breaking the securities laws. The Financial Services Agency ordered the Tokyo branch to suspend part of its stock-futures trading between Friday and March 31 because the company manipulated futures contracts. ICP is requesting public hearings and that on its current record, JPMorgan Chase's application be denied.

II. JPM Chase's Disparate 2005 Mortgage Lending Record, Nationwide & in NYC

Nationwide

            At JPM Chase for conventional first-lien loans nationwide in 2005, non-Latino African Americans were confined to higher cost loans over the rate spread 2.98 times more frequently than non-Latino whites.  JPM Chase denied 46.03% of applications from non-Latino African Americans, versus only 24.46% of applications from non-Latino whites, a disparity of 1.88.

            For home purchase loans, JPM Chase was even worse: non-Latino African Americans were confined to higher cost loans over the rate spread 3.14 times more frequently than non-Latino whites; JPM Chase's disparity between Latinos and whites was 2.35.  JPM Chase denied 23.65% of home purchase applications from non-Latino African Americans, versus only 12.45% of applications from non-Latino whites, a disparity of 1.90.

            ICP has designed an innovative way to consider income correlations, by calculating upper and lower income tranches based on each lenders own customers. Nationwide at JPM Chase for conventional first-lien loans in 2005, upper income non-Latino African Americans were confined to higher cost loans over the rate spread 3.34 times more frequently than upper income non-Latino whites. Income does not explain the disparities at JPM Chase.

New York City

            In Bronx County, the lowest income (and most predominantly minority) county in New York State, JPM Chase in 2005 confined 10.78% of its borrowers to higher cost loans over the rate spread -- 14.77 times more frequently than in more affluent and less minority Manhattan, where only 0.73% of JPM Chase's borrowers were confined to rate spread loans.  JPM Chase's disparity-ratio between borrowers in Brooklyn and Manhattan was almost as pronounced: JPM Chase in 2005 confined 6.64% of its borrowers in Brooklyn to loans over the rate spread -- 9.1 times more frequently than in Manhattan.

            By denial rates, JPM Chase in 2005 denied 39.68% of applicants from The Bronx, and 33.37% from Brooklyn, versus only 26.13% of applicants from more affluent and less minority Manhattan. As demonstrated by the UCC filings ICP is today submitting, Chase also funds and enabled check cashers and other fringe finance in both Brooklyn and The Bronx.

            Bank of New York in 2005 confined its Bronx borrowers to higher cost loans over the rate spread 7.87 times more frequently than in more affluent and less minority Manhattan. Bank of New York's disparity-ratio between borrowers in Brooklyn and Manhattan was almost as pronounced, at 6.5.

            ICP is requesting public hearings and that on this record, JPMorgan Chase's application be denied.

III.  JPM Chase Continues to Enable Pawnshops and Other Fringe Finance

            ICP has previously shown that JPM Chase funds and enables payday lenders and pawnshops. A Bloomberg News article in late 2004 reporting on among other things ICP's proof (“JPMorgan, Banks Back Lenders Luring Poor With 780 Percent Rates,” Nov. 23, 2004), identified Morgan Chase as providing “credit to ACE Cash Express Inc. of Irving, Texas; Mr. Payday of Kentucky Inc.; and Illinois Payday Loans Inc., among others, according to Uniform Commercial Code records, which show lending relationships” -- the UCC filings ICP unearthed and raised in early 2004, including at the JPMorgan Chase-Bank One hearings.  JPM Chase spokeswoman Calmetta Coleman was quoted that “[w]e have heard the concerns of consumer groups,' Coleman says.” 

            JPM Chase has continued funding and enable high cost lenders, including in the communities impacted by Hurricane Katrina. Attached hereto are UCC filings such as:

a Feb. 14, 2006 loan from JPM Chase/Bank One to Big Easy Pawn Shop of 4050 Chef Menteur Highway, New Orleans, Louisiana;

a Sept. 22, 2005 loan from JPM Chase "as successor in interest to Bank One" to LaPlace Pawn Shop of 105 West Airline Highway, LaPlace, Louisiana;

a November 2, 2004 loan from JPM Chase/Bank One to Sunset Cash Advance Corp. of Marion, Ohio;

a March 9, 2006 loan from JPM Chase "as successor in interest to Bank One" to JB Pawn, Inc. of Arlington, Texas;

a June 25, 2004 loan from JPM Chase/Bank One to Hilltop Pawn Shop, Inc. of Columbus, Ohio;

an October 26, 2005 continuation of a loan from JPM Chase "as successor in interest to Bank One" to National Pawn and Jewelry Sales, Inc. of Flint, Michigan;

an April 20, 2004 continuation of a loan from JPM Chase "as successor in interest to Bank One" to Great American Sales & Rent to Own, Inc. of Phoenix, Arizona;

an October 4, 2004 loan from JPM Chase/Bank One to Cliff's Check Cashing Stores, Inc. of Carrollton Texas;

a September 19, 2005 filing by JPM Chase concerning Claremont Check Cashing Co, of 510 Claremont Parkway, Bronx, NY;

a March 4, 2004 loan from JPM Chase to Grand at Lincoln Check Cashing Corp. of 153 E. 149th Street, Bronx, NY;

a September 27, 2005 filing by JPM Chase concerning Raythom Check Cashing Co, of 2430 Creston Ave, Bronx, NY;

a September 27, 2005 filing by JPM Chase concerning Money Express Check Cashing Co, of 84 West Fordham Road, Bronx, NY;

an August 18, 2005 filing by JPM Chase concerning P R Check Cashing, Inc. of 2495 Third Avenue, Bronx, NY;

a Bank of New York filing of April 8, 2004 also concerning P R Check Cashing Corp;

a Sept. 16, 2005 filing concerning Freeport Check Cashing Service of Freeport, New York, by both JPM Chase and Bank of New York; and

a December 22, 2004 loan by Bank of New York to Paradise Pawnbrokers, Inc. of 2384 Grand Concourse, The Bronx, New York.

            That is, Bank of New York also funds pawnshops, including in The Bronx.

            JPM Chase also engaged in bigger-picture support to payday lenders. Earlier this year Payday lender ACE Cash Express put out a press release bragging that that it has "amended its existing bank credit facility" with the involvement of JPMorgan Chase Bank is the Syndication Agent and Co-Lead Arranger. We also note that JP Morgan Chase makes secured loans to private prison companies, including the controversial Cornell Corrections Corporation.

            As noted above, in the first three months of 2006, JP Morgan Chase was among the top ten securitizers of subprime loans, according to the trade publication Inside B&C Lending of April 14, 2006 -- its volume of subprime loans securitized in the quarter jumped to $6.8 billion from just $1.8 billion in the first quarter of 2005.  As noted, these have included Chase Funding Loan Acquisition Trust, series 2004-AQ1, the loans in which were, according to Fitch (March 13, 2006), "originated by Argent Mortgage Company, LLC and Olympus Mortgage Company."  Ameriquest recently settled charges of predatory lending for $325 million. Chase not only engages in, but also enables, predatory lending.

            Another sample transaction: on August 9, 2005, much-sued tax refund anticipation lender H&R Block announced that two of its subprime subsidiaries, Option One Mortgage Corp. and Option One Loan Warehouse Corp., have amended their note purchase agreement with JPMorgan Chase Bank N.A.. The amended agreement is to extend the term of Option One Mortgage's off-balance sheet financing arrangement with JPMorgan to fund daily non-prime originations through Oct. 4, according to the filing. Under the arrangement with JPMorgan, non-prime loans originated by Option One Mortgage are sold daily to H&R's Option One Owner Trust 2003-4, which uses the JPMorgan facility to purchase the loans.

            JPM Chase also buys predatory loans. CBS MarketWatch of Nov. 30, 2004, told the story of an abusive loan replete with mandatory arbitration clause made in Newark by much-sued Delta Financial, and later sold to Bank One / JP Morgan Chase, which has now started foreclosing. Here’s how the loan was made: after “a hurried knock on her front door at 10 p.m., Prince said. Despite Prince's protests that she was sick and bedridden, the broker wouldn't leave the loan paperwork for Prince to peruse later. ‘She couldn't wait,’ Prince said. ‘I just signed them so she could get out of there. She was running me crazy with it.’ Prince, unable to make the $440 loan payments on her monthly Social Security income of $1,002, is now facing foreclosure.”  By JP Morgan Chase, which “is arguing in court that Prince can make no claim of predatory lending against it since it didn't originate the loan.”  The bank’s “spokesman said the company could not comment on pending litigation.” 

            ICP is requesting public hearings and that on this record, JPMorgan Chase's application be denied.

IV.  JPM Chase's Questionable SCRA Compliance, and Other Consumer Complaints

                Military personnel on active duty are being overcharged on high interest loans by JP Morgan Chase, ICP's ongoing investigation of compliance with the Servicemembers’ Civil Relief Act (SCRA) has uncovered.  The Servicemembers’ Civil Relief Act, at 50 USCS Appendix Section 527(1)(a) provides that “An obligation or liability bearing interest at a rate in excess of 6 percent per year that is incurred by a servicemember, or the servicemember and the servicemember's spouse jointly, before the servicemember enters military service shall not bear interest at a rate in excess of 6 percent per year during the period of military service.”

   JP Morgan Chase’s practices, and their impact on front-line military personnel, are reflected in the complaint online at www.innercitypress.org/jpmcscra47a.jpg  and www.innercitypress.org/jpmcscra47b.jpg
“I am writing you from Baghdad, Iraq asking, once again, for Bank One to drop my interest rate on these three cards to 6%. I have phoned in and spoken with your customer service on two previous occasions, once in May 2004 when my deployment began, and again in September 2004, before I actually deployed to Iraq. Both times I was instructed by the customer service that because the three accounts in question were for Overdraft Protection, they did not qualify under the Soldiers and Sailors Relief Act. This makes no sense to me, considering the accounts are clearly operated like a credit card. I have used these accounts to complete balance transfers, operate as a Visa credit card, and for overdraft protection. It is clear that even though the account functions as a credit card, Bank One is using the technicality of it being classified as an Overdraft Protection to ensure that soldiers like me cannot benefit from the Soldiers and Sailors Relief Act on these type of accounts. I am asking you to please reconsider. The following three accounts in question are as follows:
Account 1 [REDACTED] 13.99% interest
Account 2 [REDACTED] 28.99% interest
Account 3 [REDACTED] 13.99% interest
…In November 2004 my wife, pregnant with twins, had a miscarriage due to increased stress from the deployment and current financial burdens. She has also had to sell my car to help meet current financial responsibilities. Right now, in Baghdad, I am responsible for the well being of 117 soldiers. Everyday we are facing multiple threats every time we leave the gate. In 60 days my soldiers and I have been hit by 31 roadside bombs. I, personally, do not have the time to get involved, nor do I need to be worrying about the bills back home.”
   Another complaint about Chase, submitted to the White House / Andrew Card:
“I cannot tell you how much my husband and I appreciate your willingness to look into this situation…We have met with resistance from certain companies in regard to them helping during this crisis. They disregard the mandates under the SSCRA and have done out of their way to harass us.
“Chase NA credit card has been the worst of these companies. They not only refuse to lower our interest rate to 6%, but actually raised it from 15% to an unbelievable 22.99%.”

    This is indicative of the JPM Chase practices on which ICP is timely requesting hearings. Here are other sample consumer complaints, including from the Katrina Zone:

Subject: Chase Home Finance
Date: 12/6/2005 3:03:58 PM Eastern Standard Time
From: [Name withheld]
To: JPMChaseWatch [at] innercitypress.org
My home is located in Hancock County Mississippi.   Hurricane Katrina devastated southern Hancock County causing over 90% of homes and businesses catastrophic damage.  My home was one with catastrophic damage.
Shortly after the hurricane I contacted Chase to inquire about payment options.  I was told that based on the damage and my federally declared zip code that I would not have to make payments for three months.  In December I was to assume payments and the months of September, October and November 2005 would be added to the loan without penalty.  On September 29 I received a bill from chase detailing my missed payment as past due.  I called and spoke to a representative named Andrew who assured me the bill was automatically computer generated but that the system did not identify my loan as late.  I again called in October and November when I received my bills.  I was told the same thing.  On November 22 I received a letter from chase requesting information about intent to rebuild.  Again I called, again I was reassured that my credit would not be affected and I would owe but one payment in December.
Today, December 5, I called to make my scheduled payment and was told that not only do I owe four months of payments but that I would be reported to the credit borough starting January if not paid.  I asked to speak to a supervisor who told me that Chase made the decision not to honor full deferrals on November 1, 2005 and anyone I spoke to after that misinformed me.  Between November 1 and November 29 I had no less than six conversations with Chase Representatives; all of them assured me I was fine.  The supervisor advised me that payment plans were being set up to bring people current with their mortgages but I do not qualify for such since I am unemployed (Katrina destroyed my place of employment as well).  She told me to make my December payment and call back in January.  She could offer no assurance that my credit then would not be affected if I am unable to come up with the almost $4000 it would take to make me current.
I have four children, my home is destroyed, my insurance company is not paying for damages, I am unemployed and I feel I have been deliberately misled by Chase.   I was told one thing and at the last moment everything regarding my loan changed.

Then --

Subject: Chase Home Finance
 Date: 1/11/2006 3:12:40 PM Eastern Standard Time
 From: [Name withheld]
 To: JPMChase-Watch [at] innercitypress.org
 I wrote in on Dec 5 detailing some of my "Chase Story". Just a quick update.  Chase has begun the foreclosure procedures on my home.  They are threatening to take what is no longer there.
   I have received letters stating that my home has been inspected and appears to be unoccupied; that they will secure the property, change the locks and winterize at my expense if I do not contact them immediately.
 First: Since Katrina, I have spoken with a Chase representative at least once a week.
 Second:  From August 30, I was repeatedly assured my loan was deferred and in good standing, that payments would resume in December.  (They neglected to inform me of their change of policy on November 1 despite several phone calls from November 1 to December 1.)   Third:  I have, again, repeatedly, informed Chase of the structural status of the property.  Each time I speak with them I have to tell them that NO the home is not habitable. Fourth:  Whomever inspected the property should not be on the payroll.  There are no walls!  There are no doors!  There was no roof until a week ago!  What exactly are they going to winterize? 2x4s??
 I have managed to hold the foreclosure process off for another month by paying, in addition to my monthly mortgage, a large sum of money.  Friends in the area tell me that mine is not the only loan Chase has taken this approach with.  They have us.  The options are, follow the original payment plan agreed to shortly after the storm and have your credit ruined because they will report you for non payment and/or foreclose on the loan; or do it their way and put out funds that could and should be directed toward rebuilding the very properties they threaten to take.  The people in this area have lost everything.  Everything.  If your good credit is all you have left, holding on to it is going to be paramount to your future.  How is it that Chase has the power to take what is left?  They did not inform of their change in policy, will answer to no one about this, and in the end will profit from the loss of those most affected by the largest natural disaster in US history.

And --

Subject: Chase Horror story
From: [Name withheld]
To: JPMChase-Watch [at] innercitypress.org
Sent: Fri, 28 Oct 2005 14:40:27 -0500
             I have found your site and find it interesting that Chase Manhattan Mortgage Company (CMMC) has treated other customers with such disdain. Our story starts in the fall of 2002 after my retirement from the Air Force (the house was purchased in 1999)  I was having a hard time finding a new job, and my income had been cut by 2/3rd''s.  We contacted Chase to let them know what was going on in October, and to find out what we would need to do for assistance - we were told that until we were 60 days late on payments they could not assist - this was a situation we were trying to avoid for obvious reasons.
             In December 02 I found work in Oklahoma City, and put our house in San Antonio up for sale or rent - we were able to make both payments through April 03 even though the house was sitting vacant.   I the mean time we contacted Chase on several occasions letting them know we had moved and that finances were getting worse and unless we sold or rented the house we would have problems soon.  After the April payment we could not continue the dual rent/mortgage and let Chase know and again we were told that until the 60 day point we could not receive help, what we were trying to do was save our credit and either refinance or restructure the note, or pay just interest on the house for a few months placing the payments at the end of the note.
             In May the house was rented for $800 per month, but due to work that had to be done we did not receive any monies until July and then it was only a partial payment - we told Chase what had transpired and that if they would work with us we would put all of the rent monies toward the mortgage (it was $100 a month less than the mortgage) and pay the difference if we could work out something with the missed payments.  We put this in a written request as directed by Chase; we were turned down the first time because they did not include my current salary it only took a few days.
             We re-requested as we were told since the first request had been closed and a new process had to be opened; they told us to collect the monies from the rent and save it until the request was approved and we did just that - placed the monies back to pay Chase when the request was answered.  The second request took from June until August to be denied - it was denied due to us being behind in the mortgage more than 60 days.
             When we contacted them we were told that we needed to re-submit again and continue to save the monies from the rent - again we complied.In August we asked the renter is they would like to buy the house - and we would let them take over payments of our VA note (they had VA eligibility).  We contacted Chase and told them what we were trying to do - Chase in turn called the renters and told them they would have to pay the past due payments as well as penalties before they could assume the note (almost $10K - 4 months @ $900) - Chase had not told us that would be required nor had they asked us for the past payments since we had a request in with them for assistance.   The sale fell through after Chase contacted the renters.
             In September/October we went to the realtor and we had brokered a deal to have the house sold outright for the payoff of the note ($69K on a $79K house).  This time Chase called the buyers and told them we were filling bankruptcy and the house would be tied up for years - you might wonder how we know this: When Chase called in October to let us know that our request had been denied for the third time they told my wife they had called the buyers and informed them we were filling bankruptcy (this is not a he said she said - we were by that time recording all our calls from Chase and have the tape to back it up).   This caused the sale to fall through and this was the second sale Chase purposefully caused to fall through.
We continued to try working with them until January 2004 - at that time the renters moved out due to the harassment from Chase (they had gone out to inspect the property and force their way in telling the occupants that the police would be called if they were not allowed in at that time) they had called them for payments - this is hearsay because our realtor told us what happened; just a note we at no time saw or spoke to the renters all communication was through the realtor.
With the loss of the renters and with Chase's determination to prevent a sale of the house we filled for bankruptcy on January 12, 2004 - Chase continued to try to collect from us through June 2004 even though the bankruptcy was finalized on 4 April 2004.  We would receive certified letters from Chase which we would turn copies over to our attorney for future use.  Our lawyer would not file against Chase as he was too small and the house was in Texas not Oklahoma.
In the end we lost the house and had to file bankruptcy over just a few months worth of mortgage payments - even the VA was in disbelief of how Chase was operating but they did not have the authority to force co-operation.  The VA approved our request for reworking the loan and Chase would not work with us at all. Yes I can believe any of the items I read about Chase...And this story does not include their credit card, I have on tape where they admit calling me ten minutes apart and disclosing my account information to my brother.

            This too is indicative of the JPM Chase practices on which ICP is timely requesting hearings.

V.        JPMORGAN CHASE HAS DIMINISHED THE SERVICE TO COMMUNITIES, PARTICULARLY LMI NEIGHBORHOODS AND PEOPLE OF COLOR, AFTER PREVIOUS MERGERS

            Once upon a time -- in the last decade, actually -- in New York City many large banks competed with each other in providing retail banking and lending services. These included Chemical Bank, Manufacturers Hanover Bank, Bank of New York and Chase Manhattan Bank. In 1992, Bank of New York bought 60 branches of Barclays Bank, and in response to challenges from ICP, moved to extend its Community Reinvestment Act assessment area to include The Bronx, Harlem and Brooklyn.  The other above-named New York City banks consolidated, then in desperation bought the investment bank J.P. Morgan, and then the Midwest's Bank One.  As ICP will further show at the requested public evidentiary hearings, JPM Chase has grown worse and more disparate after each previous acquisition, including through branch closings and service reductions.  See, e.g., "The group said the South Bronx in particular had been underserved by Chase, with only one-fifth of the bank's mortgage applications in the Bronx coming from the South Bronx. And it said that of Chase's 15 branches in the Bronx, only 2 were in the South Bronx."  New York Times, November 5, 1994.

Rather than appropriately serve the South Bronx and communities like it, the next step was the merger of Chase and Chemical, resulting in the closure of 100 branches, 12 in The Bronx.      While Chase said that only seven of its 100 named branch closings explicitly related to the Chemical merger were in low- or moderate-income neighborhoods, this turned out not to be true.  See, e.g., N.Y. Daily News, September 3, 1996 (The Toll: City Will Lose 4,000 Jobs; 100 Area Banks to Close): "Branches: one hundred will close. They include... neighborhood branches in Jackson Heights, Queens, and Gun Hill in the Bronx. Chase says only seven targeted branches are in poor neighborhoods. But [ICP] a South Bronx group that's battling the merger, says that is misleading. 'Technically, Jackson Heights, Gun Hill and several other branches are in middle-income neighborhoods, but they're just blocks away from low-income communities, so they adversely impact the poor who use those banks,' [ICP] said." As the New York Banking Department (NYBD) soon realized (after these and other comments), numerous others of the closings were in technically middle income census tracts, surrounded on all sides by low- or moderate-income tracts.  In fact, Chase's duplicity lead to the NYBD changing the format of its branch closing question, to include branches adjacent to LMI tracts.  Over 10,000 people were laid off; Chase aggressively fought off litigation alleging racial and age discrimination in the lay-offs.  See, e.g., BERTUZZI v. CHASE MANHATTAN BANK, N.A., QDS:02761641.

    More recently, similar discrimination has been alleged at JPMC's Bank One. See, e.g., "Age-bias suit must go to trial, judges say," Columbus Dispatch, March 1, 2006.  The problems are not only bias: in mid-2004, a case was filed in U.S. District Court in Houston, alleging that for the past three years, hourly employees at Chase call centers across the country were expected to perform unpaid tasks before and after their shifts so they could spend most of their shifts taking calls from customers. Employees routinely were required to perform setup and cleanup tasks before and after their shifts without pay, the suit stated.

These are all adverse managerial factors under the applicable statute, on which ICP is requesting public hearings.

There are other adverse managerial issues.  From Dow Jones of August 9, 2004: J.P. Morgan Chase, its subsidiaries and three current or former employees have been named as defendants in a series of lawsuits stemming from the company's work with a now-bankrupt firm, according to J.P. Morgan's quarterly report filed late Monday with the Securities and Exchange Commission. The 13 suits, which were filed in or transferred to the U.S. District Court for the Southern District of Ohio, stem from the November 2002 bankruptcy of National Century Financial Enterprises Inc. The plaintiffs, who include institutional investors that purchased more than $2.7 billion of asset-backed securities issued by National Century, accuse J.P. Morgan and its affiliates of not doing enough to reveal National Century's financial structure and problems to investors, according to the filing. The suits also name as defendants National Century's founders and executives, its auditor and outside counsel, and ratings agencies and placement agents that were involved in issuing notes to institutional investors. J.P. Morgan said that motions to dismiss the suits are pending. Before its bankruptcy, National Century provided financing to various healthcare providers through its special purpose vehicles. The entities bought discounted accounts receivable to be paid under third-party insurance programs, and financed those purchases primarily by private placements of notes to institutional investors. J.P. Morgan Chase Bank was the indenture trustee for one special purpose vehicle, NPF VI, which issued about $1 billion in notes, the filing said. A unit of Bank One (ONE), which recently was acquired by J.P. Morgan, was the indenture trustee for another special purpose vehicle that issued about $2 billion in notes. The lawsuits assert that the trustees "violated fiduciary and contractual duties, improperly permitted NCFE and its affiliates to violate the applicable indentures and violated securities laws by (among other things) failing to disclose the true nature of the NCFE arrangements," J.P. Morgan said. The three current or former employees, whom J.P. Morgan didn't identify, were named in the lawsuits because they sat on National Century's board of directors, according to the filing." As we’ve noted, they include... Hal Pote, one-time supposed retail wunderkind, now presiding over loans to payday lenders. Continuing: "The employees allegedly controlled the board and audit committees of the National Century entities. The lawsuits assert that the employees "were fully aware or negligent in not knowing of NCFE's alleged manipulation of its books and are liable for failing to disclose their purported knowledge of the alleged fraud to the plaintiffs. "In addition, the lawsuits allege that Banc One Capital Markets Inc., which was co-manager for three note offerings made by a National Century vehicle, "is liable for cooperating in the sale of securities based on false and misleading statements."

            On January 12, 2005, Morgan Chase’s Banc One Securities Corp. was fined $400,000 by the National Association of Securities Dealers for failing to supervise brokers to prevent the illegal late trading of mutual fund shares and that it falsely recorded customer orders. The NASD said it was the largest fine ever imposed for a lapse of that nature.

            In December 2005, Chase Investment Services Corp. paid $290,262 to resolve regulators' allegations that it failed to prevent improper trading in mutual funds by a favored client that used ruses to circumvent funds' restrictions. The NASD on December 13 announced the settlement over allegations of failing to prevent improper trading in mutual funds and market-timing abuses. The NASD said Chase lacked an adequate supervisory system and controls to prevent the hedge fund from trading in certain mutual funds that had barred it and from continuing to engage in market timing in those funds.  From at least February 2002 through April 2003, the regulators said, Chase received notices from 19 mutual funds barring the hedge fund from any future trading in the funds because an excessive number of trades by the hedge fund had been detected. Chase failed to monitor the accounts of the hedge fund to ensure that the trading bans were enforced, according to the NASD…

Just last month, JPMorgan Chase said it will pay $425 million to try to settle the three-year-long dispute about the bankrupted National Century Financial Enterprises, on whose board of directors three Chasers served. The 8K also said that the SEC's staff is considering whether or not to recommend civil charges against JPMorgan Chase and two of the current or former employees who had served on National Century's board... Also, on March 9, 2006, Japan's financial watchdog penalized the Tokyo branch of J.P. Morgan Securities Asia for breaking the securities laws. The Financial Services Agency ordered the Tokyo branch to suspend part of its stock-futures trading between Friday and March 31 because the company manipulated futures contracts.

  BusinessWorld (Philippines) of February 4, 2004, reported that "the central bank yesterday reiterated its call for banks to document the sale of foreign exchange worth more than $5,000. In a statement, Bangko Sentral said documentation should indicate the purpose of the foreign exchange - whether for business, education or medical reasons.  'Original invoices/receipts should be presented to justify them,' it said. It also reminded banks that foreign currency deposit unit (FCDU) transactions over more than $10,000 must be reported to the Anti-Money Laundering Council as covered transactions.  Meanwhile, the central bank clarified that the three banks earlier reported to have breached foreign exchange rules committed the violation... it said of J.P. Morgan Chase."

            In environmental (hypocrisy) news, consider this notice:  “On September 1, 2005, J.P. Morgan Chase & Co 's holdings amounted to 4.91 percent of the paid up share capital of Metso Corporation... Metso is a global technology corporation serving customers in the pulp and paper industry, rock and minerals processing, the energy industry and selected other industries.”

In October 2005 it emerged that JPMorgan Partners is collaborating with Cub Energy LLC to acquire gas processing and gathering assets from Hanover Compressor Co. for $50 million, and then expand capacity at the site.

In mid-2005, JP Morgan Chase put out a press release purporting to report on its performance under its Bank One-merger related lending pledge. The press release referred to “loans to families and businesses located primarily in low- and moderate-income communities.” But how can a family or business be “primarily” located in an LMI census tract? The answer is that the pledge include all mortgages made to people at or below the median income - hardly “low and moderate income.”  The press release apparently refers to everyone at or below the median income as “lower income.” So much for transparency.  It is imperative that this be clarified, in connection with this proposal, along with specifics of the branches to be closed, and the issues above. On branches, note that the American Banker newspaper of April 11, 2006, reported that JPMorgan Chase "has already identified about 50 that it would probably shut... It had intended to open 50 in the city this year, but that plan will be scaled back because of the Bank of New York deal, Mr. Scharf said."  These branches must be identified and the consumer impacts assessed, prior to and at the requested public hearings.

            For the reasons set forth above, your agency should schedule and hold public hearings on JPMorgan Chase's proposal and applications, and, on the current record, your agency should stop / deny the proposed acquisition. If you have any questions, please immediately telephone the undersigned at (718) 716-3540.  Thank you for your attention.

Respectfully submitted,

Matthew Lee, Esq.

Executive Director

Update of April 10, 2006: The 2005 Home Mortgage Disclosure Act data, which Inner City Press / Fair Finance Watch received in late March from JP Morgan Chase, reveal that, considering all conventional first-lien loans, JPM Chase in 2005 confined African Americans to rate spread loans 2.98 times more frequently than whites. The Federal Reserve has defined higher-cost loans as those loans with annual percentage rates above the rate spread of three percent over the yield on Treasury securities of comparable duration on first lien loans, five percent on subordinate liens.

While comprehensive income comparisons will not be possible until the aggregate data is released in September, ICP / Fair Finance Watch has designed an innovative way to consider income correlations, by calculating upper and lower income tranches based on each lenders own customers. Nationwide at JPM Chase for conventional first-lien loans, upper income African Americans were confined to higher cost loans over the rate spread 3.34 times more frequently than whites. Income does not explain the disparities at JPM Chase. More analysis will be forthcoming. For or with more information, contact us.

Update of April 3, 2006: Heard at the Detroit Economic Club last week: "If you listed the top 10 banks in 1990, five of those 10 would be part  of JP Morgan Chase." While it was said as a boast, others find it troubling, The speaker was Richard Manoogian, CEO of Masco Corp., who introduced Jaime Dimon to a crowd in Cobo Hall. According to a noshing FT profile, Dimon flies further east to Chicago on the weekends, strums guitars while dreaming of steak tartare and buying yet more banks. Asked in Detroit about strikes, he said: "A GM bankruptcy would be a disaster and ripple through the economy longer and farther than anyone realizes. Are we worried? Yes. Can we withstand it? Yes. No one company is going to sink us."  

Update of March 27, 2006:  From Fortune magazine of April 3, the reminder that JPM Chase CEO Dimon worked at the seedy subprime lender Commercial Credit (along with another now-Chaser, Charlie Scharf, quoted that "Jamie's... not a classic manager," says Charlie Scharf, who started with Dimon at Commercial Credit in the 1980s and is now head of retail banking at J.P. Morgan." Subprime suffused... Sandwich, too -- from the department of They-Buy-The-Strangest-Things, on March 20 J.P. Morgan Partners announced it will become an ownership partner in Quiznos, they of toasted subs...

United States anti-money laundering, or at least FinCEN, has devolved into a revolving door. Two months after Bill Fox cashed out to Bank of America, now FinCEN's William D. Langford jumps to JP Morgan Chase. “I have an absolutely incredible opportunity with an incredible institution – it’s that simple,” Langford said in a telephone interview. Again - if the Treasury Department's OCC has adopted anti-revolving door safeguards in the wake of the Riggs Bank scandal, why hasn't FinCEN?

Update of March 20, 2006: Thriving on conflict(s of interest), JPM Chase has stepped down from helping NASDAQ to bid on the London Stock Exchange (which its Cazenove unit also advises). Did the same thing on Pernod Ricard in its acquisition of Allied Domecq -- cheers!

Update of March 13, 2006: JPMorgan Chase says it will pay $425 million to try to settle the three-year-long dispute about the bankrupted National Century Financial Enterprises, on whose board of directors three Chasers served. The 8K also said that the SEC's staff is considering whether or not to recommend civil charges against JPMorgan Chase and two of the current or former employees who had served on National Century's board... Also, on March 9, Japan's financial watchdog penalized the Tokyo branch of J.P. Morgan Securities Asia for breaking the securities laws. The Financial Services Agency ordered the Tokyo branch to suspend part of its stock-futures trading between Friday and March 31 because the company manipulated futures contracts.

Update of March 6, 2006: Payday lender ACE Cash Express last week put out a press release bragging that that it has "amended its existing bank credit facility" with the involvement of JPMorgan Chase Bank is the Syndication Agent and Co-Lead Arranger.

Update of February 27, 2006: They also hold some German things: on Feb. 24, notice was given that JPMorgan Chase holds 5.05% of German company Software AG, through JPMorgan Asset Management Holdings Inc... Get ready for the hype: on Feb. 28 from 8 to 3, the Chasers will praise themselves, and reportedly take questions, www.jpmorganchase.com under Investor Relations, Investor Presentations.

Update of February 20, 2006:  In continuing Morgan Chase over-lobbying news, JPMorgan Chase & Co. has named Emily Altman as a managing director and its head of international government relations, reporting to Slick Rick Lazio…  The company also added Rob Griner as a vice president of government relations in its D.C. office. Mr. Griner, was chief of staff to Rep. David Scott, a member of the House Financial Services Committee. Ah, the revolving door…

 Yes they buy the strangest things: as broken by Robin Sidel on Feb. 13, J.P. Morgan Chase & Co., which already does business with more than 1,000 hedge funds, now wants to do their paperwork. The third-largest bank in the U.S. based on market value, after Citigroup Inc. and Bank of America Corp., has agreed to buy the administrative and processing businesses of Paloma Partners Management Co., a Greenwich, Conn., hedge fund…Update of February 6, 2006:  In the run-up to Super Bowl XL in Detroit, Inner City Press / Fair Finance Watch has analyzed mortgage lending patterns in the Detroit Metropolitan Statistical Area in the most recent year for which data is available, 2004. At Chase Manhattan Mortgage Corp., American Americans were over 6.7 times more likely to be confined to higher cost loans than whites, and Hispanics were over 2.9 times more likely to be confined to higher cost loans than non-Hispanic whites…

Updated February 13, 2006:  When Chase’s CEO starts ranting  at stock analysts by name, they’ve nearly hit bottom… Like a lemming: JPMorgan Chase last week agreed to sell Chase Insurance Group to Protective Life Corp. for $1.2 billion in cash, “following rival Citigroup Inc. out of underwriting life insurance.” Yep – following.  For or with more information, contact us.

Update of January 30, 2006: High-cost cards on steroid (or, “supplements” – JPM Chase last week started is issuing a cobranded card with Herbalife Ltd., a provider of “nutritional supplements, weight management, and personal care products.” The Herbalife Visa cards are being distributed through Herbalife independent distributors in the United States. And how will JPM Chase monitor the sales practices and disclosures? We’ll see…

Update of January 23, 2006: On JPM Chase’s earnings conference call last week, Dimon said that improvements in credit card lending and trading will have to wait for yet another year.  "We are working hard to get there in Oh-Seven," he said. "By implication, we won't be there in Oh-Six.” Great merger… Down in Chase’s subprime mortgages, there are changes afoot. According to Origination News, “Chase has decided to lump its prime and subprime businesses under one roof, designating specific chiefs for retail and wholesale.” They had already blurred the lines in their Home Mortgage Disclosure Act reporting…

Update of January 17, 2006: Welcome to the fun house – last week, a hedge fund owned by JPM Chase, Highbridge Capital Management, bought a major stake in the theme park chain Six Flags Inc., whose ex-ESPN board member Mark Shapiro said-in-a-statement,  

"We want to be about more than rides -- Six Flags must be about a wider, more fulfilling experience.” Sort of like Chase…

  More – or most – seriously, this is a follow-up from the Gulf Coast

Subject: Chase Home Finance
Date: 1/11/2006 3:12:40 PM Eastern Standard Time
From: [Name withheld]
To: JPMChase-Watch [at] innercitypress.org

I wrote in on Dec 5 detailing some of my "Chase Story". (Posted on Dec 12). Just a quick update.  Chase has begun the foreclosure procedures on my home.  They are threatening to take what is no longer there.
  I have received letters stating that my home has been inspected and appears to be unoccupied; that they will secure the property, change the locks and winterize at my expense if I do not contact them immediately.
First: Since Katrina, I have spoken with a Chase representative at least once a week.
Second:  From August 30, I was repeatedly assured my loan was deferred and in good standing, that payments would resume in December.  (They neglected to inform me of their change of policy on November 1 despite several phone calls from November 1 to December 1.)
Third:  I have, again, repeatedly, informed Chase of the structural status of the property.  Each time I speak with them I have to tell them that NO the home is not habitable.
Fourth:  Whomever inspected the property should not be on the payroll.  There are no walls!  There are no doors!  There was no roof until a week ago!  What exactly are they going to winterize? 2x4s??
I have managed to hold the foreclosure process off for another month by paying, in addition to my monthly mortgage, a large sum of money. 
Friends in the area tell me that mine is not the only loan Chase has taken this approach with.  They have us.  The options are, follow the original payment plan agreed to shortly after the storm and have your credit ruined because they will report you for non payment and/or foreclose on the loan; or do it their way and put out funds that could and should be directed toward rebuilding the very properties they threaten to take.  The people in this area have lost everything.  Everything.  If your good credit is all you have left, holding on to it is going to be paramount to your future.  How is it that Chase has the power to take what is left?  They did not inform of their change in policy, will answer to no one about this, and in the end will profit from the loss of those most affected by the largest natural disaster in US history.

Update of January 9, 2006:  They buy (into) the strangest things. Here’s a company of which JPM Chase holds just below 5%: Metso Corporation, which describes itself as a global engineering and technology corporation serving customers in the pulp and paper industry, rock and minerals processing, the energy industry and selected other industries. Does JPM Chase vouch for (or scrutinize) Metso’s environmental policies and impacts?

Update of January 3, 2006: Continuing its buying (of influence) through the revolving door, JPM Chase has hired Steve Patterson, Sen. Jim Bunning's Banking Committee aide since 1999, as a vice president of government relations. He’ll be calling in favors in the Washington office for federal government relations co-heads Stephen Ruhlen and Naomi Camper.

     Inner City Press / Fair Finance Watch (ICP) opposed -- and opposes -- J.P. Morgan Chase's merger with Bank One Corporation. See, e.g., "Chase - Bank One Merger Review Airs Dirty Laundry," by Russ Wiles, Arizona Republic, June 27, 2004, Pg. 4D; "Merger Menace: A David Takes on Banking Goliaths," by David Weidner, CBS.MarketWatch and AFX.com, April 23, 2004; "J.P. Morgan Makes $800 Billion Pledge," by Jennifer Harmon, National Mortgage News, April 19, 2004, Pg. 2; "Critics Voice Concerns on Takeover of Bank One," by Leon Lazaroff, Chicago Tribune, April 16, 2004; "Banks Make $800 Billion Promise: Bank One, J.P. Morgan Chase unveil community aid; merger hearings start," by Ken Stammen, Columbus Dispatch, April 16. 2004; "JPM Chase Makes CRA Pledge; Faces Merger Scrutiny," by Liz Moyer, American Banker, April 16, 2004, Pg. 18; "JP Morgan, Bank One To Help Poor Communities," Associated Press, April 15, 2004; "Fed Urged to Block JP Morgan/Bank One Merger," by Victoria Thieberger, Reuters, April 15, 2004; "Group Opposes Bank One Sale: Business with Predatory Lenders a Concern," by Ken Stammen, Columbus (Ohio) Dispatch, April 15, 2004, Pg. 1E; "Jesse Jackson [et al.] Due at JPM-Bank One Hearing," by Damian Paletta, American Banker, April 12, 2004, Pg. 2; "Hearing Set for Chase - Bank One Merger," by Eileen Alt Powell, Associated Press, April 11, 2004; "J.P. Morgan Draws the Line on More Low-Income Lending; Activists Hope to Delay Bank One Merger, " by Tom Fredrickson, Crain's New York Business, April 5, 2004, Pg. 4; "Activists Demand Forum On JPM-Bank One Deal," by Liz Moyer, American Banker, March 26, 2004, Pg. 2; "Now It's JPM Wrestling a Deposit Cap -- In Texas," by Liz Moyer, American Banker, March 1, 2004, Pg. 1; "J.P. Morgan Merger Slammed," by Nancy Dillon, New York Daily News, February 24, 2004, Pg. 67; "Grievance Against JPM / Bank One Deal," American Banker, January 23, 2004, Pg. 3; "Consumer Group Protests Bank Deal; Cites concerns for minority and low-income customers," by Kelly Quigley, Crain's Chicago Business, January 22, 2004; "No Welcome Wagon from Activists for This Deal," by Damian Paletta, American Banker, January 16, 2004, Pg. 4.   On February 23, 2004, ICP filed even more detailed comments. J.P. Morgan Chase, which is a top-ten subprime lender and securitizer, began quietly in August 2003 seeking to preempt all states' anti-predatory lending laws, by shifting its nationside consumer finance lending into a federally-regulated savings bank.  ICP, long concerned with Chase's disparate lending, began an inquiry into complaints filed against Chase with state regulators -- a venue that Chase now seeks to escape.  Some of these complaints are summarized below on this page, and are now being raised by ICP in opposition to Morgan Chase's January 14, 2004, proposal to acquire Bank One.  For or with more information, contact us.

Update of December 26, 2005:  Beyond JPM Chase’s foray deeper into subprime, through cards, here was Bill Harrison on CNBC on December 19:

Q: You are on the Merck board, and you`ve been on the board for five years. Have you spoken about how much this Vioxx situation could ultimately cost the company?
HARRISON: Sure. We try to analyze that. We think we have a very good legal case. And we`re going to take each case on one by one and we`ll see what happens. But I feel good about what`s happening at Merck and the new CEO and Dick Clark has taken the right action. You saw some of that today in the reaction from the analysts. I think we`re on the right track. And Merck has a lot of great fundamentals.
”Q”: Yes. It -- the market certainly reacted well to Dick Clark`s strategy.

  And it wasn’t even New Years yet…

Update of December 19, 2005:  Chase pays yet another fine – last week, Chase Investment Services Corp. paid $290,262 to resolve regulators' allegations that it failed to prevent improper trading in mutual funds by a favored client that used ruses to circumvent funds' restrictions. The NASD on December 13 announced the settlement over allegations of failing to prevent improper trading in mutual funds and market-timing abuses. The NASD said Chase lacked an adequate supervisory system and controls to prevent the hedge fund from trading in certain mutual funds that had barred it and from continuing to engage in market timing in those funds.  From at least February 2002 through April 2003, the regulators said, Chase received notices from 19 mutual funds barring the hedge fund from any future trading in the funds because an excessive number of trades by the hedge fund had been detected. Chase failed to monitor the accounts of the hedge fund to ensure that the trading bans were enforced, according to the NASD…

Update of December 12, 2005: This week, from the mailbag

Subject: Chase Home Finance
Date: 12/6/2005 3:03:58 PM Eastern Standard Time
From: [Name withheld]
To: JPMChaseWatch [at] innercitypress.org

My home is located in Hancock County Mississippi.   Hurricane Katrina devastated southern Hancock County causing over 90% of homes and businesses catastrophic damage.  My home was one with catastrophic damage.

Shortly after the hurricane I contacted Chase to inquire about payment options.  I was told that based on the damage and my federally declared zip code that I would not have to make payments for three months.  In December I was to assume payments and the months of September, October and November 2005 would be added to the loan without penalty.  On September 29 I received a bill from chase detailing my missed payment as past due.  I called and spoke to a representative named Andrew who assured me the bill was automatically computer generated but that the system did not identify my loan as late.  I again called in October and November when I received my bills.  I was told the same thing.  On November 22 I received a letter from chase requesting information about intent to rebuild. 

Again I called, again I was reassured that my credit would not be affected and I would owe but one payment in December.

Today, December 5, I called to make my scheduled payment and was told that not only do I owe four months of payments but that I would be reported to the credit borough starting January if not paid.  I asked to speak to a supervisor who told me that Chase made the decision not to honor full deferrals on November 1, 2005 and anyone I spoke to after that misinformed me.  Between November 1 and November 29 I had no less than six conversations with Chase Representatives; all of them assured me I was fine.  The supervisor advised me that payment plans were being set up to bring people current with their mortgages but I do not qualify for such since I am unemployed (Katrina destroyed my place of employment as well).  She told me to make my December payment and call back in January.  She could offer no assurance that my credit then would not be affected if I am unable to come up with the almost $4000 it would take to make me current.

I have four children, my home is destroyed, my insurance company is not paying for damages, I am unemployed and I feel I have been deliberately misled by Chase.   I was told one thing and at the last moment everything regarding my loan changed.

  That’s Chase…

Update of December 5, 2005: Military personnel on active duty are being overcharged on high interest loans by banks including JP Morgan Chase, a new investigation of compliance with the Servicemembers’ Civil Relief Act (SCRA) by Inner City Press / Fair Finance Watch has uncovered.  Through documents obtained under the Freedom of Information Act, ICP had documented widespread violations of the SCRA, defrauding and overcharging of those in active military service, and regulatory inertia in dealing with the abuses.

            The Servicemembers’ Civil Relief Act, at 50 USCS Appendix Section 527(1)(a) provides that “An obligation or liability bearing interest at a rate in excess of 6 percent per year that is incurred by a servicemember, or the servicemember and the servicemember's spouse jointly, before the servicemember enters military service shall not bear interest at a rate in excess of 6 percent per year during the period of military service.”

            The purpose of the SCRA, formerly known as the Soldiers’ and Sailors’ Civil Relief Act, is to provide interest rate relief and other protections “to servicemembers of the United States to enable such persons to devote their entire energy to the defense needs of the Nation.” Section 502.

   JP Morgan Chase’s practices, and their impact on front-line military personnel, are reflected in the complaint now online at www.innercitypress.org/jpmcscra47a.jpg  and www.innercitypress.org/jpmcscra47b.jpg

“I am writing you from Baghdad, Iraq asking, once again, for Bank One to drop my interest rate on these three cards to 6%. I have phoned in and spoken with your customer service on two previous occasions, once in May 2004 when my deployment began, and again in September 2004, before I actually deployed to Iraq. Both times I was instructed by the customer service that because the three accounts in question were for Overdraft Protection, they did not qualify under the Soldiers and Sailors Relief Act. This makes no sense to me, considering the accounts are clearly operated like a credit card. I have used these accounts to complete balance transfers, operate as a Visa credit card, and for overdraft protection. It is clear that even though the account functions as a credit card, Bank One is using the technicality of it being classified as an Overdraft Protection to ensure that soldiers like me cannot benefit from the Soldiers and Sailors Relief Act on these type of accounts. I am asking you to please reconsider. The following three accounts in question are as follows:

Account 1 [REDACTED] 13.99% interest

Account 2 [REDACTED] 28.99% interest

Account 3 [REDACTED] 13.99% interest

…In November 2004 my wife, pregnant with twins, had a miscarriage due to increased stress from the deployment and current financial burdens. She has also had to sell my car to help meet current financial responsibilities. Right now, in Baghdad, I am responsible for the well being of 117 soldiers. Everyday we are facing multiple threats every time we leave the gate. In 60 days my soldiers and I have been hit by 31 roadside bombs. I, personally, do not have the time to get involved, nor do I need to be worrying about the bills back home.”

   Another complaint about Chase, submitted to the White House / Andrew Card:

“I cannot tell you how much my husband and I appreciate your willingness to look into this situation…We have met with resistance from certain companies in regard to them helping during this crisis. They disregard the mandates under the SSCRA and have done out of their way to harass us.

“Chase NA credit card has been the worst of these companies. They not only refuse to lower our interest rate to 6%, but actually raised it from 15% to an unbelievable 22.99%.”

    We agree – unbelievable. Or rather, unconscionable. For or with more information, contact us.

Update of November 28, 2005: Inner City Press / Fair Finance Watch is analyzing Gulf Coast mortgage lenders in the Katrina-zone, identifying those which in 2004 had the worst disparities between the percentage of African American and white borrowers who were charged higher costs, over the Federally-defined rate spread of 3% over comparable Treasury securities on a first lien loan, 5% on subordinate liens.  Interim results including this finding, that in the New Orleans Metropolitan Statistical Area, Chase Manhattan Mortgage Corporation in 2004 was 5.7 times more likely to confine African Americans to higher cost rates spread loans than whites...

Update of November 21, 2005:   The Federal Reserve on November 18 gave JPMorgan Chase & Co. permission to trade “physical commodities,” provided that the market value of commodities held not exceed 5% of its core - or Tier 1 - capital, and that it notify the Federal Reserve Bank of New York if the commodities' value exceeds 4% of the bank's core capital. The approval doesn't allow the bank to own, operate or invest in facilities that extract, transport, store, distribute or refine commodities....

Update of November 14, 2005:  The American Banker reported last week that JPMorgan Chase plans to close its office gyms in the United States and Europe as president James Dimon seeks to reduce costs. ‘The firm has made the decision to close its internal fitness centers globally with effect from January 2006,’ according to a memo written Tuesday by John Bradley, the human resources director for Europe, the Middle East, and Africa. ‘Since our fitness centers were built the supply of external centers has increased dramatically.’” So very decisive...

Update of November 7, 2005:  The FT of November 5 reports, “JPMorgan Cazenove has made progress with companies well outside Cazenove's traditional hunting ground. Last month, it led the flotation of Kazakhmys, the copper miner.”  Of course, this is not “project finance”...

Update of October 31, 2005: This week, in the spirit of Halloween, back to the mailbag:

             I have found your site and find it interesting that Chase Manhattan Mortgage Company (CMMC) has treated other customers with such disdain. Our story starts in the fall of 2002 after my retirement from the Air Force (the house was purchased in 1999)  I was having a hard time finding a new job, and my income had been cut by 2/3rd''s.  We contacted Chase to let them know what was going on in October, and to find out what we would need to do for assistance - we were told that until we were 60 days late on payments they could not assist - this was a situation we were trying to avoid for obvious reasons.
             In December 02 I found work in Oklahoma City, and put our house in San Antonio up for sale or rent - we were able to make both payments through April 03 even though the house was sitting vacant.   I the mean time we contacted Chase on several occasions letting them know we had moved and that finances were getting worse and unless we sold or rented the house we would have problems soon.  After the April payment we could not continue the dual rent/mortgage and let Chase know and again we were told that until the 60 day point we could not receive help, what we were trying to do was save our credit and either refinance or restructure the note, or pay just interest on the house for a few months placing the payments at the end of the note.