September 28, 2013
Jamie Dimon, chairman of the board and president and CEO of JPMorgan Chase & Co, met with Attorney General Eric Holder at the headquarters of the Department of Justice (DoJ) to discuss settlement options after the DoJ threatened legal proceedings over JPM’s involvement in the mortgage-backed securities (MBS) fraud.
Talks between Dimon and Holder involved a possible $11 billion to be paid to the government.
Other agencies involved with the meeting are:
• Securities and Exchange Commission (SEC)
• Department of Housing and Urban Development (HUD)
• New York State attorney general’s office
Holder personally attended the meeting with Dimon which was described as “civil” by an unnamed source.
This anonymous informant said that “the discussion centered partly on whether the bank could avoid criminal prosecution if it paid the fine and whether it would have to admit guilt. Asked about the negotiations in an unrelated news conference, Holder acknowledged the meeting but snapped at a reporter who suggested that “prison time” was not part of the talks. ‘You weren’t in the room when I said I was talking to them,’ Holder said.”
This includes no jail time for JPM executives while only paying a small fraction of the financial windfall JPM and others caused when the housing bubble was created and burst in 2008.
Essentially, Holder made an offer of $11 billion to Dimon to pay for the opportunity to “wipe away a host of probes into its mortgage business.”
The DoJ threatened a criminal and civil investigations on JPM.
According to documents, JPM must respond to “parallel investigations being conducted by the Civil and Criminal Divisions of the United States Attorney’s Office for the Eastern District of California relating to mortgage backed securities (MBS) offerings securitized and sold by the Firm and its subsidiaries.”
In addition, the DoJ “ announced that Plaza Home Mortgage Inc. (Plaza) of San Diego will pay $3 million to aggrieved borrowers as part of a settlement to resolve allegations that it engaged in a pattern or practice of discrimination on the basis of race and national origin.”
According to the settlement, “Plaza to establish race- and national origin-neutral standards for the assessment of broker fees, monitor its wholesale mortgage loans for potential disparities based on race and national origin, conduct fair lending training and continue to operate a community enrichment program designed to address the lack of affordable housing and lending products in minority and underserved communities nationwide.”
Earlier this week, the DoJ reached a settlement with the Southport Bank of Kenosha (SBK) to pay “$687,000 to African-American and Hispanic wholesale mortgage borrowers” because it was shown that SBK “engaged in a pattern or practice of discrimination on the basis of race and national origin.”