Report: JPMorgan to pay $125M in settlements over credit card probes

Kevin McCoy | USA TODAY

JPMorgan Chase (JPM) is expected to pay at least $125 million to settle federal and state investigations over the U.S. banking giant's collections and sales of consumer credit card debt, according to a news report.

The tentative agreement with the U.S. Financial Protection Bureau, 47 states and the District of Columbia could be announced as soon as Wednesday, the Reuters report said, citing unidentified people familiar with the issue.

The states are expected to share roughly $95 million, while the CFPB will collect approximately $30 million, according to the report. The settlement is also expected to include about $50 million in consumer restitution.

Public filings by the nation's largest bank have said it has been responding to "formal and informal inquiries from various state and federal regulators regarding practices involving credit card collections litigation ... the sale of consumer credit card debt and securities backed by credit card receivables."

The investigations focus on alleged "violations of law relating to debt collection practices," the bank said in the Securities and Exchange Commission filings.

JPMorgan also reported that California and Mississippi have filed separate civil actions against the bank over similar allegations.

The California action, filed in 2013 by state Attorney General Kamala Harris, charged that JPMorgan flooded the state's courts with collection lawsuits against credit card borrowers based on insufficient legal evidence.

Separately, the CFPB in 2013 ordered JPMorgan to refund an estimated $309 million to more than 2.1 million customers for illegal credit card practices.

The action, which also included allegations by the Office of the Comptroller of the Currency, charged the bank engaged in unfair billing practices for credit card "add-on" products by charging consumers for credit monitoring services they didn't receive.

JPMorgan representatives could not immediately be reached for comment on the settlement report late Tuesday.

A CFPB spokesperson did not respond to a message seeking comment.