J.P. Morgan Chase Settlement, In an agreement settling many U.S. claims over its sale of troubled mortgages, JPMorgan Chase will pay a record $13 billion, in a deal announced by the Justice Department Tuesday. The plan includes a $4 billion payment for consumer relief, along with a payment to investors of more than $6 billion and a large fine.
“The settlement does not absolve JPMorgan or its employees from facing any possible criminal charges,” the Justice Department says.
JPMorgan Chase brought in nearly $24 billion in revenue last quarter, but it still reported a net loss of $400 million, widely attributed to legal fees. The company’s settlements since January add up to at least $20 billion.
At $13 billion, the JPMorgan settlement is a record amount paid by one corporation to the federal government. The figure is nearly triple the $4.5 billion in fines and penalties paid by BP over the 2010 Gulf of Mexico oil spill (the BP figure doesn’t include restitution and other claims made by individuals and businesses, a process that is ongoing).
The historic deal has been negotiated for months, as JPMorgan and government officials looked for a satisfactory end to a string of lawsuits and investigations stemming from the financial crisis that began in 2007. The Department of Housing and Urban Development also took part in the talks, as did several states.
In announcing the deal, officials detailed how the money would be divided. Part of the $4 billion for consumers would go toward helping some homeowners whose mortgages are handled by JPMorgan. In a rare step, another share would be used to reduce blight in neighborhoods peppered by rundown and abandoned homes.
The pact requires JPMorgan to hire an independent auditor to ensure it follows those guidelines. The banking giant said Tuesday that it expects to fulfill its obligations by the end of 2017.