Congress Blames Bank for Troop Suicides

Lawmakers argued Feb. 9 that some of the suicides among American troops in recent years were related to financial woes, including failure to meet mortgage payments.

 

And as far as Rep. Bob Filner, D-Calif., is concerned, those deaths are the fault of banks that put profits ahead of troop welfare.

 

"I would call it homicide," said Filner, the House Veterans Affairs Committee's ranking member, during a hearing into why JP Morgan-Chase overcharged servicemembers' on their mortgages and foreclosed on some troops' homes. The bank now admits that it mistakenly charged too much interest on thousands of mortgages of activated troops who had qualified for a 6 percent rate under the Servicemembers Civil Relief Act.

 

Filner said if he knew of a suicide directly linked to a servicemember going through a foreclosure he "would like to file a charge of wrongful death."

 

Stephanie Mudick, head of consumer practices for JP Morgan-Chase, took the brunt of the lawmakers' criticisms. In her prepared testimony, she reiterated the bank's regret and acknowledged the bank had erred.

 

She said the bank has taken a number of steps to correct problems, including establishing a team to work solely with SCRA loans and setting up a hotline staffed by employees trained in managing the loans.

 

The bank previously announced that it had restored about 14 families to foreclosed homes, and that it would be shelling out about $2.4 million in refunds to the roughly 4,000 servicemembers it overcharged. Mudick said the bank added 7.5 percent interest on the refunds, which will translate to about $70 per person.

 

During the hearing, congressmen said $70 fell short considering what the servicemembers and their families went through.

 

"I guess we should clear the air here and point out that Morgan-Chase got $25 billion in TARP [Troubled Asset Relief Program] funds," Rep. Cliff Stearns, R-Fla., said. For the bank to offer "a mere pittance of $2 million" to settle is not much, he argued, noting the money does not include anything for economic damages or pain and suffering.

 

Other congressmen also noted that JP Morgan-Chase is now reporting record profits and that its chairman and chief executive officer, James Dimon, has received multi-million dollar bonuses.

 

Mudick said many of the problems related to the servicemember loans had to do with the coding that designated them as SCRA "falling off."

 

She also said bank staff working on the loans had difficulty calculating what the interest would be based on the military orders calling the servicemember up for active duty.

 

That drew a sharp rebuke from Rep. Tim Walz, D-Minn., who held up an iPad and scrolled though a multi-page Chase credit card agreement, then displayed one-page military order spelling out when a Soldier is due to report for active duty.

 

"You can provide me with a 63-page document to calculate interest to the last penny but you come in front of this committee [and say] that's the reason these people got into trouble," Walz said. "Because you couldn't calculate [interest based] on their orders?"

 

The committee also heard from a Marine family that JP Morgan-Chase pursued for five years for payments it now admits they did not owe. Bank officials harassed them with numerous phone calls and threatened to damage their credit rating -- a career-killer for any officer with a security clearance -- Marine Capt. Jonathan Rowles told the committee.

 

Rowles' wife Julia said they repeatedly reached out to bank officials, including management officers, but no one helped them.

 

"The number we were given for SCRA was an answering machine," she said. "We'd leave our name and number and they'd promise to get back to us within 24 hours. ... But sometimes we were not around to take the phone calls. We'd have to start all over again."

 

The Rowles finally filed a lawsuit against JP Morgan-Chase that may earn class-action status in South Carolina, where they live.

 

Rowles attorney Richard Harpootlian delivered a blistering attack on JP Morgan-Chase and other banks that have been unwilling to work to keep servicemembers in their homes and overcharged them on interest.

 

"Now they want to give them back their money plus 7.5 percent interest -- no harm no foul. And that ain't enough," Harpootlian quipped. "Increase the penalties and send some of the bankers to jail."