NEW YORK (7/8/13)--JPMorgan Chase has halted most of its sales of consumer credit card debt to collection agencies, indicating more sales would further damage its reputation on its collections practices and that it didn't want to give regulators more reason to probe its practices, according to Bloomberg News (July 1).
Bloomberg said court records indicate third-party collectors' lawsuits over Chase debts have dropped significantly since January, but sources disagree on whether sales stopped completely or were restricted.
The nation's largest bank has come under increasing scrutiny over how it pursues payments from credit card customers who fall behind in paying their debts. Two years ago, the bank stopped filing its own credit card collection lawsuits amid rising pressure.
In May, the bank was sued by California Attorney General Kamala Harris over "procedural shortcuts" and illegal robo-signing it allegedly took to sue thousands of borrowers. Also, since 2011, the Office of the Comptroller of the Currency has been looking into the collections practices of the bank. JP Morgan is expecting a formal enforcement action stemming from nonmortgage consumer collections practices, said Bloomberg.
The Consumer Financial Protection Bureau, which now oversees large debt collectors, began examining such practices earlier this year.
WASHINGTON (7/8/13, UPDATED: 4:35 p.m. ET)--U.S. consumer credit in May surged by the biggest amount in a year, and borrowing in all areas at credit unions also increased, according to the Federal Reserve's Consumer Credit report released today.
Overall borrowing increased $19.6 billion--following a $10.9 billion gain in April--to reach nearly $2.84 trillion, seasonally adjusted.
Total revolving debt hit $856.5 billion--a $6.6 billion gain from 849.9 billion in April. Total nonrevolving debt--which comprises student and auto loans but not real estate loans--increased $13 billion to nearly $1.93 trillion in May.
At credit unions, members borrowed $252.8 billion in May, up from $251.2 billion in April and $231.2 billion at the end of the second quarter, not seasonally adjusted.
Revolving data show that credit union members borrowed $39.9 billion in May, up from $39.5 billion in April and $37.4 billion at the end of the second quarter.
Nonrevolving debt at credit unions hit $212.9 billion in May, up from $211.8 billion in April and $193.8 billion at the end of the second quarter.