You Gave JPMorgan Bank A Whale Of A Christmas Gift

JPMorgan Chase bank received a whale of a Christmas present in 2013, after paying a record amount of fines. I think that the bank's executives should thank American taxpayers for this gift. They probably will never thank us, though.

What was the Christmas gift? Christopher Brauchli wrote an excellent summary at CounterPunch. First, some background about the bank (links added for reference):

"Between June 2010 and November 2012 JPMorgan Chase paid more than $3 billion in fines and settlements... overcharging active-duty service members on their mortgages, misleading investors about a collateralized debt obligation it marketed, rigging at least 93 municipal bond transactions in 31 states... In August 2012 alone it paid a fine of $1.2 billion to resolve a lawsuit that alleged it and other institutions conspired to set the price of credit and debit card interchange fees... February 2012 it paid $1.8 billion to settle claims that it and other financial institutions improperly carried out home foreclosures after the housing crisis..."

Remember, all of that was before 2013. Here's the tally for 2013 (links added for reference):

"In July 2013 it paid $410 million for alleged bidding manipulation of California and Midwest electricity markets. In September 2013 it paid $389 million for unfair billing practices, in September it paid $920 million for actions of the “London Whale” disaster, and in October 2013 another $100 million with respect to the same fiasco... November 19, 2013 it was reported that JPMorgan Chase was going to pay $13 billion to settle what in non-legal terms would be described as a whole bunch of claims that had to do with the mortgage crisis... December 13 it was announced that the bank was entering into a $2 billion deferred prosecution agreement with the government because of its role in the Bernie Madoff Ponzi scheme."

That is a record amount of fines, folks. Plus, the 2013 tally didn't include a data breach, and alleged bribing of Chinese officials to win lucrative contracts. What a corporate history.

Mr. Brauchli explained what your whale of a 2013 Christmas gift was to the bank:

"... Marianne Lake, the Chief Financial Officer of the bank explained that taxpayers will help the bank pay the fine. She explained that of the $13 billion, $7 billion is tax deductible..."

Aren't you thrilled?! It's not like the USA has a federal debt problem to worry about. We have this cash just lying around waiting to be used. Not!

Viewed another way: politicians in Congress believe that the USA can afford to give a $7 billion tax break to an already highly profitable bank, but can't afford unemployment checks for the unemployed, and food stamps for the poor? Our current Congress seems to be Robin-Hood-in-reverse: take from the poor and give to the rich.

This wasn't the first gift by taxpayers to JPMorgan. JPMorgan bank received a $25 billion bailout in 2008. You might think that a bank that had been treated so well by taxpayers would not engage in the abuses of taxpayers Mr. Brauchli listed in the CounterPunch article.

Clearly, fines are not enough. Bank executives must be prosecuted. About the effectiveness of fines to prevent banking abuses, former Secretary of Labor Robert Reich said in September 2013 on Twitter.com:

"Fines effective only if risk of being caught x probability of being prosecuted x amount of fine > profits to be made."

I'm not holding my breath waiting for a thank-you card from the bank. By its actions, it treats both consumers and taxpayers like chumps. A bit of embarrassment definitely beats jail time.

Season's greetings!

Comments

[Dkimmel]

Have you sent this to Senator Elizabeth Warren? If not, you should.

And if you don't know the Yiddish word "chutzpah," you might look it up. It applied.

[George]

Thanks DKimmel for an excellent suggestion. Sent this to both Massachusetts Senators, plus my Congressional rep in the House.

Hopefully, readers will do the same and contact their Congressional representatives.

George
Editor
http://ivebeenmugged.typepad.com

[George]

Readers take note:

Senators Warren and Coburn Introduce Bill to Increase Transparency in Settlements
http://www.accountingtoday.com/news/Senators-Warren-Coburn-Introduce-Bill-Increase-Transparency-Settlements-69216-1.html

"Senators Elizabeth Warren, D-Mass., and Tom Coburn, R-Okla., have introduced bipartisan legislation to increase transparency around settlements reached by federal enforcement agencies, including disclosures of any tax deductions and tax credits."

Thanks to both Senator for looking out for taxpayers.

George
Editor
http://ivebeenmugged.typepad.com