Members of the House Veterans' Affairs Committee tore into an apologetic JPMorgan Chase executive today after the bank admitted violating a law that guarantees protections to servicemembers serving in harm's way.
The giant financial institution failed to comply with the Servicemembers Civil Relief Act, which provides active duty soldiers, who purchased a home prior to the start of their active duty, a 6 percent cap on their mortgage interest rate and any other fees while they are on active duty and for a year after they are discharged.
Stephanie Mudick, head of Consumer Practices at JPMorgan Chase & Co., admitted Chase failed to comply with all aspects of the law and apologized to soldiers for violating the guarantees set forth by the Servicemembers Civil Relief Act.
"I'd like to express to the men and women serving our country and to the members of this Committee Chase's deepest regret over the mistakes we made in applying those protections," Mudick said. "I commit to you that we will get this right."
Rep. Bob Filner, D-Calif., ranking Democrat on the committee, wasn't satisfied with the bank's apology. "You just cannot apologize and give back people 70 bucks and to think this is over," he said. "This is not over for them. But you've broken the law, you've ruined people's lives and people ought to take responsibility for that."
For Marine Capt. Jonathan Rowles and his family, their pursuit of the American dream of homeownership turned into a five-year nightmare saga with Chase overcharging the family on interest payments, threatening to foreclose, and offering little help to fix the solution.
"This is like a bad movie except they're living it. While they're trying to defend us, they're catching friendly fire, so to speak from this country," Richard Harpootlian, the Rowles family's attorney, said. "The penalties need to be stiffer. The banks need to understand that they're not going to have their way with our American fighting men and women."
Rowles did everything right. He sent Chase a copy of his active duty orders and sent them again when Chase couldn't find the first set. Rowles and his wife, Julia, didn't miss a mortgage payment, but according to their attorney, Chase failed to credit them for the payments and then launched a determined collection agency campaigns. The calls came three times a day, some after midnight and at 4 a.m.
"While Jonathan is away either in training, flight school or any of his Marine Corps duties, I was left at home to deal with Chase and their problems," Mrs. Rowles said. "We have two children. One of them was born prematurely and had to have a lengthy stay in the hospital, but yet at the same time I'm dealing with Chase and getting their phone calls, getting their harassment around the clock.
All of this was happening while Capt. Rowles was serving out of the country, his wife Julia was home with a young child and pregnant with another one.
"When you call your wife at two in the morning, just to see how things are going and you spend 20 minutes talking about how we can send another letter or how we can make another phone call instead of honey, I love you, how was your day? How's the babies? It's rough," Capt. Rowles said. "You spend your time trying to not worry about home, but it's still in the back of your mind when you're fighting."
Harpootlian said these are not the types of concerns servicemembers should face while serving in harm's way.
"When you're a weapons officer on an F18 and you're flying in dangerous situations, you want to be focused on that and not about whether your pregnant wife at home who's having a baby and getting calls at three o'clock in the morning from collection people is going to be thrown out on the street," he said.
Chase apologized directly to the Rowles family for putting them through this hardship, saying it was a situation they "are not proud of."
"We clearly made mistakes," Mudick said. "The customer service that we provided to him and to his wife was unacceptable, and the fact that this was a servicemember makes our mistakes all the more inexcusable. We deeply regret any hardship we caused the Rowles family."
Chase is working on making things "whole as soon as possible," vowing to return $2.4 million to servicemembers and their families and has taken care of 12 of the 18 foreclosures.
But as committee members pointed out, the $2.4 million settlement is miniscule compared with the funds at JPMorgan Chase's disposal.
"Morgan Chase got $25 billion in TARP funds, so for them to settle for a mere pittance of $2 million based upon not even providing economic damages to these people, not providing pain and suffering damages not to mention what they did was illegal," Rep. Cliff Stearns, R-Fla., said.