Chase Bank in trouble for treatment of servicemember loans
JPMorgan Chase is facing tough questions about its treatment of servicemember finances. JPMorgan Chase has foreclosed on many active servicemembers’ homes under questionable circumstances. Now, Chase is re-thinking how they handle active duty servicemembers’ student loans.
JPMorgan Chase and active service members
JPMorgan Chase is a mega-finance bank that provides financial services such as student loans, mortgages, checking, savings and lines of credit. Congressional committees and federal prosecutors are both investigating how JPMorgan Chase has handled the finances of active-duty military service members, including military loans. The accusation is that Chase is overcharging active duty servicemembers.
Student loans for service members
Active-duty servicemembers who have their student loans through JPMorgan Chase received surprising news over the last few weeks. Their student loans, which had previously been deferred, were coming due. The policy of JPMorgan Chase had been to defer all student loans while military members were on active duty. This short term loan policy was reversed in late January 2011. Some servicemembers were informed that they would owe over $400 per month extra, starting in just weeks. After multiple complaints from servicemembers saying they would need to take out a payday loan to cover these costs, and the threat of additional congressional inquiries, Chase re-reversed the policy.
Congressional inquiry into Chase mortgages
JPMorgan Chase was the subject of an ABC News investigation that kicked off congressional inquiries just a few weeks ago. Chase has admitted that they overcharged and wrongly foreclosed on several service member’s homes, including homes in Reno, Nevada and Irving, Texas. These actions, and possibly the student loan policy, may violate the Servicemembers Civil Relief Act. The act limits the legal and financial actions for which servicemembers can be held responsible while they are on active duty.